Wrap Text
Condensed Consolidated Interim Financial Results for the six months ended 30 June 2015
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' or 'the Group')
Condensed consolidated interim financial results for the six months
ended 30 June 2015
- Headline earnings increased 15,7% to R5 323m
- Diluted headline earnings per share up 14,1% to 1 101 cents
- Growth in net asset value per share of 6,1%
- NIR-to-expenses ratio improved to 83,1%
- Return on equity (excluding goodwill) increased to 17,3%
- Common-equity tier 1 ratio at 11,4%
- Interim dividend per share up 16,7% to 537 cents
'Nedbank Group delivered a strong set of results for the first half of 2015, achieving an increase of 15,7% in headline earnings and a return on equity
(excluding goodwill) of 17,3%.
Headline earnings growth was supported by strong non-interest revenue generation and disciplined expense management resulting in a higher NIR-to-
expenses ratio of 83,1%. The credit loss ratio continued to improve and, following our R6bn investment in October 2014 to acquire approximately 20% of
Ecobank Transnational Incorporated, earnings from our activities in the rest of Africa grew strongly.
The strategic choices we have made continue to support our ability to grow in an increasingly demanding macro and regulatory environment. We have
simplified our businesses and are generating synergies from integrating our Retail and Business Banking Clusters and from combining our wholesale
businesses to form Nedbank Corporate and Investment Banking. Our transactional banking franchise continues to strengthen with growth of 8% in main
banked retail clients.
Our expectation of organic growth in diluted headline earnings per share for the year ending 31 December 2015 to be above nominal gross domestic product
growth remains unchanged.'
Mike Brown
Chief Executive
Banking and economic environment
Global economic headwinds have increased as the Greek debt crisis intensified and heightened concerns around the sustainability of growth in China
led to weakness in commodity prices and volatility in the Chinese stock market. While advanced economies recorded a gradual recovery, growth in
emerging economies remained below expectations. The International Monetary Fund downgraded its global gross domestic product (GDP) growth
forecast to 3,3% in 2015 from the 3,5% projected earlier this year.
In SA, growth in GDP expanded by only 1,3% in the first quarter of 2015, supported by marginally stronger growth in household consumption
expenditure and growth in gross fixed-capital formation.
Underlying credit demand was moderate, with retail credit demand remaining weak as household debt to disposable income increased to 78,4%. In
the wholesale sector conditions for production remained challenging. Although export growth was supported by the weaker rand and lower crude oil
price, these have been offset by a combination of power shortages, higher input costs, an uncertain regulatory environment, lower international
commodity prices and weak demand in key export markets, which together have had a negative impact on business confidence. Growth in the
wholesale sector has largely been driven by government infrastructure projects.
Pleasingly, international credit rating agencies Fitch and Standard & Poor's reaffirmed SA's sovereign risk ratings at an investment grade of BBB with a
negative outlook and BBB- with a stable outlook respectively. While electricity constraints remain the greatest threat to domestic economic prospects,
the credit rating agencies acknowledge the progress made in the tightening of fiscal policy and reduction of the budget deficit, as well as maintaining
inflation within the target range of 3% to 6%.
Review of results
Headline earnings for the six months ended 30 June 2015 ('the period') grew 15,7% to R5 323m (June 2014: R4 599m), underpinned by strong non-
interest revenue (NIR) growth, disciplined expenses growth, ongoing improvement in impairments and faster growth from our activities in the rest of
Africa, including associate income from our shareholding in Ecobank Transnational Incorporated (ETI).
Diluted headline earnings per share (HEPS) increased 14,1% to 1 101 cents (June 2014: 965 cents) and headline earnings per share grew by 13,7% to
1 128 cents (June 2014: 992 cents).
The increases in the return on average ordinary shareholders' equity (ROE), excluding goodwill to 17,3% (June 2014: 16,5%) and of the ROE to 16,0%
(June 2014: 15,1%), were driven by a higher return on assets (ROA) of 1,28% (June 2014: 1,22%). Economic profit (EP) increased by 59,4% to R1 328m
(June 2014: R833m) against a cost of equity (COE) of 13,0% (June 2014: 13,5%).
The group remained well capitalised with our Basel III common-equity tier 1 (CET1) ratio at 11,4% (Dec 2014: 11,6%). The Liquidity coverage ratio (LCR)
at 76,3% in the second quarter of 2015 (Dec 2014: 66,4%) is well above the 60% requirement in 2015 and is reflective of strong funding and liquidity
levels. The group's portfolio of high-quality liquid assets and other sources of quick liquidity amounted to R148,4bn (Dec 2014: R126,0bn).
Delivering sustainably to all our stakeholders
Nedbank Group is committed to operating on a sustainable basis and creating long-term value for all our stakeholders as embodied in our vision to be
Africa's most admired bank by our staff, clients, shareholders, regulators and communities.
For staff –bedding down leadership and structural changes and embedding the core values of accountability, integrity, respect, being people-centred and
pushing beyond boundaries; improving staff transformation; and investing R230m in training, with more than 2 000 staff participating in learning academy
programmes, more than 400 unemployed youth participating in various specialised learnerships and 111 external bursars across 19 universities being
supported.
For clients – investing in client-centred innovation such as the Nedbank Instant Bond Indicator to assist clients with the home loan application process and
create internal process efficiencies. 'Easy to do credit' was implemented in Business Banking, improving turnaround times and removing paper from the credit
approval process. To improve client access through our distribution channels, we have rolled out 200 Intelligent Depositors, 8 195 point-of-sale devices and 179
net new ATMs since June 2014, as well as a further 145 branches in the 'branch of the future' format. Digitally enabled clients increased 31%, supporting 69%
growth in the value of Nedbank App Suite™ transactions to R7bn. Group client numbers increased 5,8% to 7,3m since June 2014 and main banked clients
were up 8,2%. We advanced R88,5bn (June 2014: R86,1bn) of new loans to clients, and assets under management grew by 11,4% to R233,5bn (June 2014:
R209,5bn). For the sixth consecutive year Nedgroup Investments was placed third overall in the Domestic Management Company category at the Raging Bull
Awards and ranked as the top unit trust company in SA in the March 2015 Plexcrown quarterly ratings.
