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OLD MUTUAL PLC - Nedbank Group Limited Audited Final Results 2014

Release Date: 23/02/2015 09:00
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Nedbank Group Limited Audited Final Results 2014

OLD MUTUAL PLC
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23 February 2015

NEDBANK GROUP LIMITED AUDITED FINAL RESULTS 2014

Nedbank Group Limited (“Nedbank Group”), the majority-owned South African banking subsidiary of 
Old Mutual plc, released its audited summarised financial results for the year ended 31 December 
2014 today, 23 February 2015.

The following is the full text of Nedbank Group's announcement:

"Audited summary consolidated financial results for the 12 months ended 31 December 2014

-   "Headline earnings increased 14,0% to R9 880m(1)
-   Diluted headline earnings per share up 13,0% to 2 066 cents(1)
-   Growth in tangible net asset value per share of 10,6%(1)
-   Return on equity (excluding goodwill) at 17,2%(1)
-   Common-equity tier 1 ratio: 11,6%
-   Full-year dividend per share up 14,9% to 1 028 cents

'Nedbank Group produced a strong set of results in 2014. Headline earnings
growth of 14% was driven by good net interest income growth and a lower
credit loss ratio – despite strengthened central provisions and increased
coverage levels.

We made a number of important changes during 2014 to position the group
for continued growth into the future. Our strong internal talent pipelines
enabled us to implement a successful succession process in a number of
executive roles. We also announced the creation of an integrated corporate
and investment bank to enable better client service and unlock additional
revenue growth opportunities. Our pan-African banking network strategy was
strengthened through the investment of R5,9bn to secure a shareholding of
approximately 20% in our longstanding alliance partner, Ecobank.

The group is resilient, with diversified income streams and strong balance
sheet metrics, and is well positioned to continue to grow despite economic
headwinds. Although forecast risk remains high, for the year ahead we again
expect organic growth in diluted headline earnings per share to be above
nominal GDP growth'.

Mike Brown
Chief Executive

Banking and economic environment

The operating environment in 2014 remained challenging for consumers, with
global markets reflecting a mixed performance, and the local economy
remained under pressure from strike action and electricity supply constraints.
SA's gross domestic product (GDP) is forecast to grow at 1,4% for 2014, but
in the absence of strike action, economic growth would have been 1% higher
according to the South African Reserve Bank (SARB).

Weak economic conditions, the twin deficits and SA's resultant dependency
on foreign capital inflows translated into rand depreciation and heightened
inflationary pressures in the early part of the year, prompting an increase of
75 basis points in interest rates. These domestic factors contributed to
Standard Poor's reaffirming SA's sovereign risk rating at BBB negative with the
outlook remaining stable (placing SA one notch above investment grade),
Fitch Ratings revising its outlook on its BBB rating to negative and Moody's
downgrading SA's debt rating to Baa2 with a stable outlook.

The SA banking industry was also tested by the collapse of African Bank
Limited ('Abil'), the country's largest unsecured lender. The combined strength
of the system ensured that Abil's resolution was successfully managed and
that the bank was placed under curatorship with no significant consequences
for the rest of the SA financial system.

Overall the credit environment remained muted, with wholesale credit demand
continuing to outpace retail demand as poor employment prospects, high
levels of indebtedness, increased interest rates and weak confidence levels
weighed against consumers. Wholesale credit demand was supported by
renewable-energy projects, corporate action and increased dealflow from the
rest of Africa. Wholesale activity is expected to moderate as corporates
remain hesitant to make long-term investments and increase production
capacity given the weak economic outlook.

Review of results

Nedbank Group produced strong headline earnings growth of 14,0% to
R9 880m (2013: R8 670m) for the year ended 31 December 2014. Growth
was driven by an increase in net interest income (NII), improvements in
impairments and growth in non-interest revenue (NIR), particularly in the
second half. Headline earnings included associate income from our
shareholding in Ecobank Transnational Incorporated (ETI) effective for the last
quarter of the year.(1)

Diluted headline earnings per share (DHEPS) increased 13,0% to 2 066 cents
(2013: 1 829 cents) and diluted earnings per share increased 12,5% to 2 049
cents (2013: 1 822 cents). Excluding associate income from ETI and the
related funding costs, the group's organic DHEPS increased 12,3%.(1)

Economic profit (EP) of R2 112m (2013: R2 114m) was achieved against a
higher cost of equity of 13,5% (2013: 13,0%). Return on average ordinary
shareholders' equity (ROE) increased to 15,8%(1) (2013: 15,6%)(1) and ROE
excluding goodwill was 17,2%(1) (2013: 17,2%)(1), supported by a higher return
on assets (ROA) of 1,27%(1) (2013: 1,23%).(1)

The group's balance sheet is well positioned. Our Basel III common-equity tier
1 (CET1) ratio of 11,6% (2013: 12,5%) after acquiring approximately 20% of
ETI is above the mid-point of our Basel III 2019 internal target range. Funding
and liquidity levels remained sound, with statutory liquid assets and cash
reserves increasing 18,5% to R82,6bn (2013: R69,7bn). The group met the 60%
minimum liquidity coverage ratio (LCR) requirement on 1 January 2015. The
LCR will be increased 10% annually to reach 100% on 1 January 2019.

Net asset value per share continued to increase, growing 9,5% to 14 395
cents (2013: 13 143 cents).(1)

Delivering sustainably to all our stakeholders

Nedbank Group is committed to long-term value creation for all our
stakeholders. In line with our vision to be Africa's most admired bank by staff,
clients, shareholders, regulators and communities, we are pleased to report
as follows in 2014:

For staff – creating 380 new employment opportunities and converting
606 temporary positions to permanent positions; providing exciting career
growth opportunities as we grew the franchise into the rest of Africa; investing
R489m in training and 1 538 staff attending our Leading for Deep Green
programme; supporting 125 external bursars across 18 universities; improving
staff transformation and continuing the positive shift in corporate culture;
embedding our top three culture values of accountability, client satisfaction
and brand reputation.

For clients – investing in exciting client-centred innovations such as Send-
iMali(TM) (mobile money send/cardless cash withdrawal capability) and Market
Edge(TM) (an analytics tool for merchants). Value-adding enhancements were
made to our App Suite (including instant payments) and to ApproveIT(TM)
(including secure card-not-present transactions and SIM swap detection). Our
progress in innovation was acknowledged with Nedbank's receiving the 2014
African Banker Award for Innovation. As regards our physical distribution
channels, we made banking more accessible, increasing new outlets by 22
and owned ATMs by 304, as well as converting, to date, 171 outlets to the
'branch of the future' format. We advanced R167bn (2013: R159bn) of new
loans to clients and assets under management grew 11,4% to R212bn (2013:
R190bn). For the sixth consecutive year Nedgroup Investments was placed
third overall in the Domestic Management Company category at the annual
Raging Bull Awards. All of these have resulted in group client numbers
increasing 7% to 7,1m since December 2013.

For shareholders – increasing the full year dividend 14,9% ahead of the 12,9%
growth in HEPS and generating a total shareholder's return (TSR) of 23,2%.
We acquired an initial 36,4% stake (with a pathway to control in 2016) of
Banco Único in Mozambique and a shareholding of approximately 20% in ETI.
Economic growth in the rest of Africa is faster than in SA and these
investments offer our shareholders access to earnings growth in these
markets while also providing the diversification benefits of having a presence
across 39 countries. For our SA broad-based black economic empowerment
(BBBEE) shareholders we have unlocked an estimated R8,2bn of value for
more than 500 000 beneficiaries since inception.

For regulators – full compliance with Basel III phase-in requirements,
including maintaining strong capital levels with a CET1 ratio of 11,6% and an
average long-term funding ratio of 25,4%; making cash taxation payments of
R8,0bn, relating to direct, indirect, pay as you earn (PAYE) and other taxation;
participating in the Abil resolution and underwriting; maintaining strong,
transparent relationships with all regulators; contributing to working groups on
new regulation and continuing to support responsible banking practices.

