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NEDBANK GROUP LIMITED - Condensed consolidated interim financial results for the six months ended 30 June 2016

Release Date: 01/08/2016 08:00
Code(s): NED     PDF:  
Wrap Text
Condensed consolidated interim financial results for the six months ended 30 June 2016

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")

NEDBANK GROUP – CONDENSED CONSOLIDATED INTERIM FINANCIAL RESULTS 2016

COMMENTARY

NEDBANK GROUP LTD

Condensed consolidated interim financial results for the six months ended 30
June 2016

- Headline earnings growth of 2,0% – excluding ETI, headline earnings growth was
  20,1%
- Diluted headline earnings per share increased 1,6% to 1 119 cents – excluding
  ETI, diluted headline earnings per share grew 19,7%
- Ongoing selective origination and strong collections focus leading to a high-
  quality advances book and credit losses remaining below expectations at 67bps
- Return on equity (excluding goodwill) of 15,7% and 18,4%, excluding ETI
- Common-equity tier 1 ratio increased to 11,6%
- Net asset value per share up by 9,7%
- Interim dividend per share up 6,1% to 570 cents

'Nedbank Group's managed operations, excluding Ecobank Transnational
Incorporated (ETI), produced a very strong performance for the first six months of the
year. Headline earnings growth was underpinned by strong revenue generation and
an improved credit loss ratio of 67 basis points, while strengthening our portfolio
impairment coverage ratios.

Our focus on growing our transactional banking franchise continues to unlock
benefits. The integration of our CIB Cluster last year resulted in an enhanced client
offering, which increased cross-sell activities. Our RBB Cluster made good progress
in gaining clients through its innovative digital and other offerings, resulting in an
increase of 7,3% in main-banked clients and an increase in the ROE from 15,9% to
18,3%. Our Wealth Cluster grew earnings strongly, with good performances from
Private Wealth, Asset Management and Insurance.

Strong growth from our managed operations in SA was offset by a weak performance
in the Rest of Africa and, in particular, the impact of equity accounting in Nedbank's
first quarter (Q1) 2016 associate income for our share of ETI's loss in its fourth
quarter (Q4) 2015, as we have already reported on in our Q1 2016 performance
update in May. ETI continues to navigate a difficult operating environment, and
following its comprehensive review of processes and portfolios, which led to elevated
impairment charges in Q4 2015, ETI has produced a much-improved performance in
Q1. We believe in the long-term growth potential of the Rest of Africa and remain
supportive of ETI's management and board in their strategy to enhance the focus of
the business on delivering an ROE ahead of its COE.

Our guidance for organic growth in diluted headline earnings per share for 2016
remains unchanged. We continue to expect positive growth in this metric, albeit that
in the current economic environment this is expected to be lower than the growth we
achieved in 2015 and below our medium-to-long-term target of the consumer price
index plus GDP growth plus 5%.'

Mike Brown
Chief Executive

Banking and economic environment
The global economic environment remains under pressure. Expectations earlier in
the year of an economic recovery and interest rate normalisation in the US have
softened. The UK's vote to leave the European Union (EU) has triggered increased
volatility across markets and added further uncertainty to a fragile economic
environment in the UK and Eurozone. These factors have led to the International
Monetary Fund (IMF) downgrading its 2016 global real gross domestic product (GDP)
growth forecast to 3,1% from 3,8% a year ago. Given continued economic pressures
in developed economies and low economic growth in China, there remains downside
risk for commodity-driven economies, although prices have stabilised since the
beginning of the year. The IMF has also downgraded the GDP growth forecast for the
sub-Saharan Africa region to 1,6%, from 5,1% in July 2015.

The South African economy deteriorated in 2016 off an already low 2015 base. The
GDP contraction of 1,2% in the first quarter of 2016 was largely driven by the sharp
declines in mining and agriculture output, as well as lower export levels despite the
weak rand. Lower levels of consumer spending and private sector fixed investment in
addition to rising inflation further contributed to the economic slowdown.

The reaffirmation of SA's sovereign risk ratings at an investment grade of Baa2 by
Moody's Investor Service and BBB- by Standard and Poor's was a positive outcome
of the work done by government, business and labour in the first six months of the
year. Both rating agencies maintained a negative outlook, reflecting the potential
adverse consequences of low GDP growth and signalling that SA ratings could be
lowered if policy measures are not instituted to be more supportive of inclusive
growth. Fitch's rating, although revised down to BBB- from BBB with a stable outlook,
also remained above investment grade. These ratings acknowledge the fiscal
consolidation achieved; the 2016/17 budget and medium-term plan to reduce
government debt; the underlying strength of SA's institutions; as well as the structural
and legislative reforms that the SA government, businesses and labour have been
working on together to restore confidence in the country to encourage private sector
investment and higher levels of inclusive growth in the economy. Evidence of delivery
on these plans will be needed before December 2016 to prevent any downgrade at
the next round of ratings reviews.