For shareholders – growing net asset value per share by 6,1% to 14 428 cents (June 2014: 13 596 cents), improving the ROE to 17,3% (June 2014: 16,5%),
delivering EP of R1 328m (up 59,4%) and increasing the interim dividend by 16,7%, ahead of the 13,7% growth in HEPS. We remain focused on our vision
to be Africa's most admired bank by judiciously expanding into the rest of Africa, where economic growth is faster than in SA. In West and Central Africa
our R6bn investment in ETI provides our shareholders with access to higher earnings growth potential in these markets.
For regulators – achieving full compliance with Basel III phase-in requirements, including maintaining strong capital levels with a CET1 ratio of 11,4%, an
average long-term funding ratio of 27,6% and a second-quarter LCR ratio of 76,3% (above the 1 January 2015 minimum SARB requirement of 60,0%);
maintaining strong, transparent relationships with all regulators; contributing to industry working groups on new regulation; and continuing to support
responsible banking practices. We continue to work with Old Mutual plc and our regulators in SA on the implications of the proposed Twin Peaks regulations,
which are planned to be implemented in 2016.
For communities – advancing R26,8bn in new loans to retail clients, expanding our footprint and making banking more accessible to all. Since 2010 we have
contributed R560m to socioeconomic development, including R52m in the first half of 2015. Following the maturity of our Broad Based Black Economic
Empowerment Schemes in February 2015, and in conjunction with our black business partners, Nedbank and Old Mutual Emerging Markets have each
committed R100m over 3 years to invest in initiatives aligned to the National Development Plan. We have maintained our level 2 broad-based black economic
empowerment contributor status for the sixth consecutive year and once again ranked first among our peer group. Through our Fair Share 2030 initiative we
have developed solutions for the healthcare, agriculture and manufacturing sectors that contribute to building a prosperous country.
Cluster financial performance
During the period under review we completed the integration of the support areas in Nedbank Retail and Business Banking (RBB) and our wholesale
clusters, Nedbank Corporate and Nedbank Capital, into Nedbank Corporate and Investment Banking (CIB). In total and before central profits and
losses the business clusters reported headline earnings growth of 19,9% to R5 480m (June 2014: R4 571m) and an ROE of 19,7% (June 2014: 18,7%).
Headline
% earnings
change (Rm)1 ROE (%)
June June June June
2015 2014 2015 2014
CIB 12,3 2 485 2 212 22,9 26,3
Capital 17,9 1 242 1 053 32,3 31,6
Corporate 7,2 1 243 1 159 17,8 22,8
RBB 16,4 2 132 1 831 15,9 13,9
Business Banking 5,3 539 512 19,9 19,5
Retail 20,8 1 593 1 319 14,9 12,5
Wealth 11,9 519 464 38,9 33,9
Rest of Africa > 100,0 344 64 15,3 4,4
Business clusters 19,9 5 480 4 571 19,7 18,7
Centre > (100,0) (157) 28
Total 15,7 5 323 4 599 16,0 15,1
Nedbank CIB performed well, with strong growth in our Markets business and Commercial Property Finance, and enhanced efficiencies as a result of
integration synergies. The ROE was lower than in the prior period as a result of higher economic capital allocations. Earnings growth was supported by CIB's
strong franchise, reflected in preprovisioning operating profit increasing 26,3% to R3 837m (June 2014: R3 037m). This was underpinned by strong net
interest income (NII) growth, enabled by good advances growth from commercial property finance and investment banking, while NIR growth was driven
by good performance in trading income and property private-equity investments.
Nedbank RBB produced strong headline earnings growth and an improved ROE. This reflects a higher earnings contribution from the Retail business, with
its ROE in excess of the group's cost of equity and that of the prior period. Overall, growth in earnings was underpinned by an increase in NIR despite selected
price reductions and interchange headwinds, lower impairment charges and well-controlled expense growth.
Nedbank Wealth continued to generate good earnings growth at an attractive ROE. These results were attributed to continued growth momentum in Asset
Management and Wealth Management, offset by a marginal decline in Insurance earnings as a result of our selective origination strategies for personal
loans.
The strong growth in earnings in the Rest of Africa Cluster was driven by associate income generated from our approximately 20% investment in ETI, less
funding costs, as well as a sound performance from our subsidiaries in the South African Development Community (SADC). This was partially offset by
ongoing central investment costs.
Financial performance
Net interest income
NII increased 3,7% to R11 675m (June 2014: R11 263m) as the 9,6% growth in average interest-earning banking assets was partially offset by the
narrowing of the net interest margin (NIM) to 3,36% (June 2014: 3,55%). In December 2014 NIM was 3,52%.
Margin pressure resulted as the 7 basis points (bps) benefit from endowment income and improved asset pricing was offset by a negative impact of:
- 11 bps due to changes in the advances mix as lower-margin wholesale advances grew faster than higher-margin retail advances;
- 6 bps from holding higher levels of low-yielding, high-quality liquid assets in line with increasing regulatory requirements; and
- 7 bps related to the cost of funding our investment in ETI.
Impairments charge on loans and advances
Impairments remained flat at R2 307m (June 2014: R2 333m), while the credit loss ratio (CLR) improved to 0,77% (June 2014: 0,83%) as a result of a
lower specific impairments charge of 0,73% (June 2014: specific: 0,78%) and the decrease in the portfolio impairments charge to 0,04% (June 2014:
portfolio: 0,05%).
Jun Jun Dec
Credit loss ratio (%) 2015 2014 2014
Specific impairments 0,73 0,78 0,72
Portfolio impairments 0,04 0,05 0,07
Total credit loss ratio 0,77 0,83 0,79
The improvement of the CLR was largely attributable to RBB's CLR remaining below target range, demonstrating the outcome of selective asset
origination and strong collections management. Postwriteoff recoveries increased to R520m (June 2014: R422m), of which R196m (June 2014: R153m)
was attributable to personal loans. CIB experienced an increase in its CLR as we exited a single-client exposure as well as increased portfolio impairments
as a result of ratings migration following market conditions worsening.