For communities – contributing R126m to socioeconomic development,
including R75m towards education. We also advanced R54bn in new loans to
retail clients, R1,2bn to affordable-housing developments across the country
and R113m to enterprise development. Our Fair Share 2030 pilot delivered
various successes, a highlight being a loan to a healthcare group that will
enable a projected cost-saving to our client from reduced energy consumption
of R1bn over 10 years. From an operational perspective we sourced 87% or
R8,5bn of our procurement locally. We continued our commitment to
managing our operational impact and maintained our carbon-neutral status,
and also attracted shareholder investment by remaining on the Dow Jones
Sustainability Index for the ninth consecutive year. We maintained our level-2
BBBEE contributor status for the sixth consecutive year. Together with Old
Mutual, we pledged a combined US$1m towards the African Union–Private
Sector Ebola Fund.

Delivering value to all our stakeholders assisted Nedbank in once again being
awarded SA Bank of the Year for 2014 by the Financial Times and the Banker
magazine, matching the achievements of 2011 and 2013.

Cluster financial performance

Our business clusters have developed competitive client value propositions
and strong market positioning as reflected in headline earnings growth of
19,3%¹ and an increased ROE of 19,7%(1) (2013: 18,7%)(1) against a higher
average total capital allocated at R51,4bn (2013: R45,5bn).

                                %       Headline           ROE
                           change       earnings        (%)(1)
                                         (Rm)(1)
                                      2014    2013   2014     2013
Nedbank Capital              23,3    2 128   1 726   30,9     29,4
Nedbank Corporate            15,8    2 599   2 245   24,5     26,4
Nedbank Business Banking     17,8    1 094     929   20,1     19,4
Nedbank Retail               15,7    2 937   2 539   13,3     11,6
Nedbank Wealth               15,8    1 042     900   36,8     36,2
Rest of Africa Division     106,4      357     173   10,1      8,7
Business clusters            19,3   10 157   8 512   19,7     18,7
Centre                     >(100)    (277)     158
Total                        14,0    9 880   8 670   15,8     15,6

Nedbank Capital grew headline earnings 23,3%, with this strong performance
driven by good NII growth and improvements in impairments. Lower NIR
growth reflects the high 2013 base in trading income related to renewable-
energy transactions. Preprovisioning operating profit growth was 12,0%.

Headline earnings growth of 15,8% in Nedbank Corporate was underpinned
by strong NII and NIR growth. The increase in NII was supported by
commercial mortgage and corporate lending activities and endowment
benefits. The growth in NIR was from core transactional income and private-
equity investments. Low levels of impairments continue to reflect good risk
management across the portfolio.

Nedbank Business Banking's strong increase of 17,8% in headline earnings
and improving ROE follow the normalisation of impairments from a large
single-client default in 2013 and solid NII growth from increased product
volumes and higher endowment earnings. Lower NIR reflects the impact of
maintaining transactional fees at 2013 levels as well as the proactive
reduction of transactional banking fees in alignment with market practices.
Preprovisioning operating profit was up 5,8%.

Headline earnings in Nedbank Retail grew 15,7% and benefited from an
improvement in impairments in personal loans and home loans. NIR was
influenced by the strategic decision to slow down personal loans and maintain
transactional fees at 2013 levels. Consequently, preprovisioning operating
profit decreased by 4,1%.

Nedbank Wealth's headline earnings growth of 15,8% was off a high 2013
base. This was largely due to record earnings growth in Wealth Management
and continued momentum in Asset Management, partially offset by relatively
slower growth from Insurance. The performance in Insurance resulted from
lower levels of sales of traditional insurance products, including homeowner's
cover and personal-loan-related insurance products.

The Rest of Africa Division, previously included in the Centre, reported
earnings of R357m (2013: R173m), showing strong growth, including
associate income from ETI as estimated by Nedbank on a prudent basis
effective from the fourth quarter, as ETI reports later than Nedbank. The
division also reported stronger performance from all five of our regional
subsidiaries.

Headline earnings at the Centre includes net endowment on surplus capital
and fair-value gains in the hedged portfolios, offset by additional portfolio
impairment provisions for ongoing economic uncertainties, with the central
portfolio provision increased by R150m to R350m.

Detailed segmental information is available in the results booklet and on the
group's website at nedbankgroup.co.za under the 'Financial information'
section.

Financial performance

Net interest income

NII grew 8,2%(1) to R22 961m(1) (2013: R21 220m)(1), benefiting from 9,7% growth
in average interest-earning banking assets.

The net interest margin (NIM) narrowed to 3,52% (2013: 3,57%). The
endowment income benefit from higher interest rates was offset by asset and
liability margin compression. Asset margins were impacted by the change in
asset mix as lower-yielding wholesale advances grew faster than higher-
yielding retail advances, including the reduction in our personal-loans book,
and by holding higher levels of lower-yielding high-quality liquid assets for
Basel III LCR requirements. Liability margin compression arose from higher
levels of competition for Basel III-friendly deposits.

Impairments charge on loans and advances

Impairments decreased 19,0% to R4 506m (2013: R5 565m) and the credit
loss ratio (CLR) declined to 0,79% (2013: 1,06%), despite increased coverage
levels and the strengthening of central provisions to R350m (2013: R200m) in
line with the group's view of a protracted weak economic environment.(1)

Credit loss ratio (%)            Dec            H2           H1            Dec
                             2014(1)          2014         2014        2013(1)
Specific impairments            0,72          0,67         0,78           0,97
Portfolio impairments           0,07          0,07         0,05           0,09
Total credit loss ratio         0,79          0,74         0,83           1,06

CLRs decreased across all clusters as a result of ongoing improvements in
asset quality, prudent credit granting and strong collections. Higher levels of
postwriteoff recoveries of R941m (2013: R888m) were recorded, including
personal-loan recoveries of R343m (2013: R276m).

Credit loss ratio (%)             %     Dec      H2      H1      Dec       Through-
                            banking 2014(1)    2014    2014  2013(1)      the-cycle
                           advances                                          target
                                                                             ranges
Nedbank Capital                12,8    0,14    0,32  (0,04)     0,51    0,10 – 0,55
Nedbank Corporate              33,1    0,21    0,21    0,22     0,23    0,20 – 0,35
Nedbank Business Banking       11,4    0,42    0,39    0,44     0,65    0,55 – 0,75
Nedbank Retail                 36,0    1,70    1,50    1,90     2,16    1,90 – 2,60
Nedbank Wealth                  4,2    0,17    0,13    0,21     0,28    0,20 – 0,40
Rest of Africa Division         2,6    0,23    0,06    0,42     0,37   
Group                                  0,79    0,74    0,83     1,06    0,80 – 1,20

Total group defaulted advances decreased by 11,2% to R15 846m
(2013: R17 848m), driven by continued improvements in the residential-
mortgage and personal-loans books. Total defaulted advances now
constitutes 2,5% of the book (2013: 3,0%).

Coverage ratios for total and specific impairments strengthened to 70,0%
(2013: 64,2%) and 43,1% (2013: 42,3%) respectively. Portfolio coverage
improved to 0,70% (2013: 0,68%).

Non-interest revenue
During the year a number of strategic actions were implemented to position
the group for growth into the future. These actions included the slowdown in
growth of personal loans, reducing the pricing of our credit life product (but
with increased benefits), maintaining transactional fees at 2013 levels, and
implementing selected fee reductions in Retail Relationship Banking and
Business Banking.

As a result NIR increased by 4,9%(1) to R20 312m(1) (2013: R19 361m)(1), with
strong growth of 10,2% in the second half of the year.

