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NEDBANK GROUP LIMITED - Condensed Consolidated Interim Financial Results for the six months ended 30 June 2015

Release Date: 04/08/2015 08:00
Code(s): NED     PDF:  
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
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