INTEGRATED REPORT IR - Nedbank

 
INTEGRATED REPORT IR - Nedbank
NEDBANK GROUP   BEING POSITIONED     CREATING VALUE IN A      DELIVERING AND
                           AT A GLANCE       FOR VALUE       SUSTAINABLE MANNER        REWARDING FOR
                                             CREATION       THROUGH OUR STRATEGY       VALUE CREATION

INTEGRATED                                                                                     IR
REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019

                                                                   NEDBANK GROUP INTEGRATED REPORT 2019   A
INTEGRATED REPORT IR - Nedbank
CONTENTS
                                                                                                                                                          We present our                               CREATING VALUE IN A                                                       Overview of the
                                                                                                                                                          report in four                                                                                                         context in which
                                                                                                                                                                                                       SUSTAINABLE MANNER
                                                                                                                  2                INTRODUCTION           sections to enable
                                                                                                                                                          our stakeholders to
                                                                                                                                                                                                  28   THROUGH OUR STRATEGY
                                                                                                                                                                                                                                                                                 we operate that
                                                                                                                                                                                                                                                                                  informs our strategy
                                                                                                                    2 About our integrated                make an informed                                                                                                       and the tradeoffs
                                                                                                                                                                                                   28 Reflections from our Chief Executive
                                                                                                                      report                              assessment of our                                                                                                      necessary to
                                                                                                                                                          ongoing ability to                       32 Responding to the impact of Covid-19                                       ensure ongoing
                                                                                                                                                          create sustainable                       35 Risks and opportunities in our                                             value creation and
                                                                                                                                                          value.                                                                                                                 management of
                                                                                                                                   NEDBANK GROUP                                                      operating environment (material

OUR                          FORWARD-LOOKING STATEMENTS
                             This report contains certain forward-looking statements
                                                                                                                  4                AT A GLANCE            Overview of the                             matters)
                                                                                                                                                                                                                                                                                 risks.

                                                                                                                                                          group, as well as
                             with respect to Nedbank Group’s financial position, results,                           4 Overview of Nedbank                 of our businesses,                       45 Our strategic focus areas

PURPOSE                      operations and businesses. These statements and forecasts
                             involve risk and uncertainty, as they relate to events and
                             depend on circumstances that occur in the future. There
                             are various factors that could cause actual results or
                                                                                                                      Group
                                                                                                                    6 Nedbank Group in context
                                                                                                                                                          market position,
                                                                                                                                                          differentiators, our
                                                                                                                                                          business model
                                                                                                                                                          and the needs and
                                                                                                                                                                                                      and enablers
                                                                                                                                                                                                   55 Strategic enablers
                                                                                                                    8 Our organisational                                                           58 Strategic focus areas – key
                             developments to differ materially from those expressed or                                structure, products and             expectations of our                         performance indicators
                                                                                                                                                          stakeholders.
To use our financial         implied by these forward-looking statements. Consequently,
                             all forward-looking statements have not been reviewed or
                                                                                                                      services
                                                                                                                   10 Our value-creating
                                                                                                                                                                                                   60 Making tradeoffs and the impact
                                                                                                                                                                                                      on our capitals
                             reported on by the group’s auditors.
expertise to do good         Forward-looking statements made by Nedbank Group
                                                                                                                      business model
                                                                                                                                                                                                   62 Managing risk strategically
                             on 3 March 2020 at the time of releasing our 2019                                     12 Our stakeholders – their
for individuals, families,   results were informed by the group’s business plans and                                  needs and expectations
                                                                                                                                                                                                       DELIVERING AND REWARDING                                                  Assessment of how
                             economic forecasts in January 2020 before the outbreak
                                                                                                                                                                                                  66   FOR VALUE CREATION                                                        value was created

businesses and society.      of the Covid-19 pandemic in SA. Some of these forward-
                             looking statements may not be achievable in the current
                                                                                                                  14               BEING POSITIONED
                                                                                                                                   FOR VALUE CREATION
                                                                                                                                                          Overview of how
                                                                                                                                                          our purpose, vision,
                                                                                                                                                                                                   66 Reflections from our Chief Financial
                                                                                                                                                                                                                                                                                 through our financial
                                                                                                                                                                                                                                                                                 performance for
                             environment and in addition the financial guidance provided                                                                  values, strong                                                                                                         shareholders and
                                                                                                                                                                                                      Officer
                             on 3 March 2020 has subsequently been withdrawn in the                                                                       leadership and good                                                                                                    how remuneration
                                                                                                                   14 Reflections from our
                             Securities Exchange News Service (SENS) announcement                                                                         governance position                      74 Value for stakeholders                                                     outcomes
                                                                                                                      Chairman                            us for long-term                                                                                                       correlated with
                             published on 14 April 2020. We will update the market once
                                                                                                                                                          value creation.                          86 Stakeholder value creation – key                                           our performance.
                             we have more clarity.                                                                 16 Our purpose, vision
                                                                                                                                                                                                      performance indicators
                                                                                                                      and values
                                                                                                                                                                                                   88 Remuneration outcomes
                                                                                                                   17 Delivering value by
                                                                                                                      delivering on our purpose
                                                                                                                                                                                                       SUPPLEMENTARY
                                                                                                                   18 Leading the way for value
                                                                                                                      creation through good                                                       95   INFORMATION                                                               Abbreviations and
                                                                                                                      governance                                                                                                                                                 company details.
                                                                                                                                                                                                   95 Abbreviations and acronyms
                                                                                                                  26 Our board and board
                                                                                                                                                                                                   96 Company details
                                                                                                                     committees
                                                                                                                  27 Our Group Executive
                                                                                                                     Committee

                                 Our integrated report
                                 is supplemented by
                                 our full suite of online
                                 publications, which
                                 caters for the diverse
                                 needs of our broad
                                 stakeholder base as part
                                 of our comprehensive                  INTEGRATED
                                                                       REPORT
                                                                       FOR THE YEAR ENDED 31 DECEMBER 2019
                                                                                                             IR     FINANCIAL AND RISK
                                                                                                                    MANAGEMENT REPORTING
                                                                                                                    FOR THE YEAR ENDED 31 DECEMBER 2019
                                                                                                                                                            SUSTAINABLE
                                                                                                                                                            DEVELOPMENT REPORTING
                                                                                                                                                            FOR THE YEAR ENDED 31 DECEMBER 2019
                                                                                                                                                                                                         GOVERNANCE
                                                                                                                                                                                                         REPORTING
                                                                                                                                                                                                         FOR THE YEAR ENDED 31 DECEMBER 2019
                                                                                                                                                                                                                                                           SHAREHOLDER
                                                                                                                                                                                                                                                           INFORMATION
                                                                                                                                                                                                                                                           FOR THE YEAR ENDED 31 DECEMBER 2019

                                 integrated reporting.
                                 These can be accessed
                                 at nedbankgroup.co.za.              INTEGRATED                                   FINANCIAL AND RISK                      SUSTAINABLE                                  GOVERNANCE                                        SHAREHOLDER
                                                                     REPORT 2019                                  MANAGEMENT REPORTING                    DEVELOPMENT REPORTING                        REPORTING                                         INFORMATION
                                                                                                                  • Results booklet and                   • Sustainable Development Review             • Governance and Ethics Review                    • Notice of 53rd AGM
                                                                                                                    presentation                          • Stakeholder Engagement Report              • Director and executive profiles                 • Form of proxy
                                                                                                                  • Nedbank Group Annual                  • People Report                              • Remuneration Report                             • Shareholding profile
                                                                                                                    Financial Statements
                                                                                                                                                          • Transformation Report and                  • Key policies
                                                                                                                  • Pillar 3 Risk and Capital               BBBEE certificate
                                                                                                                    Management Report
                                                                                                                                                          • Global Reporting Initiative
                                                                                                                  • Tax Report                              Standards
                                                                                                                                                          • ESG disclosures

nedbankgroup.co.za

                                                                                                                                                                                                                                               NEDBANK GROUP INTEGRATED REPORT 2019                      1
INTEGRATED REPORT IR - Nedbank
REPORTING                                     NAVIGATION ICONS
    INTRODUCTION                                                                         KEY CONCEPTS                                                           FRAMEWORKS
                                                                                                                                                                AND COMBINED
                                                                                                                                                                                                              Our capitals                                                   Our strategic focus areas
                                                                                         Our value creation process                                                                                           Our relevance as a bank today and in the
    ABOUT OUR INTEGRATED                                                                 Value creation is the consequence of how we apply and                  ASSURANCE                                     future and our ability to create long-term                                 Delivering innovative,
                                                                                                                                                                                                                                                                                         market-leading client
                                                                                         leverage our capitals in delivering financial performance                                                            value are interrelated and fundamentally
    REPORT                                                                               (outcomes) and optimising value (outcomes and
                                                                                         outputs) for all stakeholders. Our value creation process
                                                                                                                                                                Our integrated reporting
                                                                                                                                                                process, as well as the contents              dependent on the forms of capital                                          experiences