The underlying drivers of NIR growth included:

-   Commission and fee income increasing 3,9%(1) to R14 570m(1)
    (2013: R14 023m)(1), driven by good transactional-banking volume growth
    and ongoing client acquisition, notwithstanding the effect of no fee
    increases and fee reductions amounting to R355m.
-   Insurance income growing 3,1%(1) to R1 986m(1) (2013: R1 927m)(1), which
    was achieved mainly in the second half of the year, through a better claims
    experience and continued momentum in non-traditional insurance, offset
    by retail volumes.
-   Trading income growing 3,3%(1) to R2 648m(1) (2013: R2 564m)(1) off a high
    2013 base.
-   Private-equity income increasing 88,0%(1) to R423m(1) (2013: R225m)(1)
    following higher profits realised on listed investments of R434m (2013:
    R192m).
-   Fair-value gains of R35m(1) (2013: R40m)(1), which were recognised primarily
    as a result of basis risk on centrally hedged banking book positions and
    accounting mismatches in the hedged fixed-rate advances portfolios.

Expenses

Expenses growth of 9,4%(1) to R24 534m(1) (2013: R22 419m)(1) is reflective of
continued investment in the group's franchises.

The main contributors were:

-   staff-related costs increasing 9,6%, comprising growth in remuneration of
    8,8% and an increase in variable incentives;
-   computer processing costs growing 13,9% to R3 097m, including
    amortisation costs of R654m, up 12,0%.
-   fees and insurance costs increasing 10,7% in line with higher volumes of
    revenue-generating activities such as cash handling, card issuing and
    acquiring, and client acquisition costs in Nedbank Wealth.

Associate income

Associate income increased to R161m (2013: R27m), largely driven by the
estimated income from our shareholding of approximately 20% in ETI,
effective from 1 October 2014.(1) The group's results includes Nedbank's own
conservative estimate of ETI's earnings, as the publication dates of ETI
results are not aligned to Nedbank Group.

Statement of financial position

Capital

The group remains well capitalised, with all capital adequacy ratios well above
the Basel III minimum regulatory capital requirements and within the group's
Basel III internal target ranges.

Basel III(1)      Dec      Jun     Dec    Internal target  Regulatory
                 2014     2014    2013         range         minimum*
CET1 ratio      11,6%    12,1%   12,5%     10,5% – 12,5%         5,5%
Tier 1 ratio    12,5%    13,1%   13,6%     11,5% – 13,0%         7,0%
Total           14,6%    15,0%   15,7%     14,0% – 15,0%        10,0%
capital
ratio

(Ratios calculated include unappropriated profits.)

(1) The Basel III regulatory requirements (excluding unappropriated profits) are being phased in
    between 2013 and 2019 and exclude the Pillar 2b add-on.

Our CET1 ratio of 11,6% (2013: 12,5%) is above the mid-point of our Basel III
2019 internal target range. The decrease in the ratio since June 2014 is
largely as a result of the expected 0,9% capital impact from our investments in
ETI and Banco Único.

The tier 1 and total capital ratios reflect the progressive grandfathering of old-
style instruments in accordance with Basel III transitional arrangements.
Because of this only 80% of Nedbank's preference shares and hybrid debt
qualified as tier 1 capital in 2014. In addition, NED 8, a R1,7bn old-style tier 2
subordinated-debt instrument, was called in February 2014 and replaced with
R2,5bn of new-style Basel III-complaint tier 2 instruments.

Further details on risk and capital management will be available in the 'Risk
and Balance Sheet Management review' section of the group's analyst booklet
and the Pillar 3 Report to be published on the website at nedbankgroup.co.za
in March 2015.

Funding and liquidity

The group's balance sheet remains well funded, with deposits increasing
8,4%(1) to R653,5bn(1) (2013: R603,0bn)(1) and the loan-to-deposit ratio
strengthening to 93,8%(1) (2013: 96,1%).(1)

Our strategy of growing retail and commercial deposits and maintaining a
conservative term funding profile continues to be reflected in the group's
average long-term funding ratio for the fourth quarter of 25,4% (average fourth
quarter 2013: 26,2%), which has tended to be above the industry average.

The group maintained a sound liquidity position, with contingent liquidity well
in excess of prudential liquidity requirements. The statutory liquid assets and
cash reserves, combined with the surplus liquid-asset portfolio of R37,0bn
(2013: R28,0bn), increased 18,5% to R82,6bn (2013: R69,7bn).

Liquidity coverage ratio

SARB adopted the Basel Committee's LCR phase-in arrangements where,
from 1 January 2015, SA banks must meet the minimum regulatory
requirement of 60%, which increases by 10% annually to reach 100% on
1 January 2019.

Nedbank has met the minimum LCR requirement of 60%, and implemented
an appropriately conservative buffer. The group is well positioned to meet the
ongoing LCR requirements throughout the transitional period.

Loans and advances

Loans and advances grew 5,8%(1) to R613,0bn(1) (2013: R579,4bn)(1). Excluding
low-yielding trading advances, banking advances growth was 8,1%,
underpinned by gross new payouts of R166,8bn (2013: R158,9bn).

Loans and advances by cluster are as follows:

Rm                         % change   2014(1)   2013(1)   
Nedbank Capital               (3,6)   105 601   109 549   
Banking activities              9,1    78 596    72 066   
Trading activities           (28,0)    27 005    37 483   
Nedbank Corporate              13,9   199 557   175 274   
Nedbank Business Banking        4,8    65 819    62 785   
Nedbank Retail                  3,9   203 063   195 435   
Nedbank Wealth                 12,4    24 819    22 082   
Rest of Africa Division       (4,3)    14 073    14 700   
Centre                         >100        89     (453)   
                                5,8   613 021   579 372   

Banking advances growth was primarily driven by strong growth from
Nedbank Capital and Nedbank Corporate, which together contribute 47,5% of
total banking advances and 49,7% of the year-on-year growth.

Nedbank Retail's slower advances growth reflects the 16,3% decrease in
personal loans, which largely offset stronger growth in Card and MFC (vehicle
finance) of 17,1% and 12,1% respectively.

Advances growth decreasing in the Rest of Africa Division resulted from
growth in the regional subsidiaries of 17,2% more than offset by the
repayment of the ETI loan of US$285m.

Total assets administered by the group has surpassed the R1,0tn level for the
first time, having increased 8,7% for the year (2013: R939,9m). Assets under
management increased 11,4% to R212m (2013: R190,3m) following good
market performance.(1)

Group strategic focus

We made good progress with our five key strategic focus areas, namely:

-   Client-centred innovation: We continue to introduce innovative products
    such as Send-iMali™, the MyFinancialLife™ retirement calculator, our
    Greenbacks Rewards Programme SHOP Card and, for wholesale clients,
    our worldclass Plug and Transact™ token and Market Edge, a merchant
    analytics tool. Altogether 171 outlets in the 'branch of the future' format
    have been converted to date and we currently plan to have converted
    75% of all outlets by 2017. Digital channels remain important and digitally
    enabled clients increased by 48% while the value of Nedbank App Suite
    transactions increased 66% to R58bn. Our ability to launch additional
    functionality without clients having to reinstall the Nedbank AppSuite™
    once again contributed to Nedbank being a finalist for the MTN Best
    Android Consumer App award in 2014. Our progress in innovative banking
    solutions was further acknowledged by our receiving the 2014 African
    Banker Award for Innovation. The implementation of our new transactional
    switch in 2014 will enhance our electronic transactional capabilities into the
    future.

-   Growing our transactional banking franchise: The strategic decision
    taken to build our franchise and client relationships through maintaining
    our transactional fees at 2013 levels, and reducing selected fees in some
    businesses, has seen early successes as client attrition metrics improved,
    cross-sell increased and client gains continued in both total and main
    banked categories. Our brand value increased 15% to R12,6bn in 2014 as
    reported by Brand Finance SA's Top 50 Most Valuable Brands Survey and
    Nedbank was rated the third-most-valuable bank brand in SA.