Review of results
Nedbank Group produced headline earnings of R5 427m(1), an increase of 2,0%(1) for
the six months ended 30 June 2016 ('the period'). This earnings growth was
underpinned by strong net interest income (NII) and non-interest revenue (NIR)
growth, as well as impairments remaining below the midpoint of our through-the-
cycle target range.

Headline earnings includes a loss in associate income of R446m(1) (June 2015:
R426m profit) relating to our 21,8%(1) share of the Q4 2015 loss of USD199m and
Q1 2016 profit of USD71m in ETI. Associate income from ETI is equity-accounted
one quarter in arrear using ETI's publicly disclosed results. Excluding both the loss in
associate income of R446m(1) and funding costs of R157m relating to ETI, headline
earnings from Nedbank Group’s managed operations for the period grew strongly by
20,1% to R6 030m.

Diluted headline earnings per share (DHEPS) increased 1,6%(1) to 1 119 cents(1) (June
2015: 1 101 cents) and headline earnings per share (HEPS) grew by 0,6%(1) to 1 135
cents(1) (June 2015: 1 128 cents). Excluding ETI, DHEPS was up 19,7% and HEPS
was up 18,7%.

Return on average ordinary shareholders' equity (ROE), excluding goodwill, of 15,7%
(June 2015: 17,3%) and ROE of 14,6% (June 2015: 16,0%), reflect a lower return on
assets (ROA) of 1,19% (June 2015: 1,28%) resulting from the above loss in equity-
accounted earnings from ETI. Excluding ETI, the ROA was 1,32%. Our economic
profit decreased to R408m (June 2015: R1 328m), largely as a function of the impact
of ETI and the group's cost of equity (COE) increasing to 14,4% (monthly average for
the period) from 13,0%. This follows the increase in the SA long-bond yield earlier in
the year. In more recent months the SA long-bond rate and our COE have decreased
from their peak in December 2015.

Our Basel III common-equity tier 1 (CET1) ratio improved to 11,6% (December 2015:
11,3%) and remained within our Basel III 2019 internal target range, reflecting a well-
capitalised balance sheet. Our liquidity coverage ratio (LCR) of 93,1% for the second
quarter of 2016 (December 2015: 88,5%) is above the regulatory requirements of
70% for 2016 and incorporates an appropriately sized buffer for volatility in this ratio.
The group's portfolio of high-quality liquid assets (HQLA) and other sources of quick
liquidity amounted to R167,7bn (December 2015: R160,7bn).

Delivering sustainably to all our stakeholders in the period
Nedbank Group is committed to 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 – creating 1 176 new permanent-employment opportunities, mainly in our
regulatory change programme support areas and in the Rest of Africa; investing
R127m in training, with more than 3 739 staff participating in learning interventions;
and supporting 61 external bursars across 15 universities and 413 learners across
our learnership programmes during the period. Nedbank's leading position as a top
empowerment company in the financial services sector and a leader of
transformational change in SA was recognised at the 15th annual Oliver
Empowerment Awards where we were honoured as Legend of Empowerment and
Transformation.

For clients – providing innovative offerings and improving client access by rolling out
an additional 93 Intelligent Depositor ATMs and 8 060 new point-of-sale devices, and
converting a further 75 branches to smaller and more digitally focused branches of
the future since June 2015. Retail main-banked clients increased 7,3% and digitally
enabled clients by 26%, with digitally active clients increasing by 29% and driving up
the value of Nedbank App Suite™ transactions by 58,0% to R10,5bn. IT system
stability was maintained at exceptionally high levels, with no major severity incidents.
In June 2016 we processed 1,4bn transactions, our highest ever in a single month in
the first half of the year. We advanced R74,8bn (June 2015: R88,5bn) of new loans
to clients. Assets under management grew by 9,8%(1) to R256,3bn(1) (June 2015:
R233,5bn) as Nedgroup Investments continued to deliver excellent investment
performance, remaining among the top three in the quarterly PlexCrown Unit Trust
Survey over seven years, including maintaining our top position in the offshore
category and achieving second place in the domestic category. In addition, Nedbank
Private Wealth ranked third overall in the 2016 SA's Top Private Banks and Wealth
Managers Survey and achieved first place in the entrepreneur category.

For shareholders – growing net asset value per share by 9,7%(1) to 15 826 cents(1)
(June 2015: 14 428 cents); delivering EP of R408m; and increasing the interim
dividend by 6,1%. Engaging constructively with shareholders during our third annual
governance roadshow, resulting in all resolutions being passed with more than
90% votes of approval at our 49th annual general meeting. Ensuring transparent,
relevant and timeous reporting, and disclosure to shareholders as acknowledged by
Nedbank's ranking in the top quartile of JSE-listed companies by Nkonki and
Chartered Secretaries.