                                                                                                                                                                of this report, is guided by the              available to us (inputs), how we use them
    This report is prepared in accordance with the International                     is embedded in our purpose (page 16), described as
                                                                                                                                                                principles and requirements of                (value-adding activities), our impact on
    Framework of the International Integrated Reporting Council (IIRC)                                                                                                                                                                                                                   Managing scarce resources
                                                                                         part of our business model on pages 10 and 11, and                                                                   them and the value we deliver (outputs
    and provides our stakeholders with a concise and transparent                                                                                                the International  Framework,                                                                                        to optimise economic
                                                                                         integrated into the way we think and make decisions.                                                                 and outcomes). We also make tradeoffs
    assessment of our ability to use our financial expertise to do good                                                                                         IFRS and the King Code of                                                                                                outcomes
                                                                                                                                                                Governance Principles for                     between our capitals, as discussed on
    and create sustainable value.                                                        Materiality and material matters                                       South Africa (King IV), and is in             pages 60 and 61.
                                                                                         We apply the principle of materiality in assessing                     accordance with the ‘core’ option                                                                                        Growing our transactional-
    SCOPE AND BOUNDARY OF REPORTING                                                      what information should be included in our integrated                  of the Global Reporting Initiative                                                                                       banking franchise faster
                                                                                         report. This report therefore focuses particularly on                                                                            Financial
    Reporting period                                                                                                                                            (GRI) standard. As a SA bank                              Our shareholders’ equity, deposits
                                                                                                                                                                                                                                                                                         than the market
                                                                                         those issues, opportunities and challenges that impact                 and a company listed on the JSE,
    This report is produced and published annually. It provides material                                                                                                                                                  and funding from investors and
                                                                                         materially on Nedbank Group and its ability to be a                    we align with the JSE Listings
    information relating to our strategy and business model, operating                                                                                                                                                    clients that are used to support our                           Being operationally
                                                                                         sustainable business that consistently delivers value                  Requirements, the Companies
    context, material risks, stakeholder interests, performance,                                                                                                                                                          business and operational activities,                           excellent in all we do
                                                                                         to shareholders and key stakeholders. Our material                     Act, 71 of 2008, and the Banks
    prospects and governance, covering the year 1 January 2019 to                                                                                                                                                         including credit extension.
                                                                                         matters, as described on pages 35 to 44, influence our                 Act, 94 of 1990.
    31 December 2019. Any material events after this date and up to the
                                                                                         group’s strategy and inform the content of this report.
    board approval date of 14 April 2020 have also been included.                                                                                                                                                         Intellectual                                                   Providing our clients with
                                                                                         However, responding to the Covid-19 pandemic that                      We employ a coordinated
                                                                                                                                                                                                                          Our brand and franchise value,                                 access to the best financial
    Operating businesses                                                                 emerged in SA during March 2020 (followed by Moody’s                   assurance model to assess and
                                                                                                                                                                                                                          research and development,                                      services network in Africa
                                                                                         and Fitch’s downgrades of SA’s sovereign-credit rating)                assure various aspects of the
    The report covers the primary activities of the group, our business                                                                                                                                                   innovation capacity, reputation and
                                                                                         has become our primary focus and will significantly                    business operations, including
    clusters, key support areas and subsidiaries in our African and                                                                                                                                                       strategic partnerships.
                                                                                         impact all our material matters. We discuss this on                    elements of external reporting.
    international operations.
                                                                                         pages 32 to 34 and highlight our preliminary views of                  These assurances are provided                                                                                Our stakeholders
                                                                                                                                                                                                                          Human
    Financial and non-financial reporting                                                the impact of the Covid-19 pandemic on our material                    by management and the board,
                                                                                                                                                                                                                          Our culture and our people, our
    The report extends beyond financial reporting and includes                           matters.                                                               internal audit and independent
                                                                                                                                                                external service providers,                               collective knowledge, skills and                               Staff
    non-financial performance, opportunities, risks and outcomes                         Identifying our potential material matters is a groupwide                                                                        experience to enable innovative
    attributable to or associated with our key stakeholders, which have                                                                                         including: Ernst & Young and
                                                                                         responsibility and requires input from all business                    Deloitte & Touche (Deloitte),                             and competitive solutions for
    a significant influence on our ability to create value.                              units and divisions and an assessment of the risks and                                                                           our clients and value for all
                                                                                                                                                                our external auditors and                                                                                                Clients
                                                                                         opportunities in our operating environment, and input                                                                            stakeholders.
    Targets and strategy                                                                 and feedback from all our stakeholders are considered.
                                                                                                                                                                providers of limited assurance
    The report covers the strategic progress made during 2019, and                                                                                              on selected sustainability
                                                                                         Our material matters inform our long-term business                                                                               Manufactured
    provides insight into the group’s strategy and financial and non-                                                                                           information; and Mosela and                                                                                              Shareholders
                                                                                         strategies, targets and short-to-medium-term business                                                                            Our business structure and
    financial targets for the short, medium (two to three years) and                                                                                            SizweNtsalubaGobodo Rating
                                                                                         plans. Ranking the identified issues in order of relevance                                                                       operational processes, including
    long term (five years or more). Given the impact of the Covid-19                                                                                            Agency, providers of limited
                                                                                         and potential impact is a collaborative effort. Our                    assurance on our application                              our physical and digital assets,
    pandemic the guidance for 2019 has subsequently been withdrawn                                                                                                                                                        infrastructure, our products, as                               Regulators
                                                                                         Group Executive Committee (Group Exco) approves                        of the Amended FSC and the
    and key targets are under review.                                                                                                                                                                                     well as our information technology
                                                                                         the material matters before the Nedbank Group Board                    group’s BBBEE status.
                                                                                                                                                                                                                          (IT) which provides the framework
    Targeted readers                                                                     endorses them. The material matters are assessed
                                                                                                                                                                                                                          and mechanics of how we do                                     Society
                                                                                         continually to ensure that our strategy remains relevant               For further information on
    This report is primarily intended to address the information
                                                                                         in an evolving operating environment.                                  the scope of the services                                 business and create value.
    requirements of long-term investors (our equity and preference
                                                                                                                                                                performed by our external
    shareholders, bondholders and prospective investors). We also                        Identify                          Rank                                                                                           Social and relationships
                                                                                                                                                                assurance providers refer to the
    present information relevant to the way we create value for other
    key stakeholders, including our staff, clients, regulators and society.
                                                                                         issues that have the              those with greatest                  Nedbank Group Annual Financial                            Stakeholder relationships, including               Other icons
                                                                                         potential to impact our           relevance in the                     Statements, the Nedbank Limited                           the communities in which we
                                                                                         earnings sustainability           current operating                                                                              operate, as we recognise the role
    Risk and ESG reporting                                                                                                                                      Annual Financial Statements,
                                                                                                                                                                                                                          that banks play in building a strong
                                                                                                                                                                                                                                                                                         King IV
                                                                                         and create value for              context                              the Nedbank Group and
    To align with our governance and risk management approaches we
                                                                                         our stakeholders                                                       subsidiaries’ BBBEE certificate,                          and thriving society as well as
    have integrated these aspects throughout our integrated report.
                                                                                                                                                                and the Independent Assurance                             financial ecosystem.                                                           COVID-
    To highlight these we have introduced icons that illustrate a King IV                                                  Apply and                                                                                                                                                    Top 12 risk       19      Covid-19
    outcome and where a specific risk ranks within the group’s top 12                                                                                           Providers’ Limited Assurance
                                                                                                                           validate                             Report on Selected Sustainability                         Natural
    risks. More detailed environmental, social and governance (ESG)                      Assess
                                                                                                                           to inform our                        Information, which are available                          The direct use of natural capital in                           This icon directs the reader
    disclosures are available in our supplementary reports: Sustainable                  continuous process to
                                                                                                                           strategy and                         at nedbankgroup.co.za.                                    our operations and our influence                               to pages or supplementary
    Development Review, People Report, Transformation Report,                            ensure our strategy
                                                                                                                           targets                                                                                        through our business activities.                               reports with more information.
    Governance and Ethics Review, Remuneration Report and Pillar 3                       remains relevant
    Risk and Capital Management Report, which can be accessed at
    nedbankgroup.co.za.

                                        APPROVAL BY THE BOARD
                                        The board acknowledges its responsibility of ensuring the
                                        integrity of this integrated report, which in the board’s opinion
                                        addresses all the issues that are material to the group’s           Vassi Naidoo                    Mike Brown          Hubert Brody           Brian Dames               Neo Dongwana                  Errol Kruger                Rob Leith                    Linda Makalima
                                                                                                            (Chairman)                      (Chief Executive)
                                        ability to create value and fairly presents the integrated
                                        performance of Nedbank Group. The board has applied its
                                        collective mind to the preparation and presentation of this
                                        report and believes that it has been prepared in accordance
                                        with the IIRC  Framework. This report was approved by
                                                                                                            Mpho Makwana                   Tshilidzi Marwala    Mantsika Matooane             Raisibe Morathi                    Joel Netshitenzhe               Mfundo Nkuhlu                     Stanley Subramoney
                                        the board of directors of Nedbank Group on 14 April 2020.           (Lead Independent Director)                                                       (Chief Financial Officer)                                          (Chief Operating Officer)

2   NEDBANK GROUP INTEGRATED REPORT 2019                                                                                                                                                                                                                                           NEDBANK GROUP INTEGRATED REPORT 2019      3
INTEGRATED REPORT IR - Nedbank
NEDBANK GROUP            BEING POSITIONED         CREATING VALUE IN A          DELIVERING AND
                                                                                                                                                                                                             AT A GLANCE                FOR VALUE           SUSTAINABLE MANNER            REWARDING FOR
                                                                                                                                                                                                                                        CREATION           THROUGH OUR STRATEGY           VALUE CREATION