% Through-the-
banking Jun Jun Dec cycle target
Credit loss ratio (%) advances 2015 2014 2014 ranges
CIB 47,2 0,38 0,15 0,19
Capital 13,7 0,41 (0,04) 0,14 0,10–0,55
Corporate 33,5 0,36 0,22 0,21 0,20–0,35
RBB 46,2 1,22 1,55 1,39
Business Banking 11,0 0,49 0,44 0,42 0,55–0,75
Retail 35,2 1,44 1,90 1,70 1,90–2,60
Wealth 4,2 0,18 0,21 0,17 0,20–0,40
Rest of Africa 2,4 0,86 0,42 0,23
Group 0,77 0,83 0,79 0,80–1,20
Total defaulted advances declined to R16 695m (June 2014: R17 409m) as the residential-mortgage and personal-loan books continued to improve.
The coverage ratio for total impairments was maintained at 65,9% (June 2014: 65,9%), declining in specific impairments to 39,6% (June 2014: 42,7%),
while portfolio coverage on the performing book was maintained at 0,7% (June 2014: 0,7%).
Non-interest revenue
NIR increased 10,2% to R10 450m (June 2014: R9 480m). Growth was primarily driven by:
- Commission and fee income growth of 7,6% to R7 498m (June 2014: R6 970m) led, inter alia, by net client gains, higher transactional volumes and
inflation-related annual fee increases in RBB.
- Insurance income declining 11,0% to R816m (June 2014: R917m) owing to lower personal-loan volumes and reduced credit life pricing with
improved client product benefits.
- Trading income growth of 30,3% to R1 685m (June 2013: R1 293m) following strong performance from our markets business on the back of
increased client flows.
- Private-equity income decreasing to R115m (June 2014: R145m) as a result of lower valuations, while the increase in sundry income was mostly
comprised of property partners increasing to R125m (June 2014: R79m) as a result of realised gains on the sale of property stock.
Expenses
Expenses grew 7,4% to R12 578m (June 2014: R11 712m), reflecting disciplined cost management and traction gained from our 'optimise and invest'
strategy to deliver efficiencies through simplifying processes and rationalising systems.
The main underlying drivers include:
- Staff-related costs increasing 6,1%, consisting of –
- 7,1% growth in remuneration and other staff costs;
- 12,6% increase in short-term incentives; and
- a 33,1% reduction in long-term incentives.
- Computer processing costs up 10,3% to R1 671m, including amortisation costs increasing 10,1% to R360m.
- Fees and insurance costs 18,7% higher at R1 242m due to increased volumes of revenue-generating activities such as cash handling and card
issuing and acquiring.
- Occupation and accommodation costs growing 11,3% to R1 016m as we continued to invest in the reformatting of retail branches to the 'branch of
the future' format.
Overall, growth in gross operating income (excluding impairments and including associate income) of 8,7% exceeded that of expenses, resulting in a
positive jaws of 1,3% (June 2014: negative jaws of 4,4%), while the efficiency ratio improved to 55,8% (June 2014: 56,4%).
Associate income
Associate income increased to R436m (June 2014: R11m) and is mainly comprised of the equity accounting of our share of approximately 20% of ETI's
fourth-quarter attributable income, as reported in its 2014 full-year results, and first-quarter attributable income, as reported in its 2015 first-quarter trading
update, in line with our policy of accounting for ETI earnings a quarter in arrear. The related pretax funding costs of R246m are accounted for in NII.
Statement of financial position
Capital
Nedbank Group remains well capitalised and operated well within our Basel III capital adequacy targets. The CET1 ratio of 11,4% is lower than the 11,6%
reported at the 2014 year-end due mainly to an increase in risk-weighted assets (RWA) and foreign currency translation reserve (FCTR) losses relating
to our share of ETI's own Other Comprehensive Income (OCI) FCTR losses.
The increase in RWA resulted from a higher credit RWA, partly offset by a modest decrease in equity risk. The higher credit RWA primarily relates to:
- an industrywide South African Reserve Bank (SARB) requirement for a credit valuation adjustment (CVA) capital charge for over-the-counter ZAR
and local derivatives not cleared through a central counterparty; and
- increased conservatism applied in rating corporate banking and commercial property finance client exposures given the weak macro environment.
Internal
Jun Dec Jun target Regulatory
Basel III (%) 2015 2014 2014 range minimum(1)
CET1 ratio 11,4 11,6 12,1 10,5–12,5 6,5
Tier 1 ratio 12,1 12,5 13,1 11,5–13,0 8,0
Total capital ratio 14,5 14,6 15,0 14,0–15,0 10,0
(Ratios calculated include unappropriated profits.)
(1)The Basel III regulatory requirements are being phased in between 2013 and 2019, and exclude the Pillar 2b add-on.
Our tier 1 and total capital ratios reflect the effects of redeeming R1,8bn of hybrid debt in January 2015 and the issue of R2,3bn of Basel III-compliant tier
2 subordinated debt, in line with the group's capital plan and Basel III transitional requirements.
Funding and liquidity
Nedbank Group maintained a strong funding profile and liquidity position, underpinned by a significant quantum of long-term funding, a large surplus
liquid-asset buffer, a strong loan-to-deposit ratio that is consistently below 100%, and a low reliance on interbank and foreign-currency funding.
At June 2015 the group's quarterly average LCR of 76,3% (Dec 2014: 66,4%) exceeded the minimum regulatory requirement of 60%. The group is well
positioned to exceed the minimum requirement throughout the phase-in period as the LCR requirement increases by 10% per annum to 100% by
1 January 2019.
Jun Dec Jun
Nedbank Group Limited Liquidity coverage ratio 2015 2014 2014
High-quality liquid assets (Rm) 109 060 91 423 78 358
Net cash outflows (Rm) 143 029 137 725 152 255
Liquidity coverage ratio (%) 76,3 66,4 51,5
Regulatory minimum (%) 60,0 N/A N/A
Further details on the LCR is available in the table section of the Securities Exchange News Service (SENS) announcement.