For regulators – maintaining full compliance with Basel III phase-in requirements,
achieving an improved CET1 ratio of 11,6%, an average long-term funding ratio of
30,9% and an average LCR ratio of 93,1% in the second quarter; making cash
taxation contributions of R4,6bn relating to direct, indirect, pay-as-you-earn and other
taxation; maintaining transparent relationships and working closely with all regulators
to ensure efficient delivery of the various regulatory programmes and achieving anti-
money-laundering remediation of high-risk clients by the planned due dates.

For communities – supporting local businesses and the SA economy, purchasing
76% of our procurement spend locally and winning the Best Supplier and Enterprise
Development Project Award in recognition of our support of local small and medium
enterprises (SMEs). Advancing R27,6bn in new loans to retail clients, contributing
R564m to socioeconomic development since 2011 and investing R100m over three
years with our black business partners, Wiphold, Brimstone and Izingwe, in initiatives
aligned with the Financial Sector Code and National Development Plan, seeking to
create sustainable, self-funding opportunities. Our Fair Share 2030 strategy enabled
more than R1bn of new lending to support student accommodation and embedded
energy in the commercial and farming sectors. This is in addition to our investment in
sustainable development such as renewable-energy lending and support for green
buildings. We have committed R35bn towards renewable-energy deals, of which
R11,4bn has been disbursed to date. Our pipeline for the funding of green buildings
continues to grow with more than R5bn committed over the next two years. We have
maintained our level 2 broad-based black economic empowerment (BBBEE)
contributor status for the seventh consecutive year.

Cluster financial performance
Our Corporate Investment Banking (CIB), Retail and Business Banking (RBB) and
Wealth Clusters generated headline earnings growth of 16,6%(1) to R5 989m(1) (June
2015: R5 136m) and delivered an ROE of 20,8%. Rest of Africa's headline earnings
was impacted by our 21,8%(1) share of the Q4 2015 losses in ETI.

                                  Headline             
                     % change      earnings            ROE
                                    (Rm)              (%)
                                 June    June    June     June
                                 2016    2015    2016     2015
CIB                      20,9   3 004   2 485    21,3     22,9
RBB                      11,2   2 371   2 132    18,3     15,9
Wealth                   18,3     614     519    35,9     38,9
Rest of Africa      > (100,0)   (550)     344  (15,2)     15,3
Business clusters       (0,7)   5 439   5 480    16,8     19,7
Centre                   92,4    (12)   (157)
Total                     2,0   5 427   5 323    14,6     16,0

Nedbank CIB's integrated franchise achieved excellent headline earnings growth of
20,9%(1), driven by good cross-sell and client flows, particularly in the global markets
business. This was reflected in robust revenue growth as well as in an improvement
in impairments.

Nedbank RBB generated strong earnings growth and an ongoing ROE improvement
to 18,3%, now well in excess of the group's COE of 14,4%. This was underpinned by
strong NII and NIR growth and a strong performance in credit risk management and
collections while increasing portfolio provisions.

Nedbank Wealth produced good earnings growth at an attractive ROE. These results
were underpinned by strong balance sheet growth and continued low levels of
impairments in Wealth Management. Despite market volatility, assets under
management increased 9,8%(1). Higher sales of single-premium investment products
supported Insurance earnings growth.

Rest of Africa's earnings were largely impacted by our 21,8%(1) share of the Q4 2015
losses in ETI that amounted to R676m, reflected as a loss in associate income. Our
subsidiaries in the Southern African Development Community (SADC) grew headline
earnings by 32,5% to R53m (June 2015: R40m) off a low base, mostly from lower
head office costs and improved impairments, offset by lower transactional volumes
and continued investment in staff, systems, distribution channels and regulatory
compliance.

The decrease in losses in the Centre was largely due to a portfolio impairment
reversal of R150m(1) and changes in internal capital allocation.

Financial performance

Net interest income
Strong NII growth of 11,6%(1) to R13 028m(1) (June 2015: R11 675m) was underpinned
by growth in average interest-earning banking assets of 10,9% and slight net interest
margin (NIM) expansion to 3,37% (June 2015: 3,36%). In December the NIM was
3,30%.

The NIM improved 21 basis points (bps) from the combined benefit of endowment
income of 15 bps, as average interest rates increased by 107 bps during the period,
and improved asset pricing of 6 bps. This was partially offset by margin compression
of 21 bps, comprised of an advances mix change of 13 bps as lower-margin
wholesale advances continued to grow faster than higher-margin retail advances;
and a further compression of 8 bps due to Basel III compliance costs related to
higher funding costs for transitioning to net stable funding ratio (NSFR) requirements
and holding higher levels of low-yielding HQLA for increasing LCR requirements.