-   Optimise and invest: Across Nedbank Group we have initiated various
    cost and efficiency optimisation initiatives. Through our 'rationalise,
    standardise and simplify' information technology strategy we are
    decreasing our core systems from 250 to 60, 18 of which have been
    decommissioned in 2014 and 74 to date. On 1 January 2015 we went live
    successfully with our SAP enterprise resource planning (ERP)
    replacement system for finance and procurement – on time, on budget and
    within scope – with human resources to follow later in the year. In addition,
    we are working on a range of alliances and synergies with the Old Mutual
    Group in SA and have made substantial progress towards the 2017 Old
    Mutual Group target of R1bn for collaborative initiatives. We currently
    expect that less than 30% of this will accrue to Nedbank.

-   Strategic portfolio tilt: The benefits from the early action taken in
    reducing our home loan and personal-loan portfolios have been evident in
    our 2014 results. Our focus on growing activities that generate economic
    profit, such as transactional deposits, transactional banking and
    investment in the rest of Africa, remains high on the agenda. The benefit of
    our actions over the past four years has enabled the group to maintain a
    sound balance sheet and reduce impairments, while delivering dividend
    growth ahead of HEPS growth.

-   Pan-African banking network: During the period we concluded the
    acquisition of an initial 36,4% shareholding (with a pathway to control in
    2016) of Banco Único in Mozambique. In our Rest of Africa subsidiaries
    we have made good progress in implementing a standardised operating
    model and our Flexcube information technology system is planned to be
    implemented in Namibia in 2015. This has strengthened Nedbank's
    franchise and client proposition in the Southern African Development
    Community (SADC) and East Africa.
 
    In West and Central Africa our alliance with ETI continues to deliver value
    for the group. During October 2014 we exercised our rights to subscribe
    for a 20% shareholding in ETI for a consideration of US$493,4m. Our
    alliance with Bank of China has progressed and since inception we have
    concluded a number of deals together. Additional disclosure of our
    progress in the rest of Africa is contained in the segmental commentary of
    the results booklet.

Value created through broad-based black economic empowerment

Nedbank Group's South African broad-based black economic empowerment
('BBBEE') transaction introduced in 2005 included over 500 000 direct and
indirect beneficiaries ('the BBBEE transaction'). The BBBEE transaction was aligned
and implemented in collaboration with Old Mutual Group's BBBEE transaction.
The BBBEE transaction facilitated broad-based black ownership equating to 11,5%
of the then value of Nedbank Group's SA businesses. The objective was to
create sustainable value for a broad base of diverse beneficiaries, including
strategic black business partners, employees, non-executive directors, clients
and community interest groups affiliated with the company.

The group's strong financial performance over the ensuing nine-year period
has benefitted its BBBEE stakeholders by an estimated R8,2bn, based on
current market prices. Valuing this benefit at the time that shares became
unrestricted, during the lifetime of the BBBEE schemes, the aggregate value
created for the BBBEE stakeholders would be R5,5bn.

Further information on the specific repurchase and issue relating to the
BBBEE transaction will be included in the JSE SENS announcement

published on 23 February 2015, which will also be available on the group's
website at nedbankgroup.co.za.

Economic outlook

The SA economy is forecast to improve modestly off a low base, although
growth will be constrained by disruptions to power supply and weaker growth
anticipated in key export markets, particularly in the Eurozone and China.

Growth in GDP is currently forecast at 2,5% for 2015 as the economy
recovers from the effects of strike action and exports are boosted by a weaker
rand. Risk to this appears to be on the downside. The sharp drop in global fuel
prices has improved the inflation outlook, and interest rates are expected to
remain unchanged at current levels until late in the year. The softer interest
rate outlook and lower borrowing costs should support consumer credit
demand and limit credit defaults in 2015, notwithstanding the weak job market
and still high consumer debt levels.

Retail banking conditions are therefore likely to improve modestly, but growth
in wholesale banking may moderate from current levels as fixed-investment
plans and credit demand will be limited by the severity and extent of
infrastructure constraints, rising production costs, soft global demand and low
international commodity prices.

Prospects

Our guidance on financial performance for the full 2015 year is as follows:

-   Advances to grow at mid-single digits.
-   NIM to be below the 2014 level of 3,52%.
-   CLR to be at the lower end of the through-the-cycle target range of 80 to
    120 basis points.
-   NIR (excluding fair-value adjustments) to grow above mid-single digits.
-   Expenses to increase above mid-single digits.

Although forecast risk remains high, for the year ahead we once again expect
organic growth in DHEPS to be above nominal GDP growth.

Our medium-to-long-term targets and performance outlook for 2015 for these
are as follows:

                       2014          Medium-to-long-term         2015 full-year
Metric
                performance                targets                  outlook
                                      
ROE (excluding                          5% above cost of
goodwill)             17,2%         ordinary shareholders'        Below target
                                           equity                                            

Growth in
                      13,0%            = consumer price
DHEPS                                                          > consumer price
                                     index + GDP growth +
Growth in                                                     index + GDP growth
                      12,3%                   5%
organic DHEPS
                                      Between 0,8% and
                                                             At lower end of target
CLR                   0,79%            1,2% of average
                                                                    range
                                      banking advances
NIR-to-expense
                      82,8%                  >85%                 Below target
ratio
Efficiency ratio(1)   56,5%           50,0% to 53,0%(2)           Above target
CET1 capital
adequacy ratio        11,6%            10,5% to 12,5%          Within target range
(Basel III)
                      Internal Capital Adequacy Assessment Process (ICAAP):
Economic capital
                              A debt rating (including 10% capital buffer)
Dividend cover       2,07 times       1,75 to 2,25 times       1,75 to 2,25 times

(1) Includes associate income in line with industry accounting practices.
(2) Target will be reviewed for the impact of inclusion of associate income

Shareholders are advised that these forecasts are based on our latest
macroeconomic outlook, and have not been reviewed or reported on by the
group's auditors.

Board appointments

During the period David Adomakoh, Mantsika Matooane and Brian Dames
were appointed as independent non-executive directors with effect from
21 February, 15 May and 30 June 2014 respectively.

Paul Hanratty, Chief Operating Officer (COO) of Old Mutual plc was appointed
as non-independent non-executive director with effect from 8 August 2014.

Mfundo Nkuhlu, previously Managing Executive of Nedbank Corporate,
succeeded Graham Dempster as COO and joined the board as executive
director with effect from 1 January 2015. In his new role Mfundo has overall
responsibility for the Rest of Africa Division, Balance Sheet Management,
Information Technology, Human Resources, Marketing, Communications and
Corporate Affairs, and Strategic Planning. Graham will continue to focus on
strategic initiatives in the Rest of Africa until his retirement on 31 May 2015.

Dr Reuel Khoza, the current Chairman, reached his nine-year term in August
2014 and in line with Nedbank Group policy retires at the close of the annual
general meeting (AGM) on 11 May 2015. Vassi Naidoo will be appointed non-
executive director of the companies with effect from 1 May 2015. The boards
of Nedbank Group and Nedbank have resolved to elect Vassi as Chairman of
the companies immediately following the conclusion of the Nedbank Group
AGM scheduled to be held on 11 May 2015.

Group executive appointments

The group announced a number of executive appointments during the year.
All the appointments were internal and are evident of our well-thought-out
succession planning processes and the depth of our talent pipelines.

Philip Wessels was appointed Managing Executive of Retail and Business
Banking, following the appointment of Ingrid Johnson as Financial Director of
our parent, Old Mutual plc. Trevor Adams succeeded Philip as Chief Risk
Officer with effect from 1 August 2014 and Mike Davis joined the Group
Executive Committee as Group Executive of Balance Sheet Management with
effect from 1 January 2015 to fill Trevor's previous role.

