NEDBANK LIMITED1 - Condensed Consolidated Interim Financial Results for the six months ended 30 June 2015

Release Date: 04/08/2015 08:01
Code(s): NBKP
 
Wrap Text
Condensed Consolidated Interim Financial Results for the six months ended 30 June 2015

Nedbank Limited
Reg No 1951/000009/06
Incorporated in the Republic of South Africa
JSE share code: NBKP
ISIN: ZAE000043667

Condensed consolidated interim financial results for the six months
ended 30 June 2015

Overview

Nedbank Limited ('Nedbank') is a wholly owned subsidiary of Nedbank Group Limited ('Nedbank Group'), which is listed on JSE Limited. These
condensed consolidated financial results are published to provide information to holders of Nedbank's listed non-redeemable non-cumulative preference
shares.

Commentary relating to the Nedbank condensed consolidated financial results is included in the Nedbank Group Limited ('Nedbank Group') results, as
presented to shareholders on 4 August 2015. Further information is provided on the website at nedbankgroup.co.za.


Board appointments

With effect from 1 May 2015, Vassi Naidoo was appointed Non-executive Director of Nedbank Group and Nedbank, and Chairman of Nedbank Group
and Nedbank 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.

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 Limited is a company domiciled in SA. These 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 Securities Exchange News Service (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 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 disclosures, is available from the company's registered office upon request.

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's independent
auditors, have reviewed and expressed an unmodified review conclusion on the condensed consolidated interim financial statements of Nedbank, from
which the financial results contained in the SENS announcement have been extracted.

The auditors' review report does not necessarily report on all of 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 this SENS announcement.

Forward-looking statements

This announcement contains certain forward-looking statements with respect to the financial condition and results of operations of Nedbank and its
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.

Nedbank non-redeemable non-cumulative preference shares – declaration of
dividend no 25

Notice is hereby given that a gross preference dividend for dividend no 25 of 38,22487 cents per share has been declared for the period from
1 January 2015 to 30 June 2015, payable on Monday, 31 August 2015, to shareholders of the Nedbank non-redeemable non-cumulative preference
shares recognised in the accounting records of the company at the close of business on Friday, 28 August 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), resulting in a net dividend of 32,49114 cents per share to those
shareholders who are not exempt from paying dividend tax. Nedbank's tax reference number is 9250/083/71/5 and the number of preference shares
in issue at the date of declaration is 358 277 491.

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

Last day to trade (cum dividend)                           Friday, 21 August 2015
Shares commence trading (ex dividend)                      Monday, 24 August 2015
Record date (date shareholders recorded in books)          Friday, 28 August 2015
Payment date                                               Monday, 31 August 2015

Share certificates may not be dematerialised or rematerialised between Monday, 24 August 2015, and Friday, 28 August 2015, both days inclusive.
Where applicable, dividends in respect of certificated shares will be transferred electronically to shareholders' bank accounts on the payment date. In
the absence of specific mandates, dividend cheques will be posted to shareholders. Shareholders who have dematerialised their share certificates will
have their accounts, at their participant or broker, credited on Monday, 31 August 2015.

For and on behalf of the board

Vassi Naidoo                                Mike Brown
Chairman                               Chief Executive

4 August 2015

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

Transfer secretaries: Computershare Investor Services (Pty) Limited, 70 Marshall Street, Johannesburg, 2001; PO Box 61051, Marshalltown, 2107.

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                                 
Sponsors                                       Investec Bank Limited, Nedbank Capital   
Nedbank Limited                                Reg No 1951/000009/06                    
Incorporated in the Republic of South Africa                                            
Jse share code                                 NBKP                                     
ISIN                                           ZAE000043667                             