Impairments charge on loans and advances
Impairments declined 4,2%(1) to R2 211m(1) (June 2015: R2 307m) and the credit loss
ratio (CLR) improved to 0,67% (June 2015: 0,77%) due to a lower specific
impairments charge of 0,64% (June 2015: 0,73%) while the portfolio impairments
charge for the period remained similar at 0,03% (June 2015: 0,04%).

The CLR includes the release of R150m(1) from central provisions raised in the second
half of 2015. Excluding this release, the CLR was 0,72%. The improvement in CIB's
impairments was driven by a combination of oil and commodity prices stabilising at
higher levels, as well as the successful settlement or restructuring of certain counters
during the period. RBB's CLR remained below the lower end of its target range due
to reduced impairments in Personal Loans and in Business Banking. Postwriteoff
recoveries increased to R564m (June 2015: R520m), of which R196m (June 2015:
R196m) was attributable to Personal Loans.

CLR (%)                %    June   June    Dec      Through-
                  banking   2016   2015   2015     the-cycle
                 advances                             target
                                                      ranges
CIB                  49,0   0,31   0,38   0,40   0,15 – 0,45
RBB                  43,8   1,23   1,22   1,14   1,30 – 1,80
Wealth                4,5   0,16   0,18   0,15   0,20 – 0,40
Rest of Africa        2,5   0,76   0,86   1,25   0,75 – 1,00
Group                       0,67   0,77   0,77   0,60 – 1,00

Total defaulted advances increased to R18 437m (June 2015: R16 695m),
representing 2,6% of advances (June 2015: 2,5%). The increase was largely as a
result of certain wholesale counters within the stressed sectors of the economy and
the seasonal effects in Home Loans, MFC and Card. South African Reserve Bank
(SARB) directive 7/15, which was implemented in the second half of 2015 and
requires that distressed restructures be classified as defaulted advances for a
minimum period of six months after being restructured, contributed to the increase in
defaulted advances. Excluding the effect of directive 7/15, defaulted advances were
R15 397m.

The total coverage ratio decreased to 62,6% (June 2015: 65,9%), driven by a lower
specific coverage of 36,2% (June 2015: 39,6%) largely as a result of the impact of
directive 7/15 and partial writeoffs in CIB as well as the abovementioned
improvement in impairments. CIB-specific coverage is determined on a deal-by-deal
basis. Wholesale advances are generally secured with collateral and we hold deep
security pools against our commercial property finance portfolio, resulting in relatively
lower-loss expectations in the event of default and, accordingly, lower specific
impairments and coverage levels.

The portfolio coverage ratio increased to 0,71% (June 2015: 0,68%). Additional
overlays in Retail increased to R701m (June 2015: R441m) and central portfolio
provisions were R350m (June 2015: R350m) to take account of risks, including in
commodities and in the rest of Africa, that have been incurred but have not yet
emerged. In December 2015 our overlays were at R699m in RBB and the central
portfolio provisions were R500m.

Non-interest revenue
NIR grew 8,7%(1) to R11 357m(1) (June 2015: R10 450m), primarily driven by:
- Commission and fee income growth of 9,1% to R8 185m (June 2015: R7 499m),
  supported by quality-client gains, an increased focus on cross-sell leading to
  good main-banked client conversion, together with below-inflation annual fee
  increases in RBB in January 2016.
- Insurance income increasing 12,9% to R921m (June 2015: R816m), led by good
  growth in single-premium income, partly offset by higher weather-related claims.
- Trading income growth of 5,0% to R1 771m (June 2015: R1 686m) off a high
  2015 base, following increased market volatility and improved cross-sell in CIB.
- Private-equity income increasing to R432m (June 2015: R250m), largely from
  property private equity gains, the majority of which were realised.

Expenses
Expenses continue to be managed within expectations and increased 8,8%(1) to
R13 686m(1) (June 2015: R12 578m), mainly as a result of -
-  Staff-related costs increasing 7,5%, consisting of -
   -  8,8% growth in remuneration and other staff costs, driven by a 6,3% average
      annual salary increase and additional staff hires, mainly for regulatory change
      programmes; and
   -  a 1,7% combined increase in short-term and long-term incentives, aligned
      with the group's performance.
-   Computer processing costs up 18,8% to R1 985m, including amortisation costs
    increasing 11,1% to R400m following the capitalisation of equipment for
    distribution and reformatting of branches and an increase in IT project costs.
-   Fees and insurance costs being 11,2% higher at R1 381m following increased
    volumes of revenue-generating activities such as cash handling and card issuing
    and acquiring.
-   Occupation and accommodation costs growing 8,1% to R1 098m relating to
    regional consolidation and ongoing investment in distribution.