Nedbank's portfolio of LCR-compliant, high-quality liquid assets increased to R109,1bn (Dec 2014: quarterly average R91,4bn). Together with our
portfolio of quick-liquidity sources, the total available quick liquidity amounted to R148,4bn (Dec 2014: R126,0bn), representing 17,1% of total assets.
We also maintained a strong, well-diversified funding profile. Our three-month-average long-term funding ratio of 27,6% for the second quarter of 2015
(Dec 2014: quarterly average of 25,4%) represents a slightly more conservative funding profile than the last reported industry average. The strong funding
profile was supported by growth in the Nedbank Retail Savings Bonds of R1,6bn to R13,4bn and Nedbank having successfully issued R10,5bn in senior
unsecured debt in the first half of 2015.
Further details on risk and capital management is available in the 'Risk and Balance Sheet Management review' section of this results booklet.
Loans and advances
Loans and advances grew 11,8% (annualised) to R648,8bn (Dec 2014: R613,0bn), with banking and trading assets increasing 11,4% and 31,0%
respectively.
Loans and advances by cluster are as follows:
% change Jun Dec
Rm (annualised) 2015 2014
CIB 17,1 331 069 305 158
Capital 28,7 120 646 105 601
Banking activities 8,8 82 034 78 596
Trading activities 86,7 38 612 27 005
Corporate 11,0 210 423 199 557
RBB 4,6 275 079 268 882
Business Banking (4,7) 64 297 65 819
Retail 7,7 210 782 203 063
Wealth 14,9 26 652 24 819
Rest of Africa 25,4 15 849 14 073
Centre > 100 195 89
Group 11,8 648 844 613 021
Advances growth in CIB was mostly from higher term loan growth of 18,3% (annualised) and commercial-mortgage growth (annualised) of 10,8%.
Growth in trading advances comprised mostly of surplus foreign-currency placements and deposits placed under reverse repurchase agreements.
RBB's annualised advances growth of 4,6% was impacted by the 10,4% decrease in Personal Loans, although offset by growth in new payouts, resulting in
growth in Home Loans of 1,2% and Card of 8,6%. MFC's growth slowed to 5,6% due to lower volumes in April and May 2015 as a result of the system changes
relating to the National Credit Amendment Act. The decrease in advances in Business Banking was mainly due to the migration of Professional Banking's
medical book to the Small Business Services Division in Retail. Excluding this migration, Business Banking's and Retail's advances grew 10,4% and 2,8%
respectively.
Deposits
Deposits grew 11,4% (annualised) to R690,5bn (Dec 2014: R653,5bn) resulting in a loan-to-deposit ratio of 94,0% (Dec 2014: 93,8%).
Total funding-related liabilities grew 13,6% (annualised) to R735,7bn (Dec 2014: R689,1bn) following R10,5bn of long-term capital market funding
issued in the first half of 2015.
The group's focus on growing household and commercial liabilities led to the introduction of a number of new, innovative savings and deposit products
during the period such as our tax-free savings offering and 32-day fixed deposit. These initiatives, together with the increase in demand for longer-term
deposit products, supported strong growth of 50,2% in fixed deposits, 8,7% in savings accounts and 7,6% in call and term deposits.
Group strategic focus
We have made good progress with our five key strategic focus areas and this positions us well for continued growth in a demanding macroeconomic
environment with an escalating regulatory agenda:
- Client-centred innovation: We continue to introduce innovative products such as Market Edge™, Instant Bond Indicator, standalone prepaids,
Webtickets NedApp™ payment functionality, Nedbank Tax-free Savings Account and the Nedbank 32Day Notice Account that does not incur any fees
or commissions. Our progress in innovation was acknowledged with Nedbank receiving the Best Mortgage and Home Loans Product in Africa award for
2015 at The Asian Banker's 2nd Annual Middle East and Africa Awards Ceremony. Altogether 197 outlets in the 'branch of the future' format have been
converted to date to improve client experiences and we plan to reformat all branches by the end of 2019.
- Growing our transactional banking franchise: The investments in our franchise over the past few years and the strategic action taken in 2014 to
keep fees at 2013 levels and selected reductions in Business Banking and Small Business Services have proved to be beneficial as main banked
client numbers grew 8,2% to 2,53m. In our wholesale business we recently won the eThekwini Metropolitan Municipality transactional account.
This acquisition joins the Western Cape provincial government and various municipal accounts that have been acquired in the public sector since
2007, indicative of the highly innovative transactional banking solutions in CIB. Nedbank's relatively lower share of primary clients in both retail
and wholesale continues to be an attractive opportunity for future growth.
- Optimise and invest: A focus on driving efficiencies is particularly relevant given the environment of slower GDP and hence income growth. Our
managed evolution approach in technology aims to enhance systems over time, deliver business benefits and manage costs within a
predetermined cashflow budget. Our strategy to 'rationalise, standardise and simplify' our information technology environment from 250 to 60
systems has resulted in 81 systems being decommissioned since 2010 and a further 13 are planned for the remainder of 2015. Our expense
optimisation programme aims to unlock R900m of cost savings in 2015 through initiatives such as the rationalisation of RBB backoffice
operations, the CIB integration, cost optimisation and efficiency initiatives. Within the greater Old Mutual group in SA (Nedbank, OMSA, and
Mutual & Federal) we are on track collectively to unlock cost and revenue synergies of R1bn before tax in 2017. We currently expect that just less
than 30% of this will accrue to Nedbank.
- Strategic portfolio tilt: We continue to benefit from the early actions taken in reducing the backbook of our home loan and personal-loan portfolios.
Derisking these portfolios has positioned Nedbank well for market-related growth going forward, while retaining our selective origination credit
criteria. We continue to strengthen our focus on growing EP-generative aspects such as transactional deposits, transactional banking and the rest of
Africa. The actions taken over the past four years have strengthened our balance sheet, impairments have declined to the lower end of our target
range, and we have delivered dividend growth ahead of HEPS growth.