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                                                       10,6       26 613        24 069        50 075
Interest expense and similar charges                                              16,9       15 632        13 371        28 322
Net interest income                                                                2,6       10 981        10 698        21 753
Impairments charge on loans and advances                                         (3,8)        2 226         2 314         4 478
Income from lending activities                                                     4,4        8 755         8 384        17 275
Non-interest revenue                                                               9,8        8 387         7 639        16 196
Operating income                                                                   7,0       17 142        16 023        33 471
Total operating expenses                                                           7,6       11 345        10 546        22 031
Indirect taxation                                                                 12,1          277           247           522
Profit from operations before non-trading and capital items                        5,5        5 520         5 230        10 918
Non-trading and capital items                                                  < (100)            3           (8)          (96)
 Net profit on sale of subsidiaries, investments, and property and equipment                      3 
 Net impairment of investments, property and equipment, and capitalised  
 development costs                                                                                            (8)          (96)
Profit from operations                                                             5,8        5 523         5 222        10 822
Share of profits of associate companies and joint arrangements                  (45,5)            6            11            12
Profit from operations before direct taxation                                      5,7        5 529         5 233        10 834
Total direct taxation                                                             12,6        1 487         1 321         2 786
 Direct taxation                                                                              1 487         1 323         2 803
 Taxation on non-trading and capital items                                                                    (2)          (17)
Profit for the period                                                              3,3        4 042         3 912         8 048
Other comprehensive income net of taxation                                     < (100)           73         (111)           126
 Items that may subsequently be reclassified to profit or loss  
  Exchange differences on translating foreign operations                                       (15)            13            14
  Fair-value adjustments on available-for-sale assets                                           (2)         (117)         (113)
 Items that may not subsequently be reclassified to profit or loss  
  Gains on property revaluations                                                                              (7)           163
  Remeasurements on long-term employee benefit assets                                            90                          62
Total comprehensive income for the period                                          8,3        4 115         3 801         8 174
Profit attributable to:  
– Ordinary and preference equity holders                                           3,4        4 024         3 893         7 998
– Non-controlling interest – ordinary shareholders                                               18            19            50 
Profit for the period                                                              3,3        4 042         3 912         8 048
Total comprehensive income attributable to:   
– Ordinary and preference equity holders                                           8,5        4 097         3 777         8 123
– Non-controlling interest – ordinary shareholders                              (25,0)           18            24            51
Total comprehensive income for the period                                          8,3        4 115         3 801         8 174

Headline earnings reconciliation
for the period ended

                                                                   30 June                  30 June                 31 December
                                                      30 June         2015     30 June         2014   31 December          2014
                                                         2015   (Reviewed)        2014   (Reviewed)          2014     (Audited)
                                           Change  (Reviewed)           Rm  (Reviewed)           Rm     (Audited)            Rm
                                                %          Rm       Net of          Rm       Net of            Rm        Net of
                                                        Gross     taxation       Gross     taxation         Gross      taxation
Profit attributable to ordinary and
preference equity holders                     3,4                    4 024                    3 893                        7998
Less: Non-headline earnings items                           3            3         (8)          (6)          (96)          (79)
 Net profit on sale of subsidiaries,
 investments, and property and equipment                    3            3
 Net impairment of investments, property
 and equipment, and capitalised
 development costs                                                                 (8)          (6)          (96)          (79)
 Headline earnings attributable to
 ordinary and preference equity holders       3,1                    4 021                    3 899                       8 077

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       24 451        11 098        10 757
Other short-term securities                                                      (5,3)       54 835        41 939        56 322
Derivative financial instruments                                                 (9,4)       14 911        13 419        15 644
Government and other securities                                                   78,7       37 296        30 004        26 828
Loans and advances                                                                 9,6      632 016       590 227       603 329
Other assets                                                                    (71,2)        3 490         6 429         5 393
Current taxation assets                                                           90,6          342           156           236
Investment securities                                                           (60,2)        1 662         2 734         2 369
Non-current assets held for sale                                                (37,8)           13            12            16
Investments in private-equity associates, associate companies and joint   
arrangements                                                                      19,9        1 272         1 182         1 158
Deferred taxation assets                                                           4,9          169            80           165
Property and equipment                                                           (7,0)        7 201         6 787         7 459
Long-term employee benefit assets                                                  6,9        4 560         4 074         4 409
Mandatory reserve deposits with central banks                                      6,2       15 302        13 886        14 843
Intangible assets                                                                  8,3        4 702         4 297         4 516
Total assets                                                                      13,1      802 222       726 324       753 444
   
Equity and liabilities   
Ordinary share capital                                                             7,5           28            27            27
Ordinary share premium                                                            12,8       18 532        17 422        17 422
Reserves                                                                           0,4       34 862        31 100        34 787
Total equity attributable to equity holders of the parent                          4,6       53 422        48 549        52 236
Preference share capital and premium                                                          3 561         3 561         3 561
Non-controlling interest attributable to ordinary shareholders                     9,9          192           156           183
Total equity                                                                       4,3       57 175        52 266        55 980
Derivative financial instruments                                                 (5,8)       15 032        14 757        15 479
Amounts owed to depositors                                                        12,0      672 521       612 487       634 623
Provisions and other liabilities                                                  10,5        8 843         7 606         8 404
Current taxation liabilities                                                     > 100          132                          35
Deferred taxation liabilities                                                     12,6          305           298           287
Long-term employee benefit liabilities                                           (0,9)        2 988         2 794         3 002
Long-term debt instruments                                                        54,3       45 226        36 116        35 634
Total liabilities                                                                 13,8      745 047       674 058       697 464
Total equity and liabilities                                                      13,1      802 222       726 324       753 444
  
Condensed consolidated statement of changes in equity

                                                                                                  Non-controlling
                                                                Total equity                             interest
                                                             attributable to        Preference    attributable to
                                                              equity holders     share capital           ordinary
                                                               of the parent       and premium       shareholders  Total equity
                                                                          Rm                Rm                 Rm            Rm
Audited balance at 31 December 2013                                   47 973             3 561                141        51 675
Preference share dividend                                              (158)                                              (158)
Dividend to ordinary shareholders                                    (2 600)                                            (2 600)
Total comprehensive income for the period                              3 777                                   24         3 801
Share-based payment reserve movement                                   (450)                                              (450)
Disposal of subsidiary                                                                                        (9)           (9)
Regulatory risk reserve provision                                          5                                                  5
Other movements                                                            2                                                  2
Reviewed balance at 30 June 2014                                      48 549             3 561                156        52 266
Preference share dividend                                              (165)                                               (165)
Dividend to ordinary shareholders                                      (800)                                               (800)
Total comprehensive income for the period                              4 346                                   27          4 373
Share-based payment reserve movement                                     305                                                 305
Regulatory risk reserve provision                                          2                                                   2
Other movements                                                          (1)                                                 (1)
Audited balance at 31 December 2014                                   52 236             3 561                183         55 980
Preference share dividend                                              (178)                                               (178)
Dividend to ordinary shareholders                                    (3 200)                                  (9)        (3 209)
Issues of shares net of expenses                                       1 111                                               1 111
Total comprehensive income for the period                              4 097                                   18          4 115
Share-based payment reserve movement                                   (629)                                               (629)
Regulatory risk reserve provision                                       (15)                                                (15)
Reviewed balance at 30 June 2015                                     53 422              3 561                192         57 175

Condensed consolidated statement of cashflows
for the period ended

                                                                                          30 June         30 June    31 December
                                                                                             2015            2014           2014
                                                                                         eviewed)      (Reviewed)      (Audited)
                                                                                               Rm              Rm             Rm
Cash generated by operations                                                                9 341           8 942         18 386
Change in funds for operating activities                                                    (587)        (12 207)       (16 624)
Net cash from/(utilised by) operating activities before taxation                            8 754         (3 265)          1 762
Taxation paid                                                                             (1 791)         (1 504)        (3 463)
Cashflows from/(utilised by) operating activities                                           6 963         (4 769)        (1 701)
Cashflows utilised by investing activities                                                  (125)         (1 006)        (2 011)
Cashflows from/(utilised by) financing activities                                           7 326              93        (1 354)
Effects of exchange rate changes on opening cash and cash equivalents (excluding foreign
borrowings)                                                                                  (11)             (1)            (1)
Net increase/(decrease) in cash and cash equivalents                                       14 153         (5 682)        (5 066)
Cash and cash equivalents at the beginning of the period(2)                                25 600          30 666         30 666
Cash and cash equivalents at the end of the period(2)                                      39 753          24 984         25 600
(1) Represents amounts less than R1m
(2) 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 December    30 June        30 June   31 December     30 June     30 June  31 December      30 June      30 June   31 December
                               2015        2014         2014       2015           2014          2014        2015        2014         2014         2015         2014          2014
                         (Reviewed)  (Reviewed)    (Audited) (Reviewed)     (Reviewed)     (Audited)  (Reviewed)  (Reviewed)    (Audited)   (Reviewed)   (Reviewed)     (Audited)
                                Rm           Rm           Rm         Rm             Rm            Rm          Rm          Rm           Rm           Rm           Rm            Rm
Nedbank Corporate and  
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   
Business 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 for Nedbank Group    866 624      783 792      809 313    794 050        716 714       738 402      19 818      18 410       38 767        5 323        4 599         9 880
Fellow-subsidiary    
adjustments               (64 402)     (57 468)     (55 869)   (49 003)       (42 656)      (40 938)     (2 676)     (2 387)       (5 296)     (1 302)        (700)       (1 803)
Total                      802 222      726 324      753 444    745 047        674 058       697 464      17 142      16 023        33 471       4 021        3 899         8 077

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

Contingent liabilities and undrawn facilities

                                                    30 June 2015   30 June 2014    31 December 2014
                                                      (Reviewed)     (Reviewed)           (Audited)
                                                              Rm             Rm                  Rm
Guarantees on behalf of clients                           24 647         36 094              22 807
Letters of credit and discounting transactions             3 276          3 357               3 248
Irrevocable unutilised facilities and other              108 207         97 055             102 968
                                                         136 130        136 506             129 023

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 Ltd and its subsidiary companies, the outcome of which cannot be foreseen at present.

Commitments

Capital expenditure approved by directors

                                                    30 June 2015   30 June 2014    31 December 2014
                                                      (Reviewed)     (Reviewed)           (Audited)
                                                              Rm             Rm                  Rm
Contracted                                                 1 596            210               1 292
Not yet contracted                                         1 238          1 352               1 278
                                                           2 834          1 562               2 570

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

Sponsors: Investec Bank Limited, Nedbank Capital 
Date: 04/08/2015 08:01:00 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.

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