The group's growth in operating income of 11,9%(1) exceeded growth in expenses.
However, including the loss from ETI in associate income, the jaws ratio was -2,6%(1)
(June 2015: 1,3%). Excluding ETI, the jaws ratio was 1,6%. The efficiency ratio
increased to 57,1%(1) (June 2015: 55,8%) and, excluding ETI, this metric improved to
55,6% (June 2015: 56,4%).

Associate income
Associate income declined to a negative R431m(1) (June 2015: R436m profit). This
mainly comprised the equity accounting of our 21,8% share of ETI's Q4 2015 loss of
R676m and Q1 2016 profit of R230m, in line with our policy of accounting for ETI
earnings a quarter in arrear. The total headline earnings impact of ETI in the period
was a negative R603m, including the R157m impact of funding costs, offset by
endowment on allocated capital.

Statement of financial position
Capital
The group remains strongly capitalised and operates well within our Basel III 2019
capital adequacy targets. The CET1 ratio improved to 11,6% from the 11,3%
reported at the 2015 year-end, largely due to lower credit risk-weighted assets
(RWA). This resulted from improved credit parameters across certain wholesale
portfolios and RWA optimisation initiatives within certain retail portfolios.

Our tier 1 and total capital ratios further reflect the effects of the issuance of a new-
style (Basel III-compliant) additional tier 1 capital instrument of R1,5bn in May 2016,
in line with the group's capital plan.

Basel III          June    December      June       Internal   Regulatory
(%)                2016        2015      2015   target range   minimum(2)
CET1 ratio         11,6        11,3      11,4    10,5 – 12,5        6,875
Tier 1 ratio       12,5        12,0      12,1    11,5 – 13,0        8,375
Total              14,5        14,1      14,5    14,0 – 15,0       10,375
capital ratio

(Ratios calculated include unappropriated profits.)

(2) The Basel III regulatory requirements are being phased in between 2013 and 2019,
    and exclude any idiosyncratic or systematically important bank minimum
    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 was consistently below 100% and a
low reliance on interbank and foreign-currency funding.

At June 2016 the group's quarterly average LCR of 93,1% (December 2015: 88,5%)
exceeded the minimum regulatory requirement of 70%, as a buffer of a minimum of
10,0% is maintained to ensure daily compliance given the volatility of flows. The
group will continue to position proactively for the phase-in period as the LCR
requirement increases by 10% per annum to 100% by 1 January 2019.

                                    June    December      June
 Nedbank Group Ltd LCR              2016        2015      2015
 HQLA (Rm)                       127 114     117 997   109 060
 Net cash outflows (Rm)          136 469     133 272   143 029
 Liquidity coverage ratio (%)(3)    93,1        88,5      76,3
 Regulatory minimum (%)             70,0        60,0      60,0

(3) Average for the quarter.

Further details on the LCR are available in the table section of the Securities
Exchange News Service (SENS) announcement.

Nedbank's portfolio of LCR-compliant HQLA increased to R127,1bn (December
2015: quarterly average R118,0bn). Together with our portfolio of quick-liquidity
sources, the total available quick liquidity amounted to R167,7bn (December 2015:
R160,7bn), representing 17,8% of total assets.

We also maintained a strong, well-diversified funding profile. Our three-month
average long-term funding ratio of 30,9% for the second quarter of 2016 (December
2015: quarterly average of 28,7%) represents a slightly more conservative funding
profile than the last reported industry average. The strong funding profile was
supported by growth in Nedbank Retail Savings Bonds of R2,0bn to R16,4bn and
Nedbank having successfully issued R8,8bn in senior unsecured debt in the first half
of 2016.

Following the finalisation of the NSFR calibration in October 2014, the SARB
released a directive on 18 November 2015 increasing the available stable funding
factor applicable to wholesale deposits in the 0-to-6-month bucket from 0% to 35% to
better reflect the stability of these deposits in the SA context. This directive positions
all SA banks favourably to achieve NSFR compliance from the effective date of 1
January 2018.

Loans and advances
Loans and advances increased by 6,9%(1) to R693,3bn(1) (June 2015: R648,8bn),
largely underpinned by growth in banking advances of 8,6%.

Loans and advances by cluster are as follows:

                      % change       June      June
Rm                                   2016      2015
CIB                        8,4    359 041   331 069
 Banking activities       11,2    325 258   292 457
 Trading activities     (12,5)     33 783    38 612
RBB                        3,5    284 617   275 079

Wealth                    11,3     29 677    26 652
Rest of Africa            14,8     18 199    15 849
Centre                 > 100,0      1 798       195
Group                      6,9    693 332   648 844

Advances growth in CIB was mostly from term loans increasing 12,5% and
commercial-mortgage advances growing 9,7%. This was led by the drawdown on
existing deals in investment banking and commercial property finance. The decline in
trading advances relates to a decrease in USD-denominated loans during the period.