- Pan-African banking network: In Central and West Africa we are following a partnership approach through our strategic alliance with ETI. In
2014 we invested approximately R6bn to obtain approximately 20% of ETI, thereby enabling our clients to grow with us and our partners on the
continent and our shareholders to participate in the higher growth opportunity in the rest of Africa. More than 70 of our wholesale clients now
conduct their transactional banking with Ecobank and we have concluded two joint deals in 2015 and are working closely together on building a
strong deal pipeline. In the SADC and East Africa we continued to invest in our existing subsidiaries, by implementing the Flexcube core banking
system in Namibia, investing in skills and distribution, while bedding down the acquisition of approximately 37% of Banco Único in Mozambique,
with a pathway to control in 2016. We continue to explore acquisition opportunities in the SADC and East Africa as we plan to increase from 6 to
10 countries over time.
Economic outlook
The local economy is expected to improve slightly in 2015 off the low 2014 base, supported by household spending and a modest improvement
in global demand. Growth in GDP for SA is currently forecast at 2,0% for 2015, with risk remaining to the downside, given ongoing electricity
constraints and commodity price weakness.
In view of inflationary factors due to the weaker rand and the anticipated normalisation of US interest rates, we currently expect the Reserve Bank
to increase interest rates by a further 25 bps in September 2015.
Growth in loans to households will remain constrained due to the weak job market and high debt levels, increasing only moderately off last year's
low base. Corporate credit demand will continue to be affected by the soft economic environment and many uncertainties relating to power
supply, labour relations, commodity prices and economic policies, which negatively impact business confidence. Growth in the corporate sector
will largely be driven by downstream government infrastructure projects and global demand.
Prospects
Our guidance on financial performance for the full year is as follows:
- Advances to grow above mid-single digits.
- NIM to be slightly below the level reported in the 2015 interim results of 3,36%.
- CLR to be at the lower end of the through-the-cycle target range of 80 bps to 120 bps.
- NIR (excluding fair-value adjustments) to grow above mid-single digits.
- Expenses to increase above mid-single digits.
Our financial guidance for organic growth in diluted HEPS in 2015 to be greater than nominal GDP growth and our medium-to-long-term targets remain
unchanged. The outlook for these in 2015 is as follows:
Metric Jun 2015 2015 full-year outlook Medium-to-long-term targets
performance
ROE (excluding goodwill) 17,3% Below target 5% above cost of ordinary
shareholders' equity
= consumer price index + GDP growth
= consumer price index + GDP growth
Growth in diluted HEPS 14,1% + 5%
CLR 0,77% Between 0,8% and 1,2% of average
At lower end of target range
banking advances
NIR-to-expense ratio 83,1% Below target > 85%
Efficiency ratio (including associate 55,8% Above target 50,0% to 53,0%
income)
CET1 capital adequacy ratio (Basel III) 11,4% Within target range 10,5% to 12,5%
Economic capital Internal Capital Adequacy Assessment Process (ICAAP): A debt rating (including 10% capital buffer)
Dividend cover 2,10 times 1,75 to 2,25 times 1,75 to 2,25 times
Shareholders are advised that these forecasts are based on organic earnings and our latest macroeconomic outlook, and have not been reviewed or
reported on by the group's auditors.
Board appointments
With effect from 1 May 2015 Vassi Naidoo was appointed Non-executive Director of Nedbank Group and Nedbank, and Chairman from 11 May 2015.
The following board directors retired at the annual general meeting on 11 May 2015, either having served on the board as a non-executive for nine years
or having retired from executive service:
- Dr Reuel Khoza, Non-executive Chairman.
- Mustaq Enus-Brey, Non-executive Director.
- Gloria Serobe, Non-executive Director.
- Graham Dempster, Executive Director.
Group executive appointments
Iolanda Ruggiero was appointed Managing Executive of Nedbank Wealth and joined our Group Executive Committee with effect from 1 May 2015.
Accounting policies
Nedbank Group Limited is a company domiciled in SA. The condensed consolidated interim financial results of the group at and for the six months ended
30 June 2015 comprise the company and its subsidiaries (the 'group') and the group's interests in associate companies and joint arrangements.
The financial results contained in the SENS announcement have been prepared in accordance with International Financial Reporting Standard (IAS) 34:
Interim Financial Reporting, excluding paragraph 16A(j) as permitted by the JSE listings requirements; the South African Institute of Chartered
Accountants (SAICA) Financial Reporting Guides as issued by the Accounting Practices Committee and the Financial Pronouncements as issued by the
Financial Reporting Standards Council and the requirements of the Companies Act of South Africa. A full analysis of the results for the six months, which
includes full IAS 34 disclosure, is available from the company's registered office upon request. The financial results contained in the
SENS announcement have been extracted from the condensed consolidated interim financial statements.
The accounting policies applied in the preparation of the condensed consolidated interim financial statements are in terms of International Financial Reporting
Standards and are consistent with the accounting policies applied in the preparation of the previous annual financial statements.
The condensed consolidated interim financial results have been prepared under the supervision of Raisibe Morathi, the Chief Financial Officer.
Events after the reporting period
There are no material events after the reporting period to report on.
Reviewed results – auditors' conclusion
While these condensed consolidated interim financial results are neither audited nor reviewed, KPMG Inc and Deloitte & Touche, Nedbank Group's
independent auditors, have reviewed and expressed an unmodified review conclusion on the condensed consolidated interim financial statements of
Nedbank Group Limited, from which the financial results contained in the SENS announcement have been extracted.
The auditors' review report does not necessarily report on all the information contained in this announcement as it excludes information pursuant to
paragraph 16A(j) as permitted by the JSE listings requirements and includes additional commentary. 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 condensed consolidated interim financial results and for correctly extracting the financial
information from those underlying reviewed condensed consolidated interim financial results for inclusion in the SENS announcement.
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 or reported on by the group's auditors.
Interim dividend declaration
Notice is hereby given that a gross interim dividend of 537 cents per ordinary share has been declared, payable to shareholders for the six months ended
30 June 2015. 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 80,55 cents per ordinary share, resulting in a net dividend of
456,45 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 494 411 956.
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) Friday, 4 September 2015
Shares commence trading (ex dividend) Monday, 7 September 2015
Record date (date shareholders recorded in books) Friday, 11 September 2015
Payment date Monday, 14 September 2015
Share certificates may not be dematerialised or rematerialised between Monday, 7 September 2015, and Friday, 11 September 2015, both days inclusive.