Following the announcement in November 2014 that Nedbank Capital and
Nedbank Corporate will be integrated into a single client-facing, wholesale
business cluster, Brian Kennedy, Managing Executive of Nedbank Capital, will
be accountable for the combined corporate and investment bank, including
the implementation of the business structure and operating model with effect
from 1 January 2015. This newly formed cluster will offer the full spectrum of
wholesale products under one brand and one leadership team. Our objective
is to create a wholesale business that combines the strengths of Nedbank
Capital and Nedbank Corporate to build a market-leading franchise with an
even stronger client-centred focus.

Priya Naidoo joined the Group Executive Committee on 1 January 2015 and
will succeed John Bestbier, Group Executive for Strategic Planning and
Economics, on his scheduled retirement date of 30 June 2015.

Accounting policies(1)

Nedbank Group Limited is a company domiciled in SA. The summary
consolidated financial results of the group at and for the year ended
31 December 2014 comprise the company and its subsidiaries (the 'group')
and the group's interests in associates and joint arrangements.

The financial results contained in the SENS announcement has been
extracted from the consolidated financial statements, which have been
prepared in accordance with the requirements of the JSE Limited Listings
Requirements for preliminary reports, and the requirements of the Companies
Act applicable to summary financial statements. The Listings Requirements
require preliminary reports to be prepared in accordance with the framework
concepts and the measurement and recognition requirements of International
Financial Reporting Standards (IFRS), Financial Reporting Guides as issued
by the Accounting Practices Committee and Financial Pronouncement as
issued by the Financial Reporting Standards Council and also, as a minimum,
to contain the information required by IAS 34: Interim Financial Reporting. The
accounting policies applied in the preparation of the consolidated financial
statements, from which the summary consolidated financial results were
derived, are in terms of IFRS and are consistent with the accounting policies
applied in the preparation of the previous consolidated annual financial results.

The summary consolidated financial results have been prepared under the
supervision of Raisibe Morathi, the Chief Financial Officer.

Events after the reporting period(1)

The various BBBEE schemes that reached their maturity dates on
1 January 2015 will be rationalised through a specific repurchase of Nedbank
Group shares. The repurchased shares will not have a significant impact on
the consolidated financial position of the group and will be delisted, cancelled
and reinstated as authorised but unissued shares. Following this, the
Community Trust, which matures only in 2030, will subscribe for Nedbank
Group shares to maintain its shareholding in the group.

On 15 January 2015 Nedbank Limited's unsecured subordinated NEDH1A
and NEDH1B notes were redeemed and R225m of new-style tier 2 debt
instruments issued. A further R5,4bn of senior unsecured debt was issued on
12 February 2015.

At 31 December the carrying value of our long-term strategic investment in
ETI was R6,2bn. Based on the ETI share price at year-end the market value
was R5,5bn. We assessed the indicators of impairment as at 31 December
2014 in terms of International accounting Standard (IAS) 39 and, inter alia,
took into consideration ETI shares trade in low volume, the price is therefore
subject to volatility and does not reflect the underlying financial and strategic
value of the investment to the Nedbank Group. Therefore we did not impair
the carrying value of our investment at 31 December 2014. Subsequent to the
year-end on 19 February 2015 the market value of ETI based on the share
price, was R4,4bn. We will continue to assess the indicators of impairment in
future reporting periods

Audited summary consolidated financial results – independent auditors' report

KPMG Inc and Deloitte & Touche, Nedbank Group's independent auditors,
have audited the consolidated financial results of Nedbank Group Limited
from which the summary consolidated financial results have been derived,
and have expressed an unmodified audit opinion on the financial statements.
These summary consolidated financial results comprise the summary
consolidated statement of financial position at 31 December 2014, summary
consolidated statement of comprehensive income, summary consolidated
statement of changes in equity and summary consolidated statement of
cashflows for the year then ended and selected explanatory notes. The
related notes are marked with(1). Both audit reports are available for inspection
at Nedbank Group's registered office.

The auditors' report does not necessarily report on all of the information
contained in the financial results. Shareholders are therefore advised that in
order to obtain a full understanding of the nature of the auditors' engagement,
they should obtain a copy of the auditors' report together with the
accompanying financial information from Nedbank Group's registered office.
The directors take full responsibility for the preparation of the summarised
consolidated financial results and that the financial information has been
correctly extracted from the underlying audited consolidated financial results.

Forward-looking statements

This announcement contains certain forward-looking statements with respect
to the financial condition and results of operations of Nedbank Group and its
group companies that, by their nature, involve risk and uncertainty because
they relate to events and depend on circumstances that may or may not occur
in the future. Factors that could cause actual results to differ materially from
those in the forward-looking statements include global, national and regional
economic conditions; levels of securities markets; interest rates; credit or
other risks of lending and investment activities; as well as competitive and
regulatory factors. By consequence, all forward-looking statements have not
been reviewed, audited or reported on by the group's auditors.

Final-dividend declaration

Notice is hereby given that a gross final dividend of 568 cents per ordinary
share has been declared, payable to shareholders for the year ended
31 December 2014. The dividend has been declared out of income reserves.

The dividend will be subject to a dividend withholding tax rate of 15%
(applicable in SA) or 85,20000 cents per ordinary share, resulting in a net
dividend of 482,80000 cents per ordinary share, unless the shareholder is
exempt from paying dividend tax or is entitled to a reduced rate in terms of an
applicable double-tax agreement.

Nedbank Group Limited's tax reference number is 9375/082/71/7 and the
number of ordinary shares in issue at the date of declaration is 499 257 807.

In accordance with the provisions of Strate, the electronic settlement and
custody system used by JSE Limited, the relevant dates for the dividend are
as follows:

Event                                                             Date
Last day to trade (cum dividend)               Thursday, 26 March 2015
Shares commence trading (ex dividend)            Friday, 27 March 2015
Record date (date shareholders recorded in      Thursday, 2 April 2015
books)
Payment date                                     Tuesday, 7 April 2015

Share certificates may not be dematerialised or rematerialised between
Friday, 27 March 2015, and Thursday, 2 April 2015, both days inclusive.

On Tuesday, 7 April 2015, the dividend will be electronically transferred to the
bank accounts of shareholders. Holders of dematerialised shares will have
their accounts credited at their participant or broker on Tuesday, 7 April 2015.

For and on behalf of the board

Reuel Khoza                                 Mike Brown
Chairman                               Chief Executive

23 February 2015

AUDITED SUMMARY CONSOLIDATED FINANCIAL RESULTS
for the year ended 31 December 2014