    NEDBANK
    GROUP
    AT A GLANCE
    OVERVIEW OF
    NEDBANK GROUP
    Nedbank Group is one of the largest financial
    services groups in Africa, offering wholesale and
    retail banking services as well as insurance, asset
    management and wealth management. In SA
    we have a strong franchise evidenced by a 19%                             TOTAL                            HEADLINE                    CET1           MARKET                                 CLIENTS              EMPLOYEES                        TOP-TIER CLIENT                      MARKET-
    deposit and 19% advances market share.                                    ASSETS                           EARNINGS                  CAPITAL       CAPITALISATION                                                                                   SATISFACTION                        LEADING
                                                                                                                                          RATIO                                                  7,8m                  29 403                            AND LEAGUE                          DIGITAL
    Outside SA we operate in five countries in SADC,                R1,1 trillion R12,5bn                                                                R107bn                                                                                        TABLE RANKINGS                     INNOVATIONS
    through subsidiaries and banks in Lesotho,                                                                                           11,5%
    Mozambique, Namibia, eSwatini (Swaziland) and
    Zimbabwe (during 2019 we sold our operations
    in Malawi). In Central and West Africa we have
    a strategic alliance with Ecobank Transnational
                                                                    BANKING ADVANCES                               DEPOSITS                             ASSETS UNDER
                                                                                                                                                                                                    Level 1                       MSCI                    CARBON-                        DOW JONES
                                                                    (Rbn)                                          (Rbn)                                MANAGEMENT
                                                                                                                                                                                                                                   ESG                    NEUTRAL                      SUSTAINABILITY
    Incorporated (ETI) and we have representative
    offices in Angola and Kenya.
                                                                                                                                                        (Rbn)
                                                                                                                                                                                                    BBBEE                        RATING:                 OPERATIONS                      EMERGING
                                                                                                                                                                                                   CONTRIBUTOR                                         AND EFFECTIVELY                 MARKETS INDEX
    Outside Africa we have a presence in key global                                                                                                                                                  STATUS
                                                                                                                                                                                                                                   AA                     NET-ZERO                       INCLUSION
    financial centres to provide international financial                                                                                                                                                                                                OPERATIONAL                      SINCE 2004
    services for Africa-based multinational and high-                                                                                                                                                                                                   WATER USAGE
    net-worth clients, in Guernsey, Isle of Man, Jersey

                                                                                                                                                 904
                                                                        648

                                                                                                         764
                                                                                      679

                                                                                                                                           826
                                                                               672

                                                                                                                     726

                                                                                                                            762

                                                                                                                                                                    273

                                                                                                                                                                                   297
                                                                                                                                   772

                                                                                                                                                          257

                                                                                                                                                                                           331
                                                                                              713

                                                                                                                                                                            312
    and London, and we have a representative office
    in Dubai.                                                       2015      2016   2017    2018 2019             2015    2016   2017    2018 2019      2015     2016     2017   2018 2019
                                                                                                                                                                                                                                                                           Information as at 31 December 2019

       WHAT DIFFERENTIATES NEDBANK?
          We are a purpose-led business,               Good                                 Experienced                    Selective origination            A wholesale-biased business model                          Access to the largest banking                     Well positioned to benefit
          underpinned by a unique corporate            governance and                       management                     and sound risk                   positions us well to benefit from an                       network in Africa through our                     from a recovery in SA
          culture and progress towards being           ESG leadership                       teams                          management                       increase in business confidence and                        own operations in SADC and                        economic growth
          more client-centred and innovative                 14 to 27                               27                            50
                                                                                                                                                            economic growth                                            our strategic alliance with ETI
                 16                                                                                                                                                                                                    in 39 countries                                   ASSETS BY GEOGRAPHICAL
                                                                                                                                                                                                                                                                         AREA
                                                                                                                                                            WHOLESALE VERSUS RETAIL                                                                                      (%)
          Leadership positions in renewable-energy        Prudent management of                                Strong position as a bank that               ADVANCES
          finance, corporate and commercial-              our expenses over time and                           is committed to doing business               (%)                                                                                                                     7 3

          property lending, small business services,      continuing to lower our cost-                        in a manner that positively
          retail vehicle finance, card acquiring,         to-income ratio through cost                         builds society at large                          36,5                                                                                                                R1 143bn
          digital client value propositions, asset        optimisation initiatives                                  16 and 17                                             R797bn
          management and wealth management                     53                                                   82 to 85
                8 and 9                                                                                                                                                             63,5                                                                                                    90
                                                                                                                                                                                                                           Ecobank presence
                                                                                                                                                                                                                           Nedbank presence
                                                                                                                                                                                                                                                                               South Africa         International
          Technology strategies and innovations           Top-tier ESG rankings                                Improving and, in many cases,                                                                               Ecobank and
                                                                                                                                                                  Retail             Wholesale                             Nedbank presence                                    The rest of Africa
          that position Nedbank to be more                and practices                                        leading client satisfaction
          digital, agile and competitive                       25
                                                                                                               metrics
                 46 to 55                                                                                           76

    NEDBANK GROUP INTEGRATED REPORT 2019
4                                                                                                                                                                                                                                                                 NEDBANK GROUP INTEGRATED REPORT 2019              5
INTEGRATED REPORT IR - Nedbank
NEDBANK GROUP                              BEING POSITIONED                 CREATING VALUE IN A              DELIVERING AND
                                                                                                                                                                                                                                                                                                                                                                                                      AT A GLANCE                                  FOR VALUE                   SUSTAINABLE MANNER                REWARDING FOR
                                                                                                                                                                                                                                                                                                                                                                                                                                                   CREATION                   THROUGH OUR STRATEGY               VALUE CREATION

     NEDBANK GROUP IN CONTEXT
                                                                                                                                                                                                                                                                                                                                       SA TOTAL ASSETS MARKET SHARE                                         SA DEPOSIT MARKET SHARE                                                  SA ADVANCES MARKET SHARE
                                                                                                                                                                                                                                                                                                                                       (%)                                                                  (%)                                                                      (%)

                                                                                                                                                                                                                                                                                                                                                                             TymeBank       0,02%                                                      TymeBank       0,01%                                            TymeBank       0,00%
      Nedbank Group is the                                                                                                                                              The SA banking sector has approximately R4 trillion in                                                                                                                        7,6
                                                                                                                                                                                                                                                                                                                                                                             Discovery Bank 0,10%
                                                                                                                                                                                                                                                                                                                                                                                                                           6,5
                                                                                                                                                                                                                                                                                                                                                                                                                                                       Discovery Bank 0,03%
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  4,6
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       Discovery Bank 0,02%

                                                                                                                                                                                                                                                                                                                                                               17,8                                                                     18,5                                         2,1    7,8          18,8
                                                                                                                                                                        advances, of which Nedbank has a 19% share. We also                                                                                                                    7,9                                                                8,1
      fourth-largest bank in                                                                                                                                             have a 19% share of the R5 trillion SA deposit market,
                                                                                                                                                                                                                                                                                                                                        2,0                                                                1,8

                                                                                                                                                                        an important indicator of franchise strength. We have
      Africa as measured by                                                                                                                                            R331bn total assets under management (AUM) and are                                                                                                                23,9
                                                                                                                                                                                                                                                                                                                                                 R5 894bn             19,5                                  23,6
                                                                                                                                                                                                                                                                                                                                                                                                                    R4 948bn
                                                                                                                                                                                                                                                                                                                                                                                                                                                19,7
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     23,2    R3 996bn
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                21,6
                                                                                                                                                                                    the fifth-largest unit trust manager in SA.
      assets and tier 1 capital.
                                                                                                                                                                                                                                                                                                                                                            21,3                                                             21,8                                                                 21,9
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   Source: SARB BA900
                                                                                                                                                                                                                                                                                                                                              Nedbank              Absa            FirstRand           Standard Bank                    Capitec                  Investec      Other banks                         at 31 December 2019

                 LARGEST BANKS IN AFRICA BY TIER 1 CAPITAL
                 (US$bn, 2019)

    12 000
                                                                                              Groupe Banque Populaire
                                                                     National Bank of Egypt

                                                                                                                                                                                                                                                                                              Arab African International Bank
                                                                                                                                                                                                                BMCE Bank of Africa Group

    10 000
                                                                                                                             Attijariwafa Bank

    8 000
                                                                                                                                                  Investec SA

                                                                                                                                                                                                                                            Afreximbank
                                                                                                                                                                                           Banque Misr
                                                                                                                                                                         Zenith Bank

    6 000
                                                                                                                                                                                                                                                             CIB Egypt
                     Standard Bank

                                                                                                                                                                                                                                                                                 Ecobank

    4 000
                                     FirstRand

                                                           Nedbank

    2 000
                                                 Absa

            0

                    South African                       North African                                                   West African
                 Source: The Banker magazine, July 2019

        SA banks are well-capitalised and generate                                                                                                        ROE1                                                                                                           COST-TO-INCOME RATIO2                                         CREDIT LOSS RATIO                                        CET1 RATIO3                                                  1
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   Nedbank reports ROE on a headline earnings
        good returns (ROE) ahead of COE (around 14%).                                                                                                     (%)                                                                                                            (%)                                                           (Bps)                                                    (%)                                                                basis. Absa Group and FirstRand report ROE on a
                                                                                                                                                                                                                                                                     Medium-term target < 53                                           Medium-term target 60–100                                                                                                   normalised basis.
        While cost-to-income ratios are generally above                                                                                                   Medium-term target > 17                                                                                                                                                                                                               Medium-term target 10,5–12,5
                                                                                                                                                                                                                                                                                                                                                                                                                                                             2
        50%, they are expected to trend lower over time.                                                                                                                                                                                                                                                                                                                                                                                                           Nedbank and FirstRand include associate income in
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   the calculation of the cost-to-income ratio, whereas
        Credit extension has been prudent, as reflected                                                                                                                                                                                                                                                                                                                                                                                                            Absa and Standard Bank exclude associate income.
        in low, but cyclically increasing CLRs. Nedbank                                                                                                                                                                                                                                                                                                                                                                                                            Nedbank’s cost-to-income ratio, excluding associate
        aims to improve our ROE and cost-to-income                                                                                                                                                                                                                                                                                                                                                                                                                 income, is 57,3%.
        ratios by delivering on our strategy.                                                                                                                                                                                                                                                                                                                                                                                                                3
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   Nedbank fully phased in the IFRS 9 day 1 impact, while
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   peers will be phasing in the impact over a three-year
      COVID-
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   period.
                                                                                                                                                                                                                                                                                      58,0

                                                                                                                                                                                                                                                                                                                                56,0
                                                                                                                                                                                                                                                                          56,5