On Monday, 14 September 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 Monday, 14 September 2015.
The above dates and times are subject to change. Any changes will be published on SENS and in the press.
For and on behalf of the board
Vassi Naidoo Mike Brown
Chairman Chief Executive
4 August 2015
Nedbank Group Limited
Incorporated in the Republic of SA
Registration number 1966/010630/06
Registered office
Nedbank 135 Rivonia Campus, 135 Rivonia Road, Sandown, 2196, Johannesburg
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
V Naidoo (Chairman), MWT Brown* (Chief Executive), DKT Adomakoh (Ghanaian), TA Boardman, BA Dames, 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), 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.
Financial highlights
at
30 June 30 June 31 December
Change 2015 2014 2014
% (Reviewed) (Reviewed) (Audited)
Statistics
Number of shares listed (3,8) m 494,4 514,0 499,3
Number of shares in issue, excluding shares held by group entities 2,3 m 476,0 465,2 465,6
Weighted average number of shares 1,9 m 472,1 463,4 464,4
Diluted weighted average number of shares 1,5 m 483,5 476,5 478,2
Preprovisioning operating profit 10,4 Rm 9 450 8 559 17 873
Economic profit1 59,4 Rm 1 328 833 2 112
Headline earnings per share 13,7 cents 1 128 992 2 127
Diluted headline earnings per share 14,1 cents 1 101 965 2 066
Ordinary dividends declared per share 16,7 cents 537 460 1 028
Interim cents 537 460 460
Final cents 568
Ordinary dividends paid per share 12,5 cents 568 505 965
Dividend cover times 2,10 2,16 2,07
Net asset value per share 6,1 cents 14 428 13 596 14 395
Tangible net asset value per share 6,7 cents 12 587 11 795 12 553
Closing share price 5,5 cents 24 180 22 917 24 900
Price/earnings ratio historical 10,6 11,5 11,7
Market capitalisation 1,4 Rbn 119,5 117,8 124,3
Number of employees (permanent staff) 2,3 30 739 30 061 30 499
Number of employees (permanent and temporary staff) 0,3 31 405 31 309 31 422
Key ratios (%)
Return on ordinary shareholders' equity (ROE) 16,0 15,1 15,8
ROE, excluding goodwill 17,3 16,5 17,2
Tangible ROE 18,3 17,4 18,2
Return on total assets (ROA) 1,28 1,22 1,27
Return on risk-weighted assets1 2,35 2,25 2,24
Net interest income to average interest-earning banking assets 3,36 3,55 3,52
Credit loss ratio – banking advances 0,77 0,83 0,79
Gross operating income growth rate less expense growth rate
(Jaws ratio) 1,3 (4,4) (2,5)
Non-interest revenue to total operating expenses 83,1 80,9 82,8
Non-interest revenue to total income 47,2 45,7 46,9
Efficiency ratio (including share of profits of associate companies
and joint arranagements) 55,8 56,4 56,5
Effective taxation rate 24,8 25,4 25,3
Group capital adequacy ratios (including unappropriated profits)(1):
– Common-equity tier 1 11,4 12,1 11,6
– Tier 1 12,1 13,1 12,5
– Total 14,5 15,0 14,6
Statement of financial position statistics (Rm)
Total equity attributable to equity holders of the parent 8,6 68 679 63 247 67 024
Total equity 8,2 72 574 67 078 70 911
Amounts owed to depositors 9,3 690 495 631 663 653 450
Loans and advances 6,7 648 844 608 210 613 021
Gross 6,5 659 848 619 686 624 116
Impairment of loans and advances (4,1) (11 004) (11 476) (11 095)
Total assets administered by the group 10,8 1 100 105 993 293 1 021 326
Total assets 10,6 866 624 783 792 809 313
Assets under management 11,4 233 481 209 501 212 013
Life insurance embedded value 10,8 2 395 2 162 2 393
Life insurance value of new business 4,0 129 124 257
Foreign currency conversion rates
Pound sterling at the end of the period 5,5 R 19,15 18,15 18,04
Pound sterling average rate for the period 1,7 R 18,24 17,93 17,88
US dollar at the end of the period 14,2 R 12,14 10,63 11,58
US dollar average rate for the period 11,7 R 11,94 10,69 10,87
(1) These metrics have not been reviewed by the group's auditors.
condensed consolidated statement of comprehensive income
for the period ended
30 June 30 June 31 December
2015 2014 2014
Change (Reviewed) (Reviewed) (Audited)
% Rm Rm Rm
Interest and similar income 12,8 28 513 25 282 52 619
Interest expense and similar charges 20,1 16 838 14 019 29 658
Net interest income 3,7 11 675 11 263 22 961
Impairments charge on loans and advances (1,1) 2 307 2 333 4 506
Income from lending activities 4,9 9 368 8 930 18 455
Non-interest revenue 10,2 10 450 9 480 20 312
Operating income 7,6 19 818 18 410 38 767
Total operating expenses 7,4 12 578 11 712 24 534
Indirect taxation 9,3 328 300 635
Profit from operations before non-trading and capital items 8,0 6 912 6 398 13 598
Non-trading and capital items < (100) 5 (1) (109)
Net profit/(loss) on sale of subsidiaries, investments, and property and
equipment 5 6 (12)
Net impairment of investments, property and equipment, and capitalised
development costs (7) (97)
Fair-value adjustments of investment properties 6
Profit from operations 8,1 6 917 6 397 13 495
Share of profits of associate companies and joint arrangements > 100 436 11 161
Profit before direct taxation 14,7 7 353 6 408 13 656
Total direct taxation 11,9 1 820 1 627 3 468
Direct taxation 1 820 1 627 3 487
Taxation on non-trading and capital items (19)
Profit for the period 15,7 5 533 4 781 10 188
Other comprehensive income net of taxation < (100) (800) 115 647
Items that may subsequently be reclassified to profit or loss
– Exchange differences on translating foreign operations 440 99 390
– Fair-value adjustments on available-for-sale assets 22 21
– Share of other comprehensive income of investments accounted for using the
equity method (1 509)
Items that may not subsequently be reclassified to profit or loss
– Gains on property revaluations 1 (6) 202
– Remeasurements on long-term employee benefit assets 90 34
– Share of other comprehensive income of investments accounted for using the
equity method 178
Total comprehensive income for the period (3,3) 4 733 4 896 10 835
Profit attributable to:
– Equity holders of the parent 15,9 5 328 4 598 9 796
– Non-controlling interest – ordinary shareholders 8,0 27 25 69
– Non-controlling interest – preference shareholders 12,7 178 158 323
Profit for the period 15,7 5 533 4 781 10 188
Total comprehensive income attributable to:
– Equity holders of the parent (3,6) 4 537 4 706 10 431
– Non-controlling interest – ordinary shareholders (43,8) 18 32 81
– Non-controlling interest – preference shareholders 12,7 178 158 323
Total comprehensive income for the period (3,3) 4 733 4 896 10 835
Basic earnings per share (cents) 13,8 1 129 992 2 109
Diluted earnings per share (cents) 14,2 1 102 965 2 049
30 June 30 June 31 December
30 June 2015 30 June 2014 31 December 2014
2015 (Reviewed) 2014 (Reviewed) 2014 (Audited)
(Reviewed) Rm (Reviewed) Rm (Audited) Rm
Change Rm Net of Rm Net of Rm Net of
% Gross taxation Gross taxation Gross taxation
Profit attributable to equity holders of
the parent 15,9 5 328 4 598 9 796
Less: Non-headline earnings items 5 5 (1) (1) (103) (84)
Net profit/(loss) on sale of subsidiaries,
investments, and property and
equipment 5 5 6 6 (12) 7
Net impairment of investments,
property and equipment, and capitalised
development costs (7) (7) (97) (97)
Fair-value adjustments of investment
properties 6 6
Headline earnings 15,7 5 323 4 599 9 880
condensed consolidated statement of financial position
at
30 June 30 June 31 December
Annualised 2015 2014 2014
change (Reviewed) (Reviewed) (Audited)
% Rm Rm Rm
Assets
Cash and cash equivalents > 100 28 892 13 687 13 339
Other short-term securities (3,5) 66 083 50 487 67 234
Derivative financial instruments (10,9) 14 732 13 393 15 573
Government and other securities 77,7 37 649 30 551 27 177
Loans and advances 11,8 648 844 608 210 613 021
Other assets (53,9) 6 386 11 331 8 715
Current taxation assets > 100 451 241 291
Investment securities (5,8) 19 449 20 532 20 029
Non-current assets held for sale (37,8) 13 12 16
Investments in private-equity associates, associate companies and joint
arrangements (13,8) 7 146 1 427 7 670
Deferred taxation assets (1,3) 307 224 309
Investment property > 100 300 120 130
Property and equipment (6,4) 7 526 7 042 7 773
Long-term employee benefit assets 7,8 4 721 4 219 4 546
Mandatory reserve deposits with central banks 6,0 15 358 13 938 14 911
Intangible assets 4,4 8 767 8 378 8 579
Total assets 14,3 866 624 783 792 809 313
Equity and liabilities
Ordinary share capital 4,3 476 465 466
Ordinary share premium 8,2 17 467 16 805 16 781
Reserves 3,9 50 736 45 977 49 777
Total equity attributable to equity holders of the parent 5,0 68 679 63 247 67 024
Non-controlling interest attributable to:
– Ordinary shareholders 4,9 334 270 326
– Preference shareholders 3 561 3 561 3 561
Total equity 4,7 72 574 67 078 70 911
Derivative financial instruments (5,9) 15 016 14 829 15 472
Amounts owed to depositors 11,4 690 495 631 663 653 450
Provisions and other liabilities > 100 22 954 14 197 13 788
Current taxation liabilities > 100 256 106 134
Deferred taxation liabilities (28,4) 800 813 931
Long-term employee benefit liabilities (0,8) 3 059 2 833 3 071
Investment contract liabilities 7,7 12 196 12 307 11 747
Insurance contract liabilities (6,1) 4 044 3 846 4 171
Long-term debt instruments 54,3 45 230 36 120 35 638
Total liabilities 15,2 794 050 716 714 738 402
Total equity and liabilities 14,3 866 624 783 792 809 313
Condensed 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 2013 60 617 246 3 473 64 336
Dividend to shareholders (2 433) (8) (2 441)
Preference share dividend (158) (158)
Issues of shares net of expenses 771 771
Shares (acquired)/no longer held by group entities and BEE trusts (294) (294)
Total comprehensive income for the period 4 706 32 158 4 896
Share-based payment reserve movement (125) (125)
Preference shares held by group entities 88 88
Regulatory risk reserve provision 5 5
Reviewed balance at 30 June 2014 63 247 270 3 561 67 078
Dividend to shareholders (2 210) (1) (2 211)
Preference share dividend (31) (31)
Shares delisted in terms of BEE transaction (1 613) (1 613)
Shares (acquired)/no longer held by group entities and BEE trusts 1 600 1 600
Acquisition of additional shareholding in subsidiary 8 8
Total comprehensive income for the period 5 725 49 31 5 805
Share-based payment reserve movement 276 276
Regulatory risk reserve provision 2 2
Other movements (3) (3)
Audited balance at 31 December 2014 67 024 326 3 561 70 911
Dividend to shareholders (2 775) (10) (2 785)
BEE transaction dividend (571) (571)
Preference share dividend (178) (178)
Issues of shares net of expenses 1 022 1 022
Shares delisted in terms of BEE transaction (336) (336)
Shares (acquired)/no longer held by group entities and BEE trusts 10 10
Total comprehensive income for the period 4 537 18 178 4 733
Share-based payment reserve movement (218) (218)
Regulatory risk reserve provision (15) (15)
Other movements 1 1
Reviewed balance at 30 June 2015 68 679 334 3 561 72 574
Condensed consolidated statement of cashflows
for the period ended
30 June 30 June 31 December
2015 2014 2014
Reviewed) (Reviewed) (Audited)
Rm Rm Rm
Cash generated by operations 10 930 10 245 21 332
Change in funds for operating activities (64) (12 986) (11 231)
Net cash from/(utilised by) operating activities before taxation 10 866 (2 741) 10 101
Taxation paid (2 200) (1 898) (4 283)
Cashflows from/(utilsed by) operating activities 8 666 (4 639) 5 818
Cashflows from/(utilised by) investing activities 647 (2 475) (9 455)
Cashflows from/(utilised by) financing activities 6 764 738 (2 132)
Effects of exchange rate changes on opening cash and cash equivalents
(excluding foreign borrowings) (77) (72) (54)
Net increase/(decrease) in cash and cash equivalents 16 000 (6 448) (5 823)
Cash and cash equivalents at the beginning of the period(1) 28 250 34 073 34 073
Cash and cash equivalents at the end of the period(1) 44 250 27 625 28 250
(1) Including mandatory reserve deposits with central banks.
Condensed segmental reporting
for the period ended
Total assets Total liabilities Operating income/(losses) Headline earnings/(losses)
30 June 30 June 31 Dec 30 June 30 June 31 Dec 30 June 30 June 31 Dec 30 June 30 June 31 Dec
2015 2014 2014 2015 2014 2014 2015 2014 2014 2015 2014 2014
(Reviewed) (Reviewed) (Audited) (Reviewed) (Reviewed) (Audited) (Reviewed) (Reviewed) (Audited) (Reviewed) (Reviewed) (Audited)
Nedbank Corporate
Investment Banking 422 890 391 953 381 241 401 042 374 969 363 744 5 793 5 231 10 875 2 485 2 212 4 727
Nedbank Retail and Busine
Banking 329 174 311 923 323 840 302 131 285 264 296 275 11 369 10 420 21 975 2 132 1 831 4 031
Nedbank Wealth 61 458 55 521 57 609 58 767 52 758 54 779 1 997 1 863 3 986 519 464 1 042
Rest of Africa 29 250 21 710 27 428 24 722 18 811 23 879 668 718 1 631 344 64 357
Centre 23 852 2 685 19 195 7 388 (15 088) (275) (9) 178 300 (157) 28 (277)
Total 866 624 783 792 809 313 794 050 716 714 738 402 19 818 18 410 38 767 5 323 4 599 9 880
During the period the Nedbank Corporate and Nedbank Capital Clusters were aggregated to form the Nedbank Corporate and Investment Banking Cluster. Similarly, the Nedbank
Retail and Nedbank Business Banking Clusters were aggregated to form the Nedbank Retail and Business Banking Cluster. The comparative segment information previously presented
for Nedbank Corporate, Nedbank Capital, Nedbank Retail, and Nedbank Business Banking has been represented based on the new aggregated clusters, ie Nedbank Corporate and
Investment Banking and Nedbank Retail and Business Banking.
Contingent liabilities and commitments
for the period ended
Contingent liabilities and undrawn facilities
30 Jun 30 Jun 31 Dec
2015 2014 2014
(Reviewed) (Reviewed) (Reviewed)
Rm Rm Rm
Guarantees on behalf of clients 25 557 36 915 23 778
Letters of credit and discounting transactions 3 287 3 378 3 262
Irrevocable unutilised facilities and other 109 631 98 148 104 429
138 475 138 441 131 469
The group, in the ordinary course of business, enters into transactions that expose it 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 be foreseen at
present.
Commitments
Capital expenditure approved by directors
30 Jun 30 Jun 31 Dec
2015 2014 2014
(Reviewed) (Reviewed) (Reviewed)
Rm Rm Rm
Contracted 1 600 212 1 294
Not yet contracted 1 238 1 390 1 286
2 838 1 602 2 580
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 period.
Liquidity coverage ratio
Nedbank Group Limited Nedbank Limited
Total Total Total Total
unweighted(1) weighted(2) unweighted(1) weighted(2)
value value value value
Rm (average) (average) (average) (average)
High-quality liquid assets (HQLA)
Total high-quality liquid assets – 109 060 – 105 958
Cash outflows
Retail deposits and deposits from small business customers, of which 182 934 15 227 171 131 14 191
Stable deposits 2 882 144
Less stable deposits 180 052 15 083 171 131 14 191
Unsecured wholesale funding, of which 235 977 131 467 205 939 114 763
Operational deposits (all counterparties) and deposits in institutional networks
of cooperative banks 111 056 31 754 96 893 27 857
Non-operational deposits (all counterparties) 124 921 99 713 109 046 86 906
Unsecured d
Secured wholesale funding 12 508 9 12 508 9
Additional requirements, of which 156 749 19 781 138 657 17 739
Outflows related to derivatives exposures and other collateral requirements 345 345 290 290
Outflows related to loss of funding on debt products 1 162 1 162 1 162 1 162
Credit and liquidity facilities 155 242 18 274 137 205 16 287
Other contractual funding obligations 44 741 3 598 44 741 3 598
Other contingent funding obligations 4 280 235
Total cash outflows 637 189 170 317 572 976 150 300
Cash inflows
Secured lending (eg reverse repos) 5 058 850 5 059 850
Inflows from fully performing exposures 33 828 24 182 19 334 10 359
Other cash inflows 4 971 4 943 2 786 2 786
Total cash inflows 43 857 29 975 27 179 13 995
Total Total
adjusted(3) adjusted(3)
Rm value value
Total high quality liquid assets 109 060 105 958
Total net cash outflows 143 029 136 305
Liquidity coverage ratio (%) 76,3% 77,7%
(1) Unweighted values are calculated as outstanding balances maturing or callable within 30 days (for inflows and outflows).
(2) Weighted values are calculated after the application of respective haircuts (for HQLA) or inflow and outflow rates (for inflows and outflows).
(3) Note that total cash outflows less total cash inflows may not be equal to total net cash outflows to the extent that regulatory caps have been applied to cash inflows as specified by the regulations.
This section on Liquidity coverage ratio has not been reviewed by the group's auditors.
Sponsors in SA: Merrill Lynch South Africa (Pty) Ltd
Nedbank Capital
Sponsor in Namibia: Old Mutual Investment Services (Namibia) (Pty) Ltd
Date: 04/08/2015 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.