Growth in RBB's advances was led by the increase of 7,2% in MFC and of 3,8% in
Personal Loans, while Card grew 2,8%. Home Loans increased by 2,1%, with growth
in new-asset payouts partially offset by the rolloff of the backbook. Since December
2015 total loans and advances have grown by an annualised 3,5%

Deposits
Deposits grew 7,4%(1) to R741,7bn(1) (June 2015: R690,5bn), underpinned by deposit
growth in RBB of 12,2% to R256,7bn. The loan-to-deposit ratio improved to 93,5%
(December 2015: 93,9%).

Increasing household and commercial liabilities remains a priority for the group.
Our strategy of growing our transactional banking franchise continued to gain traction,
as reflected in our household deposit market share increasing to 18,7% in May 2016,
from 18,4% in December 2015, supported by market share gains in current accounts
to 19,0% in May 2016 (June 2015: 18,0%). Our current accounts increased 8,4% and
savings accounts by 19,4%, and cash management deposits grew 6,2%. Since
December 2015 total deposits grew by an annualised 4,4%.

Group strategic focus
Good progress continued to be made in our current five key strategic focus areas,
positioning us well in the tough macroeconomic environment:

-   Client-centred innovation: We are in the process of delivering a new digital
    platform with a user-centred design approach that focuses on creating a leading
    digital client experience. We launched the competitive Nedbank Pay-as-you-use
    Account and MyPocket, a savings pocket linked to transactional accounts and
    providing immediate access to cash. We also deployed LOTTO Plus on
    nedbank.co.za and implemented standalone prepaids for airtime, SMS bundles,
    data bundles and prepaid electricity. A cash advance solution, Nedbank GAP
    Access™, was launched, allowing merchants to grow their business off the back
    of their transactional flows. In addition, Nedbank Card and Payments is rolling out
    mobile payment solutions to consumers in partnership with MasterCard®, using
    the innovative MasterPass™ mobile payments platform. In 2016 we issued our
    contactless cards, which incorporate tap-and-go card acceptances and
    transaction banking. Digitally enabled retail clients increased 26% and digitally
    active clients increased 29%, which drove up the value of Nedbank App Suite™
    transactions by 58% to R10,5bn. Client satisfaction levels of our banking app
    increased to 81,3%. The app is now ranked second in the market in the annual
    South African Customer Satisfaction Index for 2015, which is compiled by
    Consulta. To date we have converted 272 outlets, to branches of the future,
    representing 39% of the total and plan to have 56% of all outlets converted by
    2017. These outlets are smaller and more effective than traditional branches.

-   Growing our transactional banking franchise: Nedbank's retail franchise
    attracted 7,3% additional main-banked clients, increasing to a total of 2,7m and
    translating into 9,4% retail transactional NIR growth. Altogether 71,6% of the
    retail main-banked client base have more than two other products (up from 70,9%
    in the prior year). Our transactional banking progress was reflected in market
    share gains in household and transactional deposits to 18,7% and 21,9%
    respectively. Our brand value and client relationships strengthened further, as
    reflected in the Nedbank Brand Tracker results, the Consulta annual retail
    reputational Net Promotor Score (NPS), which improved to 21%, and our South
    African Customer Satisfaction Index score, which increased to 74%. We
    continued to maintain high levels of full-service recovery and remain ranked first
    among the banks in respect of the hellopeter.com index.

-   Optimise and invest: Cost discipline remains an imperative, with ongoing
    initiatives such as our strategy to decrease the number of core systems from
    250 to 60, of which 84 have been decommissioned to date and a further six are
    targeted for 2016; the elimination of duplicative processes; the reduction in the
    cost to serve and acquire clients; as well as the reduction of our branch space by
    25 000 m2, of which 15 965 m2 has already been saved. We relocated and
    consolidated offices, with approximately 6 000 employees relocated on
    completion of the Newtown and Lakeview Campuses in Johannesburg. This
    saved 10 000 m² of space, reducing our office vacancy ratio to worldclass levels
    of below 4%. Efficiencies continued to be generated from the integration within
    RBB and CIB. We remain on track for delivery by the Old Mutual Group of the full
    target of R1bn of pretax run rate synergies in 2017, of which approximately 30%
    should accrue to Nedbank.

-   Strategic portfolio tilt: We maintained our focus on growing activities that
    generate EP, such as transactional deposits with current and savings accounts
    up 11,6%, transactional banking activity with commission and fees up 9,1%, and
    earnings growth of 20,9% in CIB and 18,3% in Nedbank Wealth. Our selective
    origination of personal loans, home loans and commercial property finance has
    proactively limited downside risk in this challenging operating climate, enabling a
    CLR of 67 bps, below the midpoint of our through-the-cycle range. At the same
    time our balance sheet metrics remain strong and we continue to deliver dividend
    growth.