       19

                                                                                                                                                                                                                                                                                                                                                                                                                                 14,0
                                                                                                                                                                                                                                                                                                                                                                                                                    12,4
                                                                                                                                                                                                                                                                                             52,1
                                                                                                                                                                15,0

                                                                                                                                                                                                         16,8
                                                                                                                                                                              15,8

                                                                                                                                                                                         21,2

                                                                                                                                                                                                                                                                                                                                                                                                           11,8
                                                                                                                                                                                                                                                                                                                                                                                                    11,5
                                                                                                                                                                                                                                                                                                                                                     80

                                                                                                                                                                                                                                                                                                                                                                      68
                                                                                                                                                                                                                                                                                                                                                             95
                                                                                                                                                                                                                                                                                                                                         82

                Targets are under review given the impact of
                the Covid-19 pandemic.                                                                                                                                                                                                                                                                                                                                                                                                                             Source: Nedbank, Absa, Standard Bank December 2019 annual
                                                                                                                                                 Nedbank                               Absa                 FirstRand                                     Standard Bank                                       Nedbank target           Nedbank              Absa           FirstRand        Standard Bank                   Nedbank target                         results. FirstRand December 2019 interim results

6     NEDBANK GROUP INTEGRATED REPORT 2019                                                                                                                                                                                                                                                                                                                                                                                                                                           NEDBANK GROUP INTEGRATED REPORT 2019                     7
INTEGRATED REPORT IR - Nedbank
NEDBANK GROUP        BEING POSITIONED           CREATING VALUE IN A         DELIVERING AND
                                                                                                                                                                                                                      AT A GLANCE            FOR VALUE             SUSTAINABLE MANNER           REWARDING FOR
                                                                                                                                                                                                                                             CREATION             THROUGH OUR STRATEGY          VALUE CREATION

                         OUR ORGANISATIONAL STRUCTURE, PRODUCTS
                         AND SERVICES
                         We deliver our products and services through four main business clusters.

                            NEDBANK CORPORATE AND                                                  NEDBANK RETAIL AND BUSINESS                                         NEDBANK WEALTH                                                        NEDBANK AFRICA REGIONS
                            INVESTMENT BANKING                                                     BANKING

                            Corporates, institutions and                                           Individual clients and businesses.                                    High-net-worth individuals, as                                      Retail, small and medium enterprises,
                            parastatals with a turnover of                                                                                                               well as other retail, business and                                  and business and corporate clients
                            over R750m per annum.                                                                                                                        corporate clients.                                                  across the countries we operate in.
           OUR CLIENTS

                            > 600 large corporate clients.                                         > 7,5 million clients including:                                     > 17 200 high-net-worth clients locally and internationally          > 336 000 clients.
                                                                                                   • > 296 000 small and medium enterprises (typically                  (United Kingdom, Guernsey, Jersey, Isle of Man and the
                                                                                                      businesses with an annual turnover of less than R30m).            United Arab Emirates (UAE)).
                                                                                                   • > 14 700 business-banking client groups with an annual
                                                                                                      turnover of between R30m and R750m per annum
                                                                                                      (client groups with turnover < R30m previously managed
                                                                                                      under Business Banking were migrated to small and
                                                                                                      medium enterprises).
                                                                                                   Of the total clients 2,95 million are retail main-banked.

                                                                                                   Full range of services on ‘banking
OUR PRODUCTS

                            Full suite of wholesale banking                                                                                                            Wide range of financial services,                                     Full range of banking services,
AND SERVICES

                                                                                                   and beyond’, including transactional-
                            solutions, including investment banking                                                                                                    including high-net-worth                                              including transactional, lending,
                                                                                                   banking, card solutions, lending
                            and corporate lending, global markets                                                                                                      banking and wealth                                                    deposit-taking and card
                                                                                                   solutions, deposit-taking, risk
                            and treasury, commercial-property                                                                                                          management solutions, as well                                         products, as well as selected
                                                                                                   management, investment
                            finance, deposit-taking, and                                                                                                               as asset management and                                               wealth management offerings.
                                                                                                   products, card-acquiring services
                            transactional banking.                                                                                                                     insurance offerings.                                                  Bancassurance offering in
                                                                                                   for businesses, ecosystems
                                                                                                   and platforms-based solutions.                                                                                                            selected markets.

                            • Strong franchise providing good returns.                           • A leader in business banking, underpinned by an accountable,       Nedbank Insurance                                                      SADC (own, manage and control banks)
                            • Market leader with strong expertise in commercial                    empowered, decentralised business service model.                   • Access to Nedbank clients – opportunities for greater                • Presence in five SADC countries – well positioned for
                              property, corporate advances, advisory and renewable-              • Differentiated and disruptive CVPs across our different              penetration and collaboration.                                         growth with a standard approach to business customised
OUR AREAS OF STRENGTH

                              energy financing.                                                    client segments, including Unlocked.Me, MobiMoney, Home-                                                                                    to fit each market context.
 AND DIFFERENTIATION

                                                                                                                                                                      • Market-leading digital innovations.
                            • Leading industry expertise in public sector, mining and              buying Toolkit, Karri school payments app, SimplyBiz® and                                                                                 • Technology investments to enhance CVPs and achieve
                                                                                                   API_MARKETPLACE.                                                   Nedbank Private Wealth                                                   scale (Banco Único winner of ‘best internet bank’ in
                              resources, infrastructure and telecoms.
                                                                                                 • Digital onboarding capability for transactional products           • Locally, first place for ESG/social impact investing in SA and         Mozambique).
                            • Solid advances pipeline (growth opportunities when                                                                                        philanthropic advice.
                              business confidence improves).                                       across various channels.                                                                                                                  • Winner of the fastest growing bank in Mozambique
                                                                                                 • Awarded accolades for the ‘best innovation in retail banking       • Internationally, Best Boutique Private Bank at the 2019                (Banco Único) at the Global Banking & Finance Awards.
                            • Integrated model delivering improved client service and                                                                                   WealthBriefing MENA Region Awards.
                              better coverage/deeper client penetration.                           in SA’, the ‘best customer service provider in
                                                                                                                                                                                                                                             Central and West Africa (ETI alliance – 21,2% shareholding)
                                                                                                   Africa’, and ‘most innovative Retail Bank South Africa’ in 2019.
                            • Ability to attract and retain high-quality intellectual capital.                                                                        Unique Best of Breed™ asset management model                           • The Ecobank–Nedbank Alliance: footprint across 39
                                                                                                 • Highly competitive relationship banking offering for our           • Nedgroup Investments has maintained its top three ranking              countries, the largest in Africa.
                            • Efficient franchise (best cost-to-income ratio) and high-            affluent (Professional Banking) and small-business clients.          in offshore asset management companies in SA for the fifth
                              quality portfolio (low CLR).                                                                                                                                                                                   • Increase dealflow by leveraging ETI’s local presence and
                                                                                                 • Continued and strong improvement in the annual Consulta              consecutive year.
                                                                                                                                                                                                                                               knowledge and Nedbank’s structuring expertise.
                                                                                                   SAcsi survey, NPS and social media sentiment.

                            ASSETS                 ADVANCES           HE CONTRIBUTION             ASSETS                 ADVANCES          HE CONTRIBUTION             AUM                    ADVANCES         HE CONTRIBUTION                ASSETS                 ADVANCES             HE CONTRIBUTION
           KEY METRICS

                            R544bn                                                                R378bn                                                               R331bn                                                                 R38,4bn
                            HE                                                                    HE                                                                   HE                                                                     HE
                            R6 167m                  49,6%                  49,3%                 R5 293m                   43,8%                42,3%                 R1 042m                    3,9%                8,3%                    R457m                      2,7%                  3,7%

                            ROE                                                                   ROE                                                                  ROE                                                                    ROE
                            17,7%                                                                 17,3%                                                                24,8%                                                                  7,7%

 8                       NEDBANK GROUP INTEGRATED REPORT 2019                                                                                                                                                                                                              NEDBANK GROUP INTEGRATED REPORT 2019   9
INTEGRATED REPORT IR - Nedbank
NEDBANK GROUP                                                                 BEING POSITIONED            CREATING VALUE IN A             DELIVERING AND
                                                                                                                                                                                                                                                                                                                                                  AT A GLANCE                                                                     FOR VALUE              SUSTAINABLE MANNER               REWARDING FOR
                                                                                                                                                                                                                                                                                                                                                                                                                                  CREATION              THROUGH OUR STRATEGY              VALUE CREATION

     OUR VALUE-CREATING BUSINESS MODEL
     Key drivers of change in our business model                                                                                                                    THE MACROECONOMIC                                                                                       DIGITAL                                                                    TRANSFORMATION OF SOCIETY                                                                                           SCARCE AND
                                                                                                                                                                       ENVIRONMENT                                                                                      TRANSFORMATION                                                                   WITHIN ENVIRONMENTAL                                                                                            EVOLVING SKILLS
                                                                                                                                                                    Managing through a difficult SA                                                               From physical products, services                                                           CONSTRAINTS                                                                                            Transforming and enabling our
                                                                                                                                                                    environment and investing in the                                                                 and channels to digital and                                                                Delivering on our purpose and the SDGs                                                                 workforce for the future
            For a discussion of our material matters refer to pages 35 to 44.                                                                                        rest of Africa for the long term                                                                      client-centred

                                                       O UR C APITAL S . . .                                                                  . . . E NAB L E VALU E - ADD IN G                                                                 ACTIV ITIES TH AT CR EATE ...                                                                                                                                                  ...VALUE FO R O UR S TA KEHOLDERS .

     INPUTS                                                                                                                                                                                                                                                                                                                                                                                                             OUTCOMES
                                                                                                                                                                                                                                              frica
     Financial                                                                                                                                                                                                                                         Prov  k in A                                                                                                                                                 Financial
                                                                                                                                                                                                                                                           idin
                                                                                                                                                                                                                                                          wor
                                                                                                                                                                                                     AS                                               net      go                                                                                                                                                   + Distributed R7,1bn in dividends        – ROE of 15,0%, down from 16,8%,
     • Equity of R98bn (2018: R91bn)                                                                                                                                                               RE                                                            ur c

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                STAKEHOLDERS IMPACTED
                                                                                                                                                                                                                                                                                      s
                                                                                                                                                                                                                                                                                   ice
                                                                                                                                                                                                 SA                                                                  lien                          rv                                                                                                                                                           however above cost of equity of 14,1%
     • Strong CET1 capital ratio: 11,5%, well above minimum regulatory requirement of 7,5%                                                                                        CU                                                                                     ts                   l se
                                                                                                                                                                                                                                                                                               wi
                                                                                                                                                                                                                                                                                                                                                                                                                    + Cost-to-income ratio improved
     • Banking advances of R764bn (2018: R713bn)                                                                                                                             C FO                                                                                                         c ia    th       n                                                                                                            from 57,2% to 56,5%                  – Share price down by 22,0%
                                                                                                                                                                                                                                                                                                        ac
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     • Deposits of R904bn (2018: R826bn)                                                                                                                                 TE                                                                                                                                 ss   st
                                                                                                                                                                       RA                ▲  15%
                                                                                                                                                                                            15
                                                                                                                                                                                            1 5%
                                                                                                                                                                                               %                                                                              Dep
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                                                                                                                                                                                                        oRR208bn
                                                                                                                                                                                                          R20
                                                                                                                                                                                                            08
                                                                                                                                                                                                            08
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                                                                                                                                                                                                                                                                                                                         e
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                                                                                                                                                                                                                                                                                                                               st
     • Tenth-most valuable SA brand (2018: ninth) and fourth-most valuable SA banking                                                                                                                                                                                                                                                                                                                               + IT modernisation programme (ME):                   + Attracted market-leading

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                                                                                                                                                                                                                                                                                                                                  f

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                                                                                                                                                                                                                                     ES

                                                                                                                                                                                                                                                                                                                                                                        Afric
     • A total of 29 403 employees (2018: 31 277), embracing a culture that is:                                                                                                                                                                                                                                                                                                                                                                                          Improved staff satisfaction
                                                                                                                                                                                                                                   TI            R                                                                                                                                                                  skills and diversity through:
       » client-driven and people-centred;                                                                                                                                                                                                                                                                                                                                                                                                                               levels:

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                                                                                                                                                                                                                                  R PURPOSE

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                                                                                                                                                                                                                                                                                                                                             s                                                                      + A more transformed workforce (79% black            the workforce environment:
       digital transformation (2018: R468m)
                                                                                                                                                   ▲ 11,
                                                                                                                                                     11,4%
                                                                                                                                                      14
                                                                                                                                                      1,4
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     • Experienced and diverse executive team and a strong board                                                                                                                   to manage,
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                                                                                                                                                                                         w alth                                                                                                                                                                                                                         although still below industry benchmark          – 158 staffmembers

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                                                                                                                                                                                                                                                                                                                                                                                                                        of 11–13%                                          retrenched

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     • 117 core IT systems (2018: 119), which are being modernised as                                                                                                                                                                                                                                                                                                                                                                                                  SA branches reduced by 2,5%

                                                                                                                                                                                                                                                                                                                                                                                nt
                                                                                                                                              es

       part of our technology journey                                                                                                                                                                                                                                                                                                                                                                               + Digitally active clients up to 1,8m (+16%)

                                                                                                                                                                                                                                                                                                                                                                                   i n
                                                                                                                                                                                                                                                                                                                                                                                                                                                                     – Data security issue at

                                                                                                                                                                                                                                                                                                                                                                  Bei                  all w
     • R9,6bn invested in our technology platform since 2010 (2018: R7,4bn)                                                                                                                                                                                                                                                                                                                                         + Digitised 114 of targeted > 180 branch           premises of third-party
     • 692 outlets (covering more than 84% of the population in SA), 4 398 ATMs and                                                                                                              TRANSACTIONAL
                                                                                                                                                                                                 TR
                                                                                                                                                                                                 T     NS
                                                                                                                                                                                                       NSACTIO
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                                                                                                                                                                                                                                                                                                                                  sc
                                                                                                                                                                                                                                                                                                                                                                                                                        Promoter Score in 2019
                                                                                                                                                              t

     • Embracing sustainable development financing to meet the SDGs as well
                                                                                                                                                                                                                                                                                      ▲ 7,2%
                                                                                                                                                                                                                                                                                        7 2%                                                                                                                                                                               practices (> 75% locally

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       as responsible ESG practices                                                                                                                                 ba                                                                                                                                           re    i                                                                                                                                                   procured)
     • One of SA’s most transformed banks                                                                                                                             nk             ▲3
                                                                                                                                                                                      3,8%
                                                                                                                                                                                      3,,8%
                                                                                                                                                                                          %                                                                                          tto
                                                                                                                                                                                                                                                                                       o R31,4m
                                                                                                                                                                                                                                                                                         R31,4
                                                                                                                                                                                                                                                                                          31 m
                                                                                                                                                                                                                                                                                          31,
                                                                                                                                                                                                                                                                                          3                         tim
                                                                                                                                                                                                                                                                                                                   so                                                                                                   middle and professional segments                 + MSCI ESG rating improved
                                                                                                                                                                         i   ng                                                                                                                                   op ur
                                                                                                                                                                                                                                                                                             ce            o                                                                                                        +   Number of client complaints down 26,5%
     • Solid relationships across all stakeholders                                                                                                                                fra                                                                                                                    st                                                                                                                                                                from A to AA
                                                                                                                                                                                                                                                                                               st
                                                                                                                                                                                     nc                                                                                                          oo
                                                                                                                                                                                                                                                                                                      rce                                                                                                           +   R11,6bn direct and indirect tax contributions    – Decline in main-banked
                                                                                                                                                                                       h is                                                                                                         ou
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                                                                                                                                                                                             as                                                                          ise                                                                                                                                        +   More than 3 300 YES recruits for 2019              clients in the entry-level
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                                                                                                                                                                                                     th a                                                                                                                                                                                                           +                                                      and youth segments
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                                                                                                                                                                                                                                                            Man                                                                                                                                                     +   Maintained level 1 BBBEE contributor status
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                                                                                                                                                                                                                               rket           es

     Natural                                                                                                                                                                                                                                                                                                                                                                                                        Natural
     • We impact the natural environment directly in our operations and                                                                                                                                                                                                                                                                                                                                             +   The first SA commercial bank to launch a green bond on the JSE
       indirectly through the financing of client activities:                                                                                                                                                                                                                                                                                                                                                       +   Disbursed R27bn renewable-energy deals adding 3 517 MW to the national grid
                                                                                                                                                                                                                                                                                            + Positive outcome
       » leader in renewable-energy financing; and                                                                                                                                                                                                                                                                                                                                                                  +   Carbon-neutral operations and effectively net-zero operational water usage
                                                                                                                                                                                                                                                                                            – Negative outcome
       » a total of nine Green Star-rated buildings                                                                                                                                                                                                                                                                                                                                                                 +   Supporting the transformation of the energy system over time through
                                                                                                                                                                                                                                                                                               Neutral outcome                                                                                                          interventions such as our new Thermal Coal Policy

10   NEDBANK GROUP INTEGRATED REPORT 2019                                                                                                                                                                                                                                                                                                                                                                                                                       NEDBANK GROUP INTEGRATED REPORT 2019       11
INTEGRATED REPORT IR - Nedbank
NEDBANK GROUP                  BEING POSITIONED               CREATING VALUE IN A               DELIVERING AND
                                                                                                                                                                                                                  AT A GLANCE                      FOR VALUE                 SUSTAINABLE MANNER                 REWARDING FOR
                                                                                                                                                                                                                                                   CREATION                 THROUGH OUR STRATEGY                VALUE CREATION

     OUR STAKEHOLDERS –
     THEIR NEEDS AND EXPECTATIONS
     As a financial services provider we are deeply connected to the environment we operate in and the societies we serve. Our ability to
     deliver value is dependent on our relationships and the contributions and activities of our stakeholders. By providing for their needs
     and meeting their expectations we create value for our stakeholders and for Nedbank.
                                                                                                                                                          Shareholders and investors
                                                                                                                                                                              Retail investors, asset
                                                                                                                                                                                management and                                       THEIR NEEDS AND EXPECTATIONS
                                                                                                                                                                              retirement funds in SA                                 Shareholder value creation through share price appreciation and an
         Staff                                                                                                                                                                  and in international                                 attractive and sustainable dividend stream, enabled by the following:
                                                                                                                                                                                      markets
                                                                                                                                                                                                                                     • Growth in NAV.
                                                                                                                                                                                                              Two credit
                                                                         THEIR NEEDS AND EXPECTATIONS                                                                                                     ratings agencies:          • Sustainable financial returns, with ROE exceeding COE.
                               29 403                                    • Fair remuneration, effective performance management, and
                                                                                                                                                      Bondholders                                           Moody’s                  • Attractive and sustainable growth strategy.
                               employees                                   recognition.
            63%                                     90%                  • Challenging work, with opportunities to make a difference.
                                                                                                                                                                                                               and                   • Sound balance sheet to protect against downside risk.
             female                                SA-based                                                                                                                                                 Standard                 • Strong and experienced management.
                                                                         • Career development and advancement opportunities.
             37%                                    10%                                                                                                                                                     & Poor’s                 • Transparent reporting and disclosure.
              male                                  Africa and           • Employment at a company with a strong brand.
                                                  international                                                                                                                                                                      • Sound ESG practices.
                                                                         • An empowering and enabling environment that embraces diversity
                                                                           and inclusivity.                                                                                                               45 573                     KEY OBJECTIVES AND METRICS WE TRACK
                                                                                                                                                                                                          ordinary and
                                                                         • A safe and healthy work environment                                                    12                                                                 • NAV per share growth.                       • Dividends paid and dividend cover.
                                                                                                                                                                sell-side                                   6 410                    • ROE and cost-to-income ratios.              • AGM voting outcomes.
                                                                                                                                                                analysts                                   preference
             79%                                                         KEY OBJECTIVES AND METRICS WE TRACK
                                                                                                                                                                                                          shareholders               • Price-to-book ratios.                       • ESG ratings.
              black                                                      • A culture that is client-centred and innovative.
                                                    20%
             21%                                   under the             • A diverse and inclusive staff profile.
              white                                age of 30

                                                                                                                                                          Regulators

                                                                                                                                                                                   SARB                                              THEIR NEEDS AND EXPECTATIONS
         Clients                                                                                                                                                                 Prudential                                          • Compliance with all legal and regulatory requirements.
                                                                                                                                                                                 Authority                                           • Being a responsible taxpayer in all jurisdictions where we conduct
                                                                                                                                                                                                                                       business.
        7,8 million retail, wealth, SME, business                        THEIR NEEDS AND EXPECTATIONS                                                    Financial                                          National
                                                                         • Innovative solutions and services, including lending, deposit-taking,                                                                                     • Active participation and contribution to industry and regulatory
        banking and corporate clients:                                                                                                                    Sector                                             Credit                    working groups.
                                                                           transactional and advisory services, global markets, wealth
        • Individuals from children to seniors and from entry-level
                                                                           management, asset management and insurance.                                   Conduct                                           Regulator
          clients to high-net-worth individuals.
                                                                         • Convenient access to banking (channel of choice), increasingly through
                                                                                                                                                         Authority                                           (NCR)                   KEY OBJECTIVES AND METRICS WE TRACK
        • Various legal entities such as trusts, non-governmental                                                                                                                                                                    • Effective delivery of compliance with regulatory change and meet
          entities and associations, small businesses, large               digital channels.                                                              (FSCA)
                                                                                                                                                                                                                                       minimum regulatory requirements.
          corporates and the public sector.                              • Excellence in client service.
                                                                                                                                                                                                                                     • Basel III capital ratios, as well as LCR and NSFR compliance, exceed
                                                                         • Value-for-money banking that is competitive and transparent in pricing.                                                                                     the minimum SARB requirements with suitable buffers.
         > 7,5 million                         > 17 200                  • Responsible banking services and solutions, and a trusted financial
                                                                                                                                                     South African
              retail clients                     wealth clients                                                                                        Revenue                                                                       • CLR within our 60 bps to 100 bps TTC target range.
                                                                           partner.
                                                                                                                                                       Service                                         Other*                        • Direct and indirect tax contributions.

                                                                         KEY OBJECTIVES AND METRICS WE TRACK                                            (SARS)                                                                       • BBBEE contributor status (Amended FSC).
                                                                         • Brand value among SA companies and banking peers.
                                                                                                                                                     * Among others, foreign revenue authorities, various government departments and chapter 9 institutions, including the Department of Trade and Industry (the dti), the
      > 14 700                                         > 600             • NPS and client satisfaction ratings.
                                                                                                                                                      Department of Labour, the National Treasury, the Financial Intelligence Centre (FIC) and the JSE. We also comply with various regulatory bodies outside SA, including central
          BB clients                                corporate clients    • Client complaints.                                                         banks and local financial services regulators of countries in which we have representation or operations.

                                                                         • Wholesale league tables.
                                                                         • SA asset manager rankings (Raging Bull Awards).
                                                                                                                                                          Society
                                                                         • Impactful solutions that make a difference (eg aligned to SDGs).
          > 296 000                         > 336 000
              SME clients                      Nedbank Africa                                                                                                                                                                        THEIR NEEDS AND EXPECTATIONS
                                               Regions clients
                                                                                                                                                        Citizens of the                                 The
                                                                                                                                                                                                                                     • Nedbank providing access to expert financial advice, products and
                                                                                                                                                       countries in which                           environment                        solutions that help to achieve desired outcomes for individuals, their
                                                                                                                                                          we operate,                                  on which those
                                                                                                                                                                                                                                       families, their businesses and their communities.
                                                                                                                                                         comprising individual                      citizens depend for
                                                                                                                                                         members of society                            their wellbeing               • Nedbank partnering on common social and environmental issues.
           For more details on how we delivered for our stakeholders and on our targets refer to pages 74 to 87.                                        and non-governmental                                                         • Nedbank using its resources to promote social and environmental
                                                                                                                                                            organisations                                                              issues as well as other common agendas to build a thriving society.
                                                                                                                                                                                                                                     • Nedbank embracing transformation through (among other things)
                                                                                                                                                                                                                                       delivery in line with BBBEE legislation.

                                                                                                                                                                                                                                     KEY OBJECTIVES AND METRICS WE TRACK
                                                                                                                                                                                                                                     • Recognised as a leader in the financing of sustainable development
                                                                                                                                                        Partners                                                                       to meet the SDGs, thereby promoting socioeconomic transformation
                                                                                                                                                                                                            Suppliers                  through enabling economic inclusion, job creation and poverty alleviation.

12   NEDBANK GROUP INTEGRATED REPORT 2019                                                                                                                                                                                                                                            NEDBANK GROUP INTEGRATED REPORT 2019             13
INTEGRATED REPORT IR - Nedbank
NEDBANK GROUP              BEING POSITIONED          CREATING VALUE IN A            DELIVERING AND
                                                                                                                                                                                                                       AT A GLANCE                  FOR VALUE            SUSTAINABLE MANNER              REWARDING FOR
                                                                                                                                                                                                                                                    CREATION            THROUGH OUR STRATEGY             VALUE CREATION

                                                                                                                                                                 The work being done by the YES initiative                                                                For SA, this will be another blow to an already
                                                                                                                                                                                                                      RESHAPING FINANCE
     BEING                                                                                                                                                       is very important and significant in creating
                                                                                                                                                                 sustainable work opportunities for unemployed
                                                                                                                                                                 youth.
                                                                                                                                                                                                                      At the World Economic Forum in January
                                                                                                                                                                                                                      2020, BlackRock, the world’s largest asset
                                                                                                                                                                                                                      manager and one of our shareholders,
                                                                                                                                                                                                                                                                          stagnant economy. There is no doubt that
                                                                                                                                                                                                                                                                          turbulent times lie ahead and we will all
                                                                                                                                                                                                                                                                          have to adjust to the new normal post the
                                                                                                                                                                                                                                                                          pandemic.

     POSITIONED                                                                                                                                                  We have embraced our role as change agents
                                                                                                                                                                 and active contributors to building a thriving
                                                                                                                                                                 society and are extremely proud to have
                                                                                                                                                                 welcomed 3 315 recruits to Nedbank and our
                                                                                                                                                                                                                      noted that climate change would lead
                                                                                                                                                                                                                      to a ‘fundamental reshaping of finance’.
                                                                                                                                                                                                                      Nedbank endorses the objectives of the
                                                                                                                                                                                                                                                                          APPRECIATION
                                                                                                                                                                                                                                                                          Thank you to our 29 403 employees who
                                                                                                                                                                                                                      United Nations Framework Convention

     FOR VALUE                                                                                                                                                   implementation partners in May 2019. From
                                                                                                                                                                 being one of the first to sign the CEO initiative
                                                                                                                                                                 and making the biggest commitment to YES,
                                                                                                                                                                                                                      on Climate Change (UNFCCC) and of the
                                                                                                                                                                                                                      Paris Agreement to prevent dangerous
                                                                                                                                                                                                                      anthropogenic interference with the climate
                                                                                                                                                                                                                                                                          remain committed to living our purpose
                                                                                                                                                                                                                                                                          and serving our 7,8 million clients. Your work
                                                                                                                                                                                                                                                                          goes beyond our lending and transactional
                                                                                                                                                                                                                                                                          activities and I am proud to be associated

     CREATION                                                                                                                                                    we understand the need to partner with our
                                                                                                                                                                 social partners to accelerate economic growth.

                                                                                                                                                                 LEADING WITH
                                                                                                                                                                                                                      system by limiting the global average surface
                                                                                                                                                                                                                      temperature rise to well below 2˚C versus
                                                                                                                                                                                                                      the long-term preindustrial level. As part of
                                                                                                                                                                                                                                                                          with you. During the lockdown period, as a
                                                                                                                                                                                                                                                                          consequence of Covid-19, you have further
                                                                                                                                                                                                                                                                          shown your dedication and tenacity by
                                                                                                                                                                                                                      our journey as a purpose-led business, we
     REFLECTIONS FROM                                                                                                                                            INTEGRITY AND                                        are committed to playing a leading role in
                                                                                                                                                                                                                      addressing climate change in ways that are
                                                                                                                                                                                                                                                                          enabling us to continue to serve our clients and
                                                                                                                                                                                                                                                                          the broader societies through a complex and
                                                                                                                                                                 EMPATHY
     OUR CHAIRMAN                                                                                                                                                The risk and corporate governance landscape
                                                                                                                                                                                                                      sensitive to the local socioeconomic context
                                                                                                                                                                                                                      and climate vulnerability.
                                                                                                                                                                                                                                                                          difficult time – I am deeply grateful.
                                                                                                                                                                                                                                                                          Thank you to our Chief Executive, Mike
                                                                                                                                                                 is changing rapidly. Corporate conduct                                                                   Brown, and the executive team for their
                                                                                                                                                                 continues to come under scrutiny. Evolving           Nedbank’s climate change journey continues
                                                                                                                                                                                                                                                                          leadership and skilfully steering the ship in
          As a trusted brand with a growing footprint in Africa and innovative                                                                                   governance and controls for automation, big          to mature through the development of our
                                                                                                                                                                                                                                                                          stormy waters. The team quickly pivoted to
          new products and services, Nedbank is well positioned to build on the                                                                                  data and digitisation have introduced new            policy regarding the financing of thermal-
                                                                                                                                                                                                                                                                          manage the crisis brought on by Covid-19
                                                                                                                                                                 questions to a board attempting to steer             coal mining and related activities. As part of
          positive and sustainable impact it has already made. The social and                                                                                                                                         this ongoing and maturing journey, we will
                                                                                                                                                                                                                                                                          and I am confident in the leadership team’s
                                                                                                                                                                 a ship in uncertain waters. The Nedbank                                                                  ability to successfully navigate us through this
          economic impact of Covid-19 is unlike anything we have seen before.                                                                                                                                         continue to engage with clients, shareholders,
                                                                                                                                                                 board continues to adapt to this changing                                                                extraordinary time.
          Global markets and equities have come under pressure and in SA                                                                                         environment. What remains important,                 governments, relevant non-government
                                                                                                                                                                                                                      organisations and thought-leaders so as             Thank you to my fellow Nedbank
          we have had the dual impact of the lockdown as well as the ratings                                                                                     however, when presented with these new risks,
                                                                                                                                                                                                                      to ensure we continue to play an important          boardmembers for their support and
          downgrades. We are more focused than ever on remaining future                                                                                          from cyberrisk to contemplating regulatory
                                                                                                                                                                                                                      role in leading the energy transition through       a special word of appreciation to Joel
                                                                                                                                                                 change from emerging technologies, is that
          fit in fulfilling our role to our clients, our staff, shareholders                                                                                     Nedbank remains guided by our values. Our            innovative solutions and appropriate                Netshitenzhe. His wisdom, guidance, intellect
          and broader society.                                                                                                                                   responsibilities and our commitment to our           financial choices. Our governance has been          and experience will be missed during our
                                                                                                                                                                                                                      further bolstered by the establishment              board deliberations. In addition, thank
                                                                                                                                                                 purpose will not change.
          Vassi Naidoo, Chairman                                                                                                                                                                                      of a new Climate Risk Leadership Group.             you to Peter Moyo for his contribution
                                                                                                                                                                 In response to the recent dramatic changes in        This formal governance committee, under             and involvement with the group since
                                                                                                                                                                 the macro environment and the impact of the          the chairmanship of the Nedbank Chief               his appointment in 2018 in terms of the
     In a difficult environment, the beginning of a new year always brings       It comes as no surprise that company profits and household finances             Covid-19 pandemic, the board of directors has        Risk Officer, guides Nedbank with regard            relationship agreement between Old Mutual
     with it a sense of renewed hopefulness and optimism that things will be     deteriorated during the year. In particular, the increase in impairments        unanimously agreed to a zero percent increase        to the process of measuring, assessing              Limited and Nedbank Group.
     better in the year ahead. In 2018, Cyril Ramaphosa became President         off a low base had a negative impact on Nedbank’s headline earnings             in non-executive directors’ fees for the period      and disclosing its financial exposure to
     and expectations of a better year for South Africa in 2019 surged. We       in 2019.                                                                                                                                                                                 In Charles Dickens’ novel Great Expectations,
                                                                                                                                                                 1 July 2020 to 30 June 2021.                         climate-related risks. This committee is
     had great expectations that the right medication (no matter how bitter)                                                                                                                                                                                              the author was persuaded to write a
                                                                                 Given the challenging macroeconomic environment, we will, as always,            Ongoing vigilance is required to ensure that         also supported by a Climate Task Team
     would be administered to fix a nation reeling from the impacts of state                                                                                                                                                                                              happier ending to the book after the original
                                                                                 continue to look for innovative ways to assist our clients to weather the       the public trust that has been established over      that assists with the operationalisation of
     capture. It was not to be in 2019.                                                                                                                                                                                                                                   ending was deemed too sad. Our country
                                                                                 storm and deliver great client experiences to ensure their loyalty and          our long history – through sound governance          strategic climate-change-related decisions.
                                                                                                                                                                                                                                                                          is at a turning point and skilful, economic
     The factors largely responsible for much of SA’s economic woes are not      our continued license to operate.                                               and good conduct – is secure.                        In 2019 we signed up to be part of the UNEP
                                                                                                                                                                                                                                                                          leadership is needed. Implementing some of
     new and have remained mostly unaddressed for more than a decade and                                                                                                                                              FI Task Force for Climate-related Financial
                                                                                                                                                                                                                                                                          the good plans mentioned in the 2020 State
     as a result economic growth has continued to trend downwards.               50 YEARS ON THE JSE                                                             DIGITAL DISRUPTION                                   Disclosures working group, which will enable
                                                                                                                                                                                                                                                                          of the Nation address combined with some
                                                                                 Nedbank celebrated its 50th year as a listed company on the                                                                          us to learn from others in the sector as well
     This ‘slow squeeze’ in economic growth and sagging tax revenues, has in                                                                                     Digital disruption is the new normal. The digital                                                        conviction in getting the nation’s finances in
                                                                                 Johannesburg Stock Exchange in 2019. There is a certain amount of                                                                    as participate in the development of tools
     large part been attributed to the lack of progress on the much-needed                                                                                       banking race has begun as a sprint, but it is                                                            order could see a dramatic turn in investor
                                                                                 agility that has helped us navigate both the headwinds and tailwinds                                                                 to assess the physical and transitional risk
     structural reform, compounded by the rapid growth in the public sector                                                                                      going to be a marathon, and we continue with                                                             confidence toward SA and hopefully we can
                                                                                 over the past 50 years and speaks to our sustainable business                                                                        that climate change poses for banks. We
     wage bill, increased government spending commitments and the erosive                                                                                        our investments in this area. I am mindful that                                                          write a new ending to this story.
                                                                                 practices, and improved risk management and overall governance over                                                                  commit to report on Nedbank’s approach
     impact of wasteful and corrupt spending over the past decade. More                                                                                          the winners have not emerged yet, despite
                                                                                                                                                                                                                      to measuring, disclosing and assessing our          From a Nedbank perspective we are
     recently, the perilous financial and operational state of most major SOEs   the years.                                                                      what many may infer.
                                                                                                                                                                                                                      exposure to climate-related risks.                  preparing to be future-fit. As a trusted
     has compounded the strain on government’s finances. The unreliable and      Notwithstanding the challenges outlined above, the SA we operate in             The Fourth Industrial Revolution presents as                                                             brand with a growing footprint in Africa
     increasingly expensive electricity supply has come at a huge economic       today is far removed and a much better place to do business than it was                                                              I am pleased that Nedbank has once again
                                                                                                                                                                 many challenges as it does opportunities.                                                                and innovative new products and services,
     cost.                                                                       50 years ago. The market is larger and more inclusive. I believe Nedbank                                                             achieved a level 1 BBBEE contributor status
                                                                                                                                                                 Today we have digital capabilities that have                                                             I believe Nedbank is well positioned to build
                                                                                 has the potential to bring significant tangible value to SA’s future                                                                 for the full year 2019 under the Amended
     Regulatory, legislative and policy uncertainties continued to weigh on                                                                                      the power to transform experiences; improve                                                              on the positive and sustainable impact it has
                                                                                 through its experience and expertise and its strong desire to partner                                                                Financial Sector Code in South Africa. We
     business and investor confidence. While government has promised                                                                                             connectivity and knowledge sharing between                                                               already made. We look forward to continuing
                                                                                 with government, labour and civil society in realising the vision and goals,                                                         have always seen transformation as one
     to bring clarity, progress has been frustratingly slow and patchy.                                                                                          humans; creating access; improving lives and                                                             delivering on our purpose to use our financial
                                                                                 set out in our country’s Constitution and the National Development Plan.                                                             of the key strategic focus areas for our
     Uncertainties persist and disputes continue around land reform, National                                                                                    indeed customer outcomes.                                                                                expertise to do good for individuals, families,
                                                                                                                                                                                                                      business and this achievement demonstrates
     Health Insurance, the mining charter, the new competition policy, further                                                                                                                                                                                            businesses and society. In the challenging
     rounds of debt relief as well as proposed legislation on intellectual
                                                                                 A TRANSITIONING SKILLSET AND                                                    I would like to take this opportunity to welcome     our ongoing commitment to sustainable
                                                                                                                                                                                                                                                                          economic environment of 2020 we are
                                                                                                                                                                 Professor Tshilidzi Marwala to the Nedbank           transformation.
     property rights.                                                            WORKFORCE                                                                       board, who brings extensive knowledge and
                                                                                                                                                                                                                                                                          committed to support and work alongside
                                                                                                                                                                                                                                                                          our clients and staff alike in what is likely to be
     The controversial and damaging visa regulations for adults travelling       New technologies are impacting customer behaviours and how they                 experience in these specific digital capabilities    A NEW NORMAL                                        a long road to recovery post the pandemic.
     with children were finally scrapped. President Ramaphosa hosted the         consume banking services. A constantly learning workforce that is               and insights.                                        At the time of concluding this note, the            I would also like to assure our shareholders,
     second annual SA Investment Conference, promising to cut red tape           adaptable to these changes is a key competitive advantage and                                                                        Covid-19 pandemic had reached our shores
                                                                                                                                                                 The Nedbank board has spent a lot of time                                                                that while we won’t escape the market impact
     and reduce the cost of doing business. More investment commitments          reskilling is therefore a strategic imperative for us to remain relevant.                                                            and all indications point to a global human and
                                                                                                                                                                 on Nedbank’s strategic response to this                                                                  that has plagued the sector, the board
     were made by private firms. The Minister of Energy finally released the     This has meant that many roles continue to be impacted by digitisation.                                                              economic catastrophe.
                                                                                                                                                                 changing environment from a culture, staff                                                               together with management, are working
     long-awaited Integrated Resource Plan that envisions a greater role for     As a result, 2019 required of us to step up our efforts of reskilling and
                                                                                                                                                                 and client point of view. We recognise that the      Economists and analysts worldwide are               tirelessly to manage through this difficult
     renewable energy and independent power producers although traditional       redeployment, to ensure that redundancies and retrenchments were
                                                                                                                                                                 challenge of the digital talent gap is no longer     predicting a global recession for 2020.             period and continue to build a sustainable
     coal-fired power and Eskom are still expected to play a dominant role.      done responsibly and staying true to our commitment to only retrench
                                                                                                                                                                 just an organisational issue; it is a nationwide     Central banks have already started                  bank.
                                                                                 as the last resort.
     SA managed to stave off a sovereign-risk-rating downgrade by Moody’s                                                                                        challenge. The result is that talent acquisition,    introducing fiscal and monetary actions, and
     in 2019. However, SA was subsequently downgraded in March 2020 by           In 2018, the President called on business to play an active role in the fight   training and upskilling will take on a whole         with the banking sector likely to be one of
     both Moody’s and Fitch, retaining a negative outlook given the ongoing      against poverty, unemployment and inequality to help build an inclusive,        new meaning particularly as the rate at which        the most impacted, banking regulators have
     risks, particularly in the light of the Covid-19 pandemic.                  growing and transforming economy for the benefit of all South Africans.         some jobs may become obsolete or irrelevant          begun to introduce capital and liquidity relief     Vassi Naidoo
                                                                                 Given the challenges facing SA, we know this requires collaboration from        due to new technologies is rapidly increasing.       measures.                                           Chairman
                                                                                 all sectors of society – and at scale; it cannot be business as usual.

14   NEDBANK GROUP INTEGRATED REPORT 2019                                                                                                                                                                                                                                       NEDBANK GROUP INTEGRATED REPORT 2019            15
INTEGRATED REPORT IR - Nedbank
NEDBANK GROUP             BEING POSITIONED          CREATING VALUE IN A         DELIVERING AND
                                                                                                                                                                                                                                               AT A GLANCE                 FOR VALUE            SUSTAINABLE MANNER           REWARDING FOR
                                                                                                                                                                                                                                                                           CREATION            THROUGH OUR STRATEGY          VALUE CREATION

     OUR PURPOSE, VISION AND VALUES                                                                                                                                                        DELIVERING VALUE BY DELIVERING ON OUR PURPOSE
                                                                                                                                                                                            We understand that our success depends on the degree to which we deliver value to society. It is therefore
                                                                                                                                                                                            important to understand our role in society and how society can be different, because Nedbank is a part of it. Banks
               OUR                      To use our financial expertise to do good for                                                                                                       play a crucial role in facilitating economic activity and enabling sustainable growth and development by moving
           PURPOSE                                                                                                                                                                          capital from where it is to where it is required. A deep understanding of one’s purpose helps to guide strategy and
                                        individuals, families, businesses and society                                                                                                       decisionmaking in this regard and should result in an optimal balance between long-term value creation and short-
                                                                                                                                                                                            term results.

         OUR VISION                                                                                                  OUR BRAND PROMISE
         To be the most admired financial services                                                                                                                                                                                                                  SHAREHOLDERS
         provider in Africa by our staff, clients,                                                                                                                                             STAFF                                                                The financial capital we source from our equity and debt
                                                                                                                                                                                               Our 29 403 staff are key to making Nedbank a great                   investors and our retained earnings enable business continuity
         shareholders, regulators and society                                                                                                                                                  place to bank and work. Motivated and skilled staff,                 and growth, including strategic investments.
                                                                                                                                                                                               together with efficient and value-creating solutions,
                                                                                                                                                                                               services and operations, offer value to our clients.                 Value is created through …
                                                                                                                                                                                               Staff, as part of society, contribute materially to the              • increasing net asset value, returns, dividends and share price;
                                                                                                                                                                                               communities in which they live and work.                             • maintaining a strong balance sheet to protect against
     NEDBANK SUSTAINABLE DEVELOPMENT FRAMEWORK                                                                                                                                                 Value is created through …
                                                                                                                                                                                                                                                                      downside risk;
                                                                                                                                                                                                                                                                    • sustainably investing in and growing our client franchises and
                                                                                                  IN V E S T M E                                                                               • employing citizens in the jurisdictions in which we
                                                                                         C   IA L                N   T                                                                                                                                                our people; and
        Our purpose guides our strategy, behaviours                                   SO                                                                                                         operate;
                                                                                  E                                                                                                                                                                                 • following good governance and sustainable business
                                                                              T

        and actions towards delivery of long-term                                                                                                                                              • rewarding staff for the value they add;
                                                                            RA

                                                                                                                                                                                                                                                                      practices that ensure a sustainable business for the long term.
                                                                      PO

        value. We are aware that operating a                                                                                                                                                   • creating job opportunities as we grow;
                                                                     CO R

        successful and sustainable business                                                                                                A BLE
                                                                                                                                                   DEVELOP
                                                                                                                                                             ME
                                                                                                                                     AIN                          NT                           • encouraging our staff to embrace technological
        requires a thriving economy, a well-                                                                                       ST                                  FIN
                                                                                                                              SU                                             AN                  changes, further their careers and improve our                     GOVERNMENT
        functioning society and a healthy                                                                                                                                         C
        environment. We also know that we have                                                                                                                                                   services and products; and

                                                                                                                                                                                  E
                                                                                                                                                                                                                                                                    The tax we pay and investments in bonds we make as part of
        a responsibility and an opportunity to                                                                                                                                                 • contributing to the transformation towards an                      our statutory liquid asset requirements are imperative for the
        contribute to these.                                                                                                                                                                     inclusive society through employment equity and                    economic and social development of the countries in which we operate.
                                                                                                                                                                                                 gender equality.
        As such, our response cannot be a                            S
                                                            I   ON                                                                                                                                                                                                  Value is created through …
        secondary aspect of our business                 AT
                                                    ER

        – it must be central to it, with a                                                                                                                                                                                                                          • contributing meaningfully to government budgets through our
                                                OP

        commitment to sustainable                                                                                                                                                     NEDBANK GROUP                                                                   own corporate taxes and staff paying personal taxes; and
        development as the only                                                                                                                                                       A strong and profitable business enables                                      • investing in government and public sector bonds as required by
        reasonable response. We believe                                                                                                                                               continued investment in our staff and                                           prudential regulation, thereby supporting the funding needs of
        that this approach is not only                                                                                                                                                operations, which in turn creates value for                                     government.
        desirable but also achievable. For                                                                                                                                            our clients, shareholders and society at
        Nedbank, this is the future we                                                                                                                                                large. Trust is core to our relationships with
        want. And we are committed to                                                                                                                                                 all our stakeholders and to creating value.                                   REGULATORS
        doing our share to realise it.                                                                                                                                                                                                                              Regulation ensures a sound and stable banking system,
                                                                                                                                                                                                                                                                    which reduces systemic risk and promotes the healthy
        Mike Brown, Chief Executive
                                                                                                                                                                                                                                                                    functioning of an economy in which all stakeholders prosper.
                                                                                                                                                                                               CLIENTS                                                              Good governance and compliance support client confidence
                                                                                                                                                                                               Our clients remain our largest source of deposits,                   in Nedbank and reduce the potential for reputational risk. We
                                                                                                                                                                                               which enable us to fund lending activities. Gaining                  have a responsibility to comply fully with the regulations of the
                                                                                                                                                                                               more clients and deepening existing relationships                    countries in which we operate.
                                                                                                                                                                                               result in greater revenue growth, while responsible
         OUR EMPLOYEE VALUE PROPOSITION:                                                                                                                                                       banking practices and worldclass risk management                     Value is created through …
         BEING THE DIFFERENCE THAT IMPACTS OUR WORLD                                                                                                                                           mitigate bad debts.                                                  • embracing sustainable banking practices and regulatory
               Purpose-                 Service                                   High                                    Growth and                    Diversity and                                                                                                 compliance, which enable a safe and stable banking system
                  led                  excellence                             performance                                development                      inclusion                            Value is created through …                                             and a thriving society.
                                                                                                                                                                                               • safeguarding deposits, investments and wealth,
                                                                                                                                                                                                 while growing returns;
                                                                                                                                                                                                                                                                    BROADER SOCIETY
                                                                                                                                                                                               • providing credit that enables wealth creation,
                                                                                                                                                                                                                                                                    We embrace our role in society as an active contributor to
                                                                                                                                                                                                 sustainable development and job creation in line
                                                                                                                                                                                                                                                                    building a thriving society and can do this only with engaged
                                                                                                                                                                                                 with the SDGs;
                                                                                                                                                                                                                                                                    communities that have aligned values.
                                                                                                                                                                                               • facilitating transactions that are the backbone of
                                                                                                                                                                                                 economic value exchange;                                           Value is created through …
                                                                                                                                                                                               • enabling financial inclusion by providing the                      • transforming economies and society positively through our
                                                                                                                                                                                                 previously unbanked with access to affordable                        lending and transactional activities, which are increasingly
                                                                                                                                                                                                 products;                                                            aligned with the SDGs;
                                                                                                                                                                                               • providing financial education and advice; and                      • playing a meaningful role in the broader society as a
                                                                                                                                                                                                                                                                      procurer and consumer of goods and services; and
         OUR VALUES                                                                                                                                                                            • developing innovative solutions that meet our
                                                                                                                                                                                                 clients’ specific needs.                                           • making a difference through our partnerships and CSI
          Integrity         Respect          Accountability                                         People-centred                            Client-driven                                                                                                           activities.

                                                                                                                                                                                                  Read more about our value creation for our stakeholders on pages 74 to 87.

16   NEDBANK GROUP INTEGRATED REPORT 2019                                                                                                                                                                                                                                                              NEDBANK GROUP INTEGRATED REPORT 2019   17
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