INTEGRATED REPORT IR - Nedbank
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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
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
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
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
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
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
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
GI New
New loan
ew oa
an pa
a payouts
ayouts
ts
ts ina
ce f + NAV per share up by 3,7% – Headline earnings R12,5bn, down 7,2%
• Deposits of R904bn (2018: R826bn) TE ss st
RA ▲ 15%
15
1 5%
% Dep
ep
pos
posits
p sitts
Depositss be to
the
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oRR208bn
R20
08
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9,5%
9,5
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to
e
Intellectual
R
Intellectual
be
ss
tto R9
R904bn
04bn
U
ce
O
st
• Tenth-most valuable SA brand (2018: ninth) and fourth-most valuable SA banking + IT modernisation programme (ME): + Attracted market-leading
c
f
ha
in
brand (2018: fifth) 70% complete
an
CREDIT
CRE
R DT
RE skills in areas such as data
t
wi
cia
• Market-leading IT capabilities (Managed Evolution and Digital Fast Lane) + Implemented a market-leading end-to-end analytics, IT, equities and
S
O
ts
EXT
EXTENS
E TEN N ON
EXTENSION N FUND
FUNDING
N ING G AND
AND D
ls
advisory solutions
UT
retail digital onboarding capability (Eclipse)
n
• A leader in renewable-energy finance, corporate and commercial-property lending,
er
UT
Extend
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end cre
e credit
ed t thro
through
hrough
h h
e
DEPOSITS
D EPOSIT IT
TS
cli
vic
small business services, retail vehicle finance, card acquiring, digital client value responsible
respo
e pons sibl lending
blle le
enddi g
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d Raise
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funding
f ndinng and
n a d + First SA bank to launch an open-banking – Delay in juristic onboarding
r
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ou
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propositions, asset management and wealth management practices
p actices ((eg
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eg moro gaggagges provide
pr
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net
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it cardds, vehicle
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fin
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inve
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Maintained employee motivation,
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:
I
tive, m
PR
V
nally excellent in all we do
a
+ R17,3bn paid in salaries and benefits
TI
» increasingly innovative and competitive; and + 75% staff engagement,
IM
AC
» strong in compliance and governance + Percentage salary increase for above the average industry
AR
arket-leading client expe
R PURPOSE
OU
USINESS
ASSET
A S unionised staff greater than level of 67%
Being operationally ex
• Reward structures linked to performance and value drivers As
Assets
As e s under
un
undee I S RAN
INSURANCE
RAN E AND A D
AN
R3,1bn
R
R3 ,1b
,1b
bnn
Y BUSINESS A
AND
A N WEALTH
ND WEALTH
WEA management
R PURPOSE
• R760m invested in employee training, including upskilling employees for mannag
na
n gem
em
me
ment
m
managemententt OTHER
OT TH R S
TH
THE SERVICES
SERVIC
R ICE
C S Digitisation and automation of
MANAGEMENT
MANNAG
N G MEN
GEM NT
Offer
O f r in
iins
insurance
suraance
a e benefits
benn fi
nefi
fits
s + A more transformed workforce (79% black the workforce environment:
digital transformation (2018: R468m)
▲ 11,
11,4%
14
1,4
4%
% Provide
Pro
ro
ov de solutions
so ution
s o
solutions
so
solution
s utio
o (eg
ons eg
g paaid
a
paidd and 62% female representation) + Altogether 620 employees
• Experienced and diverse executive team and a strong board to manage,
t ma
manag ge, (2
2018
8: R
(2018: 2 4bbn)
b
R2,4bn)
RY B
t R
to R331bn
331b
3
331
31 n protect
p otec
pro ct and
ec and
llife
e and
nddh home
m Staff attrition of 10,8% up from 10,1%, reskilled or redeployed
OU
• A transformed workforce insurance
nsu
sura
u nce ce cover)
e cover
o er)
e
grow
g row wealth
w wea
w alth although still below industry benchmark – 158 staffmembers
MA
of 11–13% retrenched
C
eratio
TI
RI
V
P
TI
I
celle
Manufactured R ES Manufactured
rienc
OU
p
+ Digital product sales up to 21% of total sales
ng o
• 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
S CTIIO
SA I AL
L TR
TRADING
RA NG
RA G services provider – no Nedbank
ed
Gro
101 000 point-of-sale devices (2018: 800, 4 462 and 96 000 respectively) Fac
Facilitate
a itate
tatt p
tate payme
payments
ym ts
yme s Provide
P rov
o de
e trading
ttr d ng
g and
a d
systems or client accounts
o
Uptime of application systems at 99,1%
es
wi
an
and
nd
n transactions
d transacti
ra
an
ns cti
tio
ons o a markets-
global
g markrk
kets
ke
• Market-leading digital products, services and client value propositions (marginally down on 2018) were compromised
m
ng
rrelated
ed solutions
a ed s u on ns
ns
Ma tco
ou
ou
rt
n
Social and relationship Social and relationship
ag
Trading
T
Traadin
dingg
ra
ic
22,9bn
22,9
22 9
9bn
9bn
om i ng
ns
• 7,8 million total clients (2018: 7,9 million) vallue
v
valuee att ri
is
sk
risk + The only large SA bank to increase Net + Responsible procurement
ac
on
ttransactions
a sac
s c io s
sa
sc
Promoter Score in 2019
t
• Embracing sustainable development financing to meet the SDGs as well
▲ 7,2%
7 2% practices (> 75% locally
ec
ar
io
proc
oce
c sse
ce se
ed
ed
processed
na
c
l- e + Growth in main-banked clients in the
se
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
pt
res
ef im
as ise + More than 3 300 YES recruits for 2019 clients in the entry-level
ter ce
c ar
eco
th a + and youth segments
gs R130m socioeconomic spend
nom
n th ic ou
ag in
e ma
Man + Maintained level 1 BBBEE contributor status
tcom
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
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
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
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 17You can also read