-   Pan-African banking network: The macroeconomic environment in the rest of
    Africa remains challenging due to slowing economic growth, foreign exchange
    and liquidity shortages, and increasing regulatory pressure across a number of
    jurisdictions.
    -    In Central and West Africa, since the establishment of our alliance with
         Ecobank, 183 accounts have been opened in 24 countries for 76 of our
         wholesale clients that bank with Ecobank. We work closely with Ecobank on
         joint pipeline deals in the power and infrastructure sectors, and opportunities
         in trade and commodity finance. At 30 June 2016 the carrying value of our
         long-term strategic investment in ETI was R6,0bn(1) and the market value
         based on ETI's share price, albeit in largely illiquid markets, was R4,3bn.
         A value-in-use test was performed to assess the carrying value for
         impairment. The value in use, while having decreased from December 2015,
         still exceeds the carrying value, and as a result there was no requirement to
         impair our investment. We will continue to assess the indicators of
         impairment in future reporting periods. In the event of an impairment this
         would fall outside of headline earnings and have an immaterial impact on
         regulatory capital.

    -    In SADC and East Africa we successfully implemented our Flexcube core
         banking system in Namibia and Swaziland, and we continued to launch new
         products and grow our distribution footprint. Our shareholding in Banco
         Único will be increased by 11% to 50% plus one share during the second
         half of 2016 to progress the transaction consummated in 2014. This will cost
         approximately R112m.

    Despite these macroeconomic challenges, we believe in the long-term growth
    potential of Africa and we remain confident of our strategy and investments in
    the rest of Africa. We continue to support ETI as our partner in Central and West
    Africa. ETI is a strategic investment for the group, providing our clients with a
    pan-African transactional banking network across 39 countries. Our expectation
    is that ETI will generate an ROE in excess of its COE in the medium-to-long-
    term, and our 21,8%(1) shareholding continues to offer our shareholders the
    opportunity to participate in this growth over time.

Old Mutual plc managed separation
A further update on the managed separation was provided on 28 June 2016, with
Old Mutual plc (OM) stating that, following the creation of a new SA holding
company, it intends to distribute, in an orderly manner, a significant proportion of the
group's shareholding in Nedbank to the shareholders on the register of the new SA
holding company at that time, leaving Old Mutual Emerging Markets (OMEM) as the
principal business in the group. Through its ownership of Old Mutual Life Assurance
Company South Africa the new SA group will retain an appropriate strategic minority
stake in Nedbank, with the exact level still to be determined together with Nedbank
based on OMEM's commercial relationship with Nedbank and influenced by the
implications of the incoming Twin Peaks regulation. The boards of directors and
management teams of OM and Nedbank continue to work closely together on the
managed separation. Shareholders are referred to the OM and Nedbank Group
SENS announcements released on 28 June 2016 for further details on the managed
separation.

Economic outlook
The local economy is expected to remain under pressure for the remainder of 2016.
Rising domestic inflation and the increase in interest rates earlier this year are
expected to contain consumer spending. The global economy is also likely to remain
generally unsupportive of growth, complicated further by the UK's vote to leave the
EU and growing tensions in some key emerging economies. Given the sharper-than-
expected decline in SA's GDP in the first quarter, stronger and more consistent
growth is needed over the next three quarters to produce a favourable outcome for
2016. The SA economy is currently expected to contract by 0,1% in 2016 with risk
remaining to the downside.

Interest rates are currently anticipated to increase by a further 25 bps, compared with
earlier projections of a further 50 bps increase, resulting in a cumulative 100 bps
increase for 2016. This is largely due to expectations that global uncertainties
following the 'Brexit' vote will lead to a delay in the normalisation of US monetary
policy, that core inflation in SA will breach 6% only in the fourth quarter of 2016, that
SA's investment grade ratings in the June reviews will be maintained, and that the
rand will be steadier, boosted by the global search for yield.

Corporate credit demand will continue to be affected by softer global demand, weak
commodity prices, rising domestic production costs and limited infrastructure,
offsetting the competitive benefit of a weaker rand. Restructuring is anticipated to
continue as a result, with lower capital expenditure and retrenchments taking place in
the private sector.

Consequently, household credit demand will remain weak, impacted by the weak job
market, softer income growth and increasing levels of consumer indebtedness due to
rising cost pressures from food inflation and higher fuel prices contributing to rising
debt service costs.

Consumption expenditure by general government will be boosted by election-related
spending in the short term and public sector investment in infrastructure and
development projects in the medium term.

Prospects
Our guidance on financial performance for the full year is now as follows:
-   Average advances to grow at mid-to-upper single digits.
-   NIM to be slightly above the 2015 level of 3,30%.
-   CLR to be below the midpoint of our target range of 60 bps to 100 bps.
-   NIR (excluding fair-value adjustments) to grow above mid-single digits.
-   Expenses to increase by mid-to-upper single digits.

Our financial guidance for organic growth in diluted HEPS in 2016 and our medium-
to-long-term targets remain unchanged. We expect growth in diluted HEPS in 2016
to be positive, but lower than the growth achieved in 2015 and below our medium-to-
long-term target of consumer price index plus GDP growth plus 5%. The outlook for
our medium-to-long-term targets in 2016 is as follows:

                     June 2016                                  Medium-to-long-term
Metric              performance      2016 full-year outlook           targets
                                                            
ROE (excluding                                                    5% above cost of
goodwill)             15,7%              Below target           ordinary shareholders'
                                                                        equity1
                                                                 
Growth in diluted                      Positive but below         > - consumer price
HEPS                  1,6%(1)      2015 growth and target        index + GDP growth +
                                                                          5%
                                                                          
                                        Below midpoint           Between 0,6% and                                       
CLR                   0,67%             of target range           1,0% of average                                        
                                                                  banking advances

NIR-to-expense
ratio                 83,0%(1)             Below target                   > 85%

Efficiency ratio
(including            57,1%(1)             Above target              50,0% to 53,0%
associate income)

CET1 capital
adequacy ratio        11,6%           Within target range          10,5% to 12,5%
(Basel III)

                       Internal Capital Adequacy Assessment Process (ICAAP):
Economic capital            A debt rating (including 10% capital buffer)
                               
Dividend cover       1,99 times       Within target range         1,75 to 2,25 times

(4) The COE is 14,4%, calculated on a monthly average for the period.

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 and group executive changes
Following his retirement from Old Mutual plc, Paul Hanratty stepped down as a non-
executive director of Nedbank Group and Nedbank on 12 March 2016. Errol Kruger
was appointed as an independent non-executive director of Nedbank Group and
Nedbank with effect from 1 August 2016.

Ciko Thomas, who has been a part of the RBB leadership team and the Group
Executive Committee for the past six years, was appointed as Managing Executive of
Nedbank RBB with effect from 1 April 2016 following the early retirement of Philip
Wessels, as was previously announced on 1 March 2016.

Accounting policies(1)
Nedbank Group Ltd is a company domiciled in SA. The reviewed condensed
consolidated interim financial results of the group at and for the period ended 30
June 2016 comprise the company and its subsidiaries (the 'group') and the group's
interests in associates and joint arrangements.

The condensed consolidated interim financial results contained in the SENS
announcement have been extracted from the reviewed condensed consolidated
interim financial statements, which have been prepared in accordance with the
provisions of the JSE Ltd Listings Requirements for interim reports. The condensed
consolidated interim financial statements comprise the condensed consolidated
statement of financial position at 30 June 2016, condensed consolidated statement of
comprehensive income, condensed consolidated statement of changes in equity and
condensed consolidated statement of cashflows for the period then ended and
selected explanatory notes, which are indicated by the following symbol(1).

The JSE Ltd Listings Requirements require interim reports to be prepared in
accordance with and containing the information required by International Financial
Reporting Standards, international accounting standard 34: Interim Financial
Reporting, the 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 SA.
The accounting policies applied in the preparation of the reviewed condensed
consolidated interim financial statements are in terms of the International Financial
Reporting Standards and are consistent with the accounting policies that were
applied in the preparation of the previous consolidated financial statements.

The condensed consolidated interim financial results have been prepared under the
supervision of Raisibe Morathi CA (SA), the Chief Financial Officer. 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 statements for
inclusion in the 2016 interim results booklet and SENS announcement.

Events after the reporting period(1)
Following our reporting date on 30 June 2016, the Nigerian naira continued to
depreciate against the dollar and the market value of the group's investment in ETI
based on its quoted share price in a thinly-traded market has decreased further.
These events are not indicative of conditions that existed at our reporting date on 30
June 2016. The group will continue to monitor developments and their possible
impact on the value in use of our ETI investment and any possible impairment to our
carrying value in the second half of 2016.

Reviewed condensed consolidated interim financial statements – independent
auditors' conclusion
The condensed consolidated interim financial statements for the period ended 30
June 2016 have been reviewed by KPMG Inc and Deloitte & Touche, who expressed
an unmodified review conclusion thereon.

A copy of the auditors' review report on the condensed consolidated interim financial
statements is available for inspection at the company's registered office, together
with the condensed consolidated interim financial statements identified in the
auditors' review report.

The auditors' review report does not necessarily report on all of the information
contained in the condensed consolidated financial results. Shareholders are
therefore advised that, in order to obtain a full understanding of the nature of the
auditors' engagement, they should obtain a copy of the auditors' review report,
together with the accompanying financial statements from Nedbank Group Ltd's
registered office.

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 570 cents per ordinary share
has been declared, payable to shareholders for the six months ended 30 June 2016.
The dividend has been declared out of income reserves.

The dividend will be subