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NED - Nedbank Group Limited - Credit rating affirmed by Fitch NEDBANK GROUP LIMITED (Incorporated in the Republic of South Africa) Registration number: 1966/010630/06 JSE share code: NED NSX share code: NBK ISIN: ZAE000004875 ("Nedbank Group") NEDBANK LIMITED (Incorporated in the Republic of South Africa) Registration number: 1951/000009/06 JSE share code: NBKP ISIN: ZAE000043667 NEDBANK GROUP - `BBB` CREDIT RATING AFFIRMED BY FITCH On Monday, 25 July 2011 Fitch Ratings released the following media statement. "Fitch Ratings has affirmed Nedbank Group Limited`s (Nedbank Group) and its 100%-owned subsidiary, Nedbank Limited`s (Nedbank) Long-term Issuer Default Ratings (IDR) at `BBB`. The full list of the ratings follows below. The ratings of Nedbank Group and Nedbank reflect the bank`s intrinsic strength through its well established and improving domestic franchise. The ratings also consider the impact of Nedbank Retail`s weak home loan asset quality on Nedbank Group`s financial performance. Nedbank Group`s Viability Rating is equalised with that of Nedbank in light of consolidated supervision by the South African Reserve Bank, low levels of double leverage and the fact that Nedbank contributes a significant portion of assets and earnings to the group. Management expects Nedbank Group`s 2011 earnings to improve on 2010 due to lower impairment charges and higher fee and commission income. A recent trading statement indicated that Nedbank Group`s H111 earnings would be more than 20% higher than H110. In 2010, Nedbank Group`s operating profit benefited from higher fee and commission income, lower impairment charges and asset repricing, partially offset by lower endowment earnings and cost growth. Retail lending, specifically home loans, account for most of Nedbank Group`s non-performing loans (NPLs). Although the recovery in Nedbank Group`s non-performing retail loans should continue in 2011, Fitch believes the bank`s NPL indicators could remain elevated whilst consumers are highly indebted and certain exposures are subject to debt review. Nedbank Group`s NPLs declined to 5.7% of gross loans at end- 2010 following write-offs, restructures and a slower inflow of retail NPLs. Credit growth is expected to remain muted in 2011. Liquidity risk within Nedbank Group is mitigated by a stable deposit base and surplus liquidity buffers. Fitch considers Nedbank Group`s core Tier 1 capital of 10.8% at end-Q111 to be acceptable given the current levels of core profitability and expected medium-term growth. Nedbank Group is South Africa`s fourth-largest banking group. Nedbank is the group`s primary operating subsidiary and comprises five core business clusters - Nedbank Capital, Nedbank Corporate, Nedbank Retail, Nedbank Business Banking, Nedbank Wealth and its wholly owned subsidiary, Imperial Bank Limited. The group is 52.2%-owned by Old Mutual Life Assurance Company (South Africa) Limited and its associate companies. The rating actions are as follows: Nedbank Group Limited: Long-term foreign currency IDR: affirmed at `BBB`; Outlook Stable Short-term foreign currency IDR: affirmed at `F2` Long-term local currency IDR: affirmed at `BBB`; Outlook Stable Viability Rating: affirmed at `bbb` Individual Rating: affirmed at `C` Support Rating: affirmed at `2` National Long-term Rating: affirmed at `AA-(zaf)`; Outlook Stable National Short-term Rating: affirmed at `F1+(zaf)` Nedbank Limited: Long-term foreign currency IDR: affirmed at `BBB`; Outlook Stable Short-term foreign currency IDR: affirmed at `F2` Long-term local currency IDR: affirmed at `BBB`; Outlook Stable Viability Rating: affirmed at `bbb` Individual Rating: affirmed at `C` Support Rating: affirmed at `2` National Long-term Rating: affirmed at `AA-(zaf)`; Outlook Stable National Short-term Rating: affirmed at `F1+(zaf)` Senior notes: affirmed at `BBB`/`F2` Subordinated notes: affirmed at `BBB-`" Sandton 26 July 2011 For further information please contact: Trevor Adams (Nedbank Group Managing Executive: Balance Sheet Management), tel: +27 (0)11 294 1141, email: trevoradams@nedbank.co.za Michael Davis (Nedbank Group Executive Head: Group Asset, Liability & Capital Management), tel: +27 (0)11 295 7282, email: michaeldav@nedbank.co.za Don Bowden (Tier 1 Investor Relations) tel: +27 (0)21 702 3102, email: don@tier1ir.co.za Sponsors to Nedbank Group in South Africa: Merrill Lynch South Africa (Pty) Limited Nedbank Capital Sponsor to Nedbank Group in Namibia: Old Mutual Investment Services (Namibia) (Pty) Ltd Sponsors to Nedbank Limited: Investec Bank Limited Nedbank Capital Date: 26/07/2011 09:17:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. 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