Financial highlights                                                                                                            
at                                                                                               31 December   31 December   
                                                                           Change                       2014          2013   
                                                                        (Audited)                  (Audited)     (Audited)   
                                                                                %                                            
Statistics                                                                                                                   
Number of shares listed                                                     (2.2)            m         499.3         510.3   
Number of shares in issue, excluding shares held by group entities            1.0            m         465.6         461.2   
Weighted-average number of shares                                             0.9            m         464.4         460.2   
Diluted weighted-average number of shares                                     0.9            m         478.2         474.1   
Preprovisioning operating profit                                              3.5           Rm        17 873        17 268   
Economic profit(1)                                                          (0.1)           Rm         2 112         2 114   
Headline earnings per share                                                  12.9        cents         2 127         1 884   
Diluted headline earnings per share                                          13.0        cents         2 066         1 829   
Ordinary dividends declared per share                                        14.9        cents         1 028           895   
Interim                                                                      17.9        cents           460           390   
Final                                                                        12.5        cents           568           505   
Ordinary dividends paid per share                                            20.3        cents           965           802   
Dividend cover                                                                           times          2.07          2.11   
Net asset value per share                                                     9.5        cents        14 395        13 143   
Tangible net asset value per share                                           10.6        cents        12 553        11 346   
Closing share price                                                          18.6        cents        24 900        21 000   
Price/earnings ratio                                                                historical          11.7          11.1   
Market capitalisation                                                        16.0          Rbn         124.3         107.2   
Number of employees                                                           3.3                     30 499        29 513   
Key ratios (%)                                                                                                               
Return on ordinary shareholders' equity (ROE)                                                           15.8          15.6   
ROE, excluding goodwill                                                                                 17.2          17.2   
Tangible ROE                                                                                            18.2          18.3   
Return on total assets (ROA)                                                                            1.27          1.23   
Net interest income to average interest-earning banking assets                                          3.52          3.57   
Credit loss ratio – banking advances                                                                    0.79          1.06   
Gross operating income growth rate less expense growth rate (Jaws ratio)                               (2.5)           0.7   
Non-interest revenue to total operating expenses                                                        82.8          86.4   
Non-interest revenue to total income                                                                    46.9          47.7   
Efficiency ratio                                                                                        56.5          55.2   
Effective taxation rate                                                                                 25.3          25.2   
Return on risk-weighted assets(1)                                                                       2.24          2.21   
Group capital adequacy ratios (including unappropriated profits):(1)                                                           
- Common-equity tier 1                                                                                  11.6          12.5   
- Tier 1                                                                                                12.5          13.6   
- Total                                                                                                 14.6          15.7   
Statement of financial position statistics (Rm)                                                                              
Total equity attributable to equity holders of the parent                    10.6                     67 024        60 617   
Total equity                                                                 10.2                     70 911        64 336   
Amounts owed to depositors                                                    8.4                    653 450       602 952   
Loans and advances                                                            5.8                    613 021       579 372   
Gross                                                                         5.6                    624 116       590 828   
Impairment of loans and advances                                            (3.2)                   (11 095)      (11 456)   
Total assets administered by the group                                        8.7                  1 021 326       939 935   
Total assets                                                                  8.0                    809 313       749 594   
Assets under management                                                      11.4                    212 013       190 341   
Life assurance embedded value                                                12.0                      2 393         2 137   
Life assurance value of new business                                       (27.0)                        257           352   
Foreign currency conversion rates                                                                                            
Pound sterling at the end of the year                                         3.9            R         18.04         17.36   
Pound sterling average rate for the year                                     17.9            R         17.88         15.17   
US dollar at the end of the year                                             10.3            R         11.58         10.50   
US dollar average rate for the year                                          11.8            R         10.87          9.72   

(1) These ratios have not been audited by the group's auditors.

Summarised consolidated statement of comprehensive income
for the year ended                                                                                       31 December   31 December   
                                                                                                Change          2014          2013   
                                                                                             (Audited)     (Audited)     (Audited)   
                                                                                                     %            Rm            Rm   
Interest and similar income                                                                       14.2        52 619        46 087   
Interest expense and similar charges                                                              19.3        29 658        24 867   
Net interest income                                                                                8.2        22 961        21 220   
Impairments charge on loans and advances                                                        (19.0)         4 506         5 565   
Income from lending activities                                                                    17.9        18 455        15 655   
Non-interest revenue                                                                               4.9        20 312        19 361   
Operating income                                                                                  10.7        38 767        35 016   
Total operating expenses                                                                           9.4        24 534        22 419   
Indirect taxation                                                                                  5.7           635           601   
Profit from operations before non-trading and capital items                                       13.4        13 598        11 996   
Non-trading and capital items                                                                     94.6         (109)          (56)   
Net (loss)/profit on sale of subsidiaries, investments, and property and equipment               <-100          (12)            11   
Net impairment of investments, property and equipment, and capitalised development costs          44.8          (97)          (67)   
Fair-value adjustments of investment properties                                                      -             6             6   
Profit from operations                                                                            13.0        13 495        11 946   
Share of profits of associate companies and joint arrangements                                    >100           161            27   
Profit before direct taxation                                                                     14.1        13 656        11 973   
Total direct taxation                                                                             15.0         3 468         3 016   
Direct taxation                                                                                   15.0         3 487         3 033   
Taxation on non-trading and capital items                                                          5.6          (19)          (18)   
Taxation on revaluation of investment properties                                               (100.0)                           1   
Profit for the year                                                                               13.7        10 188         8 957   
Other comprehensive income net of taxation                                                      (61.4)           647         1 675   
Items that may be reclassified subsequently to profit or loss                                                                        
– Exchange differences on translating foreign operations                                        (43.5)           390           690   
– Fair-value adjustments on available-for-sale assets                                           (34.4)            21            32   
Items that may not be reclassified subsequently to profit or loss                                                                    
– Gains on property revaluations                                                                 (9.0)           202           222   
– Remeasurements on long-term employee benefit assets                                           (95.3)            34           731   
Total comprehensive income for the year                                                            1.9        10 835        10 632   
Profit attributable to:                                                                                                              
- Equity holders of the parent                                                                    13.4         9 796         8 637   
- Non-controlling interest – ordinary shareholders                                                >100            69            28   
- Non-controlling interest – preference shareholders                                              10.6           323           292   
Profit for the year                                                                               13.7        10 188         8 957   
Total comprehensive income attributable to:                                                                                          
- Equity holders of the parent                                                                     1.3        10 431        10 295   
- Non-controlling interest – ordinary shareholders                                                80.0            81            45   
- Non-controlling interest – preference shareholders                                              10.6           323           292   
Total comprehensive income for the year                                                            1.9        10 835        10 632   
Basic earnings per share (cents)                                                                  12.4         2 109         1 877   
Diluted earnings per share (cents)                                                                12.5         2 049         1 822   

Headline earnings reconciliation
for the year ended
                                                                                                   31 December       31 December    31 December       31 December
                                                                                           Change         2014              2014           2013              2013
                                                                                        (Audited)    (Audited)         (Audited)      (Audited)         (Audited)
                                                                                                %           Rm                Rm             Rm                Rm
                                                                                                         Gross   Net of taxation          Gross   Net of taxation
Profit attributable to equity holders of the parent                                          13.4                          9 796                            8 637
Less: Non-headline earnings items                                                                        (103)              (84)           (50)              (33)
Net (loss)/profit on sale of subsidiaries, investments, and property and equipment                        (12)                 7             11                11
Net impairment of investments, property and equipment, and capitalised development costs                  (97)              (97)           (67)              (49)
Fair-value adjustments of investment properties                                                              6                 6              6                 5

Headline earnings                                                                            14.0                          9 880                            8 670

Summarised consolidated statement of financial position
at                                                                                                  31 December     31 December   
                                                                                         Change            2014            2013   
                                                                                      (Audited)       (Audited)       (Audited)
                                                                                              %              Rm              Rm 
Assets                                                                                                                            
Cash and cash equivalents                                                                (36.0)          13 339          20 842   
Other short-term securities                                                                58.4          67 234          42 451   
Derivative financial instruments                                                           16.3          15 573          13 390   
Government and other securities                                                          (15.3)          27 177          32 091   
Loans and advances                                                                          5.8         613 021         579 372   
Other assets                                                                                0.5           8 715           8 673   
Current taxation assets                                                                  (48.5)             291             565   
Investment securities                                                                       3.5          20 029          19 348   
Non-current assets held for sale                                                           33.3              16              12   
Investments in private-equity associates, associate companies and joint arrangements       >100           7 670           1 101   
Deferred taxation assets                                                                   43.1             309             216   
Investment property                                                                      (39.3)             130             214   
Property and equipment                                                                     14.0           7 773           6 818   
Long-term employee benefit assets                                                          52.6           4 546           2 980   
Mandatory reserve deposits with central banks                                              12.7          14 911          13 231   
Intangible assets                                                                           3.5           8 579           8 290   
Total assets                                                                                8.0         809 313         749 594   
Equity and liabilities                                                                                                            
Ordinary share capital                                                                      1.1             466             461   
Ordinary share premium                                                                      2.7          16 781          16 343   
Reserves                                                                                   13.6          49 777          43 813   
Total equity attributable to equity holders of the parent                                  10.6          67 024          60 617   
Non-controlling interest attributable to:                                                                                         
– Ordinary shareholders                                                                    32.5             326             246   
– Preference shareholders                                                                   2.5           3 561           3 473   
Total equity                                                                               10.2          70 911          64 336   
Derivative financial instruments                                                          (6.7)          15 472          16 580   
Amounts owed to depositors                                                                  8.4         653 450         602 952   
Provisions and other liabilities                                                          (6.1)          13 788          14 682   
Current taxation liabilities                                                             (55.5)             134             301   
Deferred taxation liabilities                                                              18.0             931             789   
Long-term employee benefit liabilities                                                     66.7           3 071           1 842   
Investment contract liabilities                                                             1.9          11 747          11 523   
Insurance contract liabilities                                                             25.6           4 171           3 321   
Long-term debt instruments                                                                  7.1          35 638          33 268   
Total liabilities                                                                           7.8         738 402         685 258   
Total equity and liabilities                                                                8.0         809 313         749 594   

Summarised consolidated statement of changes in equity

                                                                                        Non-controlling     Non-controlling                     
                                                                       Total equity            interest            interest                     
                                                                    attributable to     attributable to     attributable to                     
                                                                     equity holders            ordinary          preference                     
                                                                      of the parent        shareholders        shareholders      Total equity 
                                                                                 Rm                  Rm                  Rm                Rm   
Audited balance at 31 December 2012                                          53 601                 213               3 561            57 375   
Dividend to shareholders                                                    (3 821)                 (9)                               (3 830)   
Preference share dividend                                                                                             (292)             (292)   
Issues of shares net of expenses                                                475                                                       475   
Shares (acquired)/no longer held by group entities and BEE trusts             (132)                                                     (132)   
Total comprehensive income for the year                                      10 295                  45                 292            10 632   
Share-based payment reserve movement                                            206                                                       206   
Preference shares held by group entities                                                                               (88)              (88)   
Disposal of subsidiary                                                                              (3)                                   (3)   
Regulatory risk reserve provision                                               (4)                                                       (4)   
Other movements                                                                 (3)                                                       (3)   
Audited balance at 31 December 2013                                          60 617                 246               3 473            64 336   
Dividend to shareholders                                                    (4 643)                 (9)                               (4 652)   
Preference share dividend                                                                                             (323)             (323)   
Issues of shares net of expenses                                                771                                                       771   
Shares delisted in terms of BEE transaction                                 (1 613)                                                   (1 613)   
Shares (acquired)/no longer held by group entities and BEE trusts             1 306                                                     1 306   
Acquisition of additional shareholding in subsidiary                                                  8                                     8   
Total comprehensive income for the year                                      10 431                  81                 323            10 835   
Share-based payment reserve movement                                            151                                                       151   
Regulatory risk reserve provision                                                 7                                                         7   
Preference shares no longer held by group entities                                                                       88                88   
Other movements                                                                 (3)                                                       (3)   
Audited balance at 31 December 2014                                          67 024                 326               3 561            70 911   

Summarised consolidated statement of cashflows                                                                                     
for the year ended                                                                                     31 December   31 December   
                                                                                                              2014          2013   
                                                                                                         (Audited)     (Audited)   
                                                                                                                Rm            Rm
Cash generated by operations                                                                                21 332        20 553   
Change in funds for operating activities                                                                  (11 231)       (4 507)   
Net cash from operating activities before taxation                                                          10 101        16 046   
Taxation paid                                                                                              (4 283)       (3 890)   
Cashflows from operating activities                                                                          5 818        12 156   
Cashflows utilised by investing activities                                                                 (9 455)       (4 341)   
Cashflows utilised by financing activities                                                                 (2 132)         (800)   
Effects of exchange rate changes on opening cash and cash equivalents (excluding foreign borrowings)          (54)          (64)   
Net (decrease)/increase in cash and cash equivalents                                                       (5 823)         6 951   
Cash and cash equivalents at the beginning of the year(1)                                                   34 073        27 122   
Cash and cash equivalents at the end of the year(1)                                                         28 250        34 073   

(1) Including mandatory reserve deposits with central banks.                                                                     

Summarised segmental reporting

for the year ended                               31 December   31 December  31 December   31 December   31 December   31 December  31 December   31 December   
                                                        2014          2013         2014          2013          2014          2013         2014          2013   
                                                   (Audited)     (Audited)    (Audited)     (Audited)     (Audited)     (Audited)    (Audited)     (Audited)   
                                                          Rm            Rm           Rm            Rm            Rm            Rm           Rm            Rm   
                                                          Total assets             Total liabilities            Operating income          Headline earnings   
Nedbank Capital                                      168 172       180 708      161 281       174 845         5 037         4 380        2 128         1 726   
Nedbank Corporate                                    213 069       188 363      202 463       179 849         5 838         5 084        2 599         2 245   
Total Nedbank Retail and Nedbank Business Banking    323 840       302 371      296 275       275 688        21 975        19 929        4 031         3 468   
Nedbank Retail                                       211 904       203 155      189 795       181 252        17 040        15 502        2 937         2 539   
Nedbank Business Banking                             111 936        99 216      106 480        94 436         4 935         4 427        1 094           929   
Nedbank Wealth                                        57 609        50 911       54 779        48 424         3 986         3 553        1 042           900   
Rest of Africa Division                               27 428        20 117       23 879        18 119         1 631         1 426          357           173   
Centre                                                19 195         7 124        (275)      (11 667)           300           644        (277)           158   
Total                                                809 313       749 594      738 402       685 258        38 767        35 016        9 880         8 670   

The 2013 comparative results for the segmental reporting have been restated. The Rest of Africa Division is now reported separately, and Central Management 
and Shared Services are collectively reported as the Centre. The restatement has had no effect on the group results and ratios, and only affects segment 
results and ratios.

Offsetting financial assets and financial liabilities

In accordance with the requirements of IFRS 7 Financial Instruments: Disclosures, the table below sets out the impact of:
- recognised financial instruments that are set off in the statement of financial position in accordance with the requirements of IAS 32 Financial Instruments: Presentation; and
- financial instruments that are subject to an enforceable master netting arrangement or similar agreement that covers similar financial instruments and transactions that did not qualify for
presentation on a net basis.

The group reports financial assets and financial liabilities on a net basis in the statement of financial position only if there is a legally enforceable right to set off the recognised amounts and there is intention to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Certain master netting arrangements may not meet the criteria for offsetting in the statement of financial position because:
- these agreements create a right of setoff that is enforceable only following an event of default, insolvency or bankruptcy; and
- the group and its counterparties do not intend to settle on a net basis or to realise the assets and settle the liabilities simultaneously.

Master netting arrangements and similar agreements include derivative clearing agreements, global master repurchase agreements and global master securities lending agreements.

Similar financial instruments include derivatives, sales and repurchase agreements, reverse sale and repurchase agreements, and securities borrowing and lending agreements. Financial instruments
such as loans and deposits are not disclosed in the table below unless they are offset in the statement of financial position.

                                                                                                                 Related amounts not set off in the statement of
31 December 2014 (Audited)                           Effects of netting on the statement of financial position                  financial position
                                                                                                                            
                                                                           Amounts set off
                                                                          in the statement       Net amounts     Amounts that                 Net amounts                     Total amounts
                                                                              of financial   included in the    may be netted              reflecting the       Amounts not   recognised in
                                                                               position in      statement of       off on the            effect of master subject to IFRS 7   the statement
                                                                           accordance with         financial  occurrence of a   Financial         netting        offsetting    of financial
Rm                                                         Gross amounts            IAS 32       position(1)     future event  collateral    arrangements     disclosure(2)        position

Derivative financial instruments                                 (2 677)             2 788               111            (111)                                          (10)             101
 - Assets                                                                                             15 540                                                             33          15 573
 - Liabilities                                                                                      (15 429)                                                           (43)        (15 472)
Assets excluding derivative financial instruments                  5 387           (2 874)             2 513                -           -           2 513           610 508         613 021
 - Loans and advances                                              5 387           (2 874)             2 513                                        2 513           610 508         613 021
Liabilities excluding derivative financial instruments          (88 695)            29 516          (59 179)                -           -        (59 179)         (594 271)       (653 450)
 - Amounts owed to depositors                                   (88 695)            29 516          (59 179)                                     (59 179)         (594 271)       (653 450)

                                                                                                                 Related amounts not set off in the statement of
31 December 2013 (Audited)                           Effects of netting on the statement of financial position                  financial position

                                                                           Amounts set off
                                                                          in the statement       Net amounts     Amounts that                 Net amounts                     Total amounts
                                                                              of financial   included in the    may be netted              reflecting the       Amounts not   recognised in
                                                                               position in      statement of       off on the            effect of master subject to IFRS 7   the statement
                                                                           accordance with         financial  occurrence of a   Financial         netting        offsetting    of financial
Rm                                                         Gross amounts            IAS 32       position(1)     future event  collateral    arrangements     disclosure(2)        position

Derivative financial instruments(3)                              (2 956)                             (2 956)              506                     (2 450)             (234)         (3 190)
- Assets                                                                                              13 004                                                            386          13 390
- Liabilities                                                                                       (15 960)                                                          (620)        (16 580)
Assets excluding derivative financial instruments(3)               2 885             (831)             2 054                -           -           2 054           577 318         579 372
- Loans and advances                                               2 885             (831)             2 054                                        2 054           577 318         579 372
Liabilities excluding derivative financial instruments(3)       (71 322)            16 187          (55 135)                -           -        (55 135)         (547 817)       (602 952)
- Amounts owed to depositors                                    (71 322)            16 187          (55 135)                                     (55 135)         (547 817)       (602 952)

(1) Includes the net amount of financial assets and financial liabilities where offsetting has been applied in terms of IAS 32 and financial instruments that are subject to master netting agreements but where no offsetting has been applied. Excludes financial instruments that
are neither subject to setoff nor master netting agreements.
(2) Includes financial instruments that are neither subject to setoff nor master netting agreements.
(3) During 2014 the group enhanced its accounting processes and management information and expanded the disclosure relating to the offsetting of financial assets and liabilities in its consolidated financial statements. This expanded disclosure resulted in a restatement to
2013 comparative information.

Contingent liabilities and commitments

CONTINGENT LIABILITIES AND UNDRAWN FACILITIES

                                                  31 December     31 December
                                                         2014            2013
                                                    (Audited)       (Audited)
                                                           Rm              Rm
Guarantees on behalf of clients                        23 778          35 806
Letters of credit and discounting transactions          3 262           3 205
Irrevocable unutilised facilities and other           104 429          95 255
                                                      131 469         134 266

The group, in the ordinary course of business, enters into transactions that expose the group to tax, legal and business risks. Provisions are made for known liabilities that are expected to
materialise. Possible obligations and known liabilities where no reliable estimate can be made or it is considered improbable that an outflow would result are reported as contingent
liabilities. This is in accordance with IAS 37: Provisions, Contingent Liabilities and Contingent Assets.

There are a number of legal or potential claims against Nedbank Group Ltd and its subsidiary companies, the outcome of which cannot at present be foreseen.

COMMITMENTS

Capital expenditure approved by directors

                                             31 December     31 December
                                                    2014            2013
                                               (Audited)       (Audited)
                                                      Rm              Rm
Contracted                                         1 294             247
Not yet contracted                                 1 286             889
                                                   2 580           1 136

Funds to meet capital expenditure commitments will be provided from group resources. In addition, capital expenditure is incurred in the normal course of business throughout the year.

Operating lease commitments

Companies in the group have entered into leases over fixed property, furniture and other equipment for varying periods. The group is a major lessor of properties, which are subject to
individual contracts that specify the group's option to renew leases, escalation clauses and purchase options, if applicable. Due to the large number of lease agreements entered into by the
group, this information has not been provided in the annual financial statements, but is available from the group on request. The following are the minimum lease payments under non-
cancellable leases:

31 December 2014 (Audited)     2015     2016-2019       Beyond 2019
                                 Rm            Rm                Rm
Land and buildings(1)           726         2 033             2 598
Furniture and equipment         286           173   
                              1 012         2 206             2 598
    
31 December 2013 (Audited)     2014     2015-2018       Beyond 2018
                                 Rm            Rm                Rm
Land and buildings(1)           756         2 002             2 682
Furniture and equipment         246           410                 2
                              1 002         2 412             2 684

(1) The group may from time to time enter into subleases of properties where it is the lessee. These subleases are considered to be immaterial in the context of the group's overall leasing arrangements.

Commitments under derivative instruments

The group enters into option contracts, financial futures contracts, forward rate and interest rate swap agreements and other financial agreements in the normal course of business.

Registered office
Nedbank Group Limited, Nedbank 135 Rivonia Campus, 135 Rivonia Road,
Sandown, Sandton, 2196.
PO Box 1144, Johannesburg, 2000.

Transfer secretaries in SA
Computershare Investor Services (Pty) Ltd, 70 Marshall Street,
Johannesburg, 2001, SA.
PO Box 61051, Marshalltown, 2107, SA.

Transfer secretaries in Namibia
Transfer Secretaries (Pty) Ltd, Robert Mugabe Avenue No 4,
Windhoek, Namibia.
PO Box 2401, Windhoek, Namibia.

Directors
Dr RJ Khoza (Chairman), MWT Brown* (Chief Executive), DKT Adomakoh
(Ghanaian), TA Boardman, BA Dames, GW Dempster*, MA Enus-Brey,
ID Gladman (British), PB Hanratty (Irish), PM Makwana, Dr MA Matooane, NP
Mnxasana, RK Morathi* (Chief Financial Officer), JK Netshitenzhe, 
MC Nkuhlu* (Chief Operating Officer), JVF Roberts (British), GT Serobe, 
MI Wyman** (British).

* Executive ** Senior independent non-executive director

Company Secretary:            TSB Jali
Reg no:                       1966/010630/06
JSE share code:               NED
NSX share code:               NBK
ISIN:                         ZAE000004875
Sponsors in SA:               Merrill Lynch South Africa (Pty) Ltd
                              Nedbank Capital
Sponsor in Namibia:           Old Mutual Investment Services (Namibia) (Pty)
                              Ltd

This announcement is available on the group's website at
nedbankgroup.co.za, together with the following additional information:

-   Detailed financial information in HTML and PDF formats.
-   Financial results presentation to analysts.
-   Link to a webcast of the presentation to analysts.

For further information please contact Nedbank Group Investor Relations at
nedbankgroupir@nedbank.co.za.

Enquiries
External communications
Patrick Bowes             UK   +44 20 7002 7440
Investor relations
Dominic Lagan             UK   +44 20 7002 7190
Sizwe Ndlovu              SA   +27 11 217 1163

Media
William Baldwin-Charles        +44 20 7002 7133
                               +44 7834 524833

Notes to Editors

Old Mutual provides investment, savings, insurance and banking services to more than 16 million customers in
Africa, the Americas, Asia and Europe. Originating in South Africa in 1845, Old Mutual has been listed on the
London and Johannesburg Stock Exchanges, among others, since 1999.

In the year ended 31 December 2013, the Group reported adjusted operating profit before tax of £1.6 billion (on
an IFRS basis) and had £294 billion of funds under management from core operations.

For further information on Old Mutual plc, please visit the corporate website at www.oldmutual.com
In the year ended 31 December 2013, the Group reported adjusted operating profit before tax of £1.6
billion (on an IFRS basis) and had £294 billion of funds under management from core operations.

For further information on Old Mutual plc, please visit the corporate website at www.oldmutual.com

Lead Sponsor to Old Mutual:
Merrill Lynch South Africa (Pty) Limited

Joint Sponsor to Old Mutual:
Nedbank Capital
Date: 23/02/2015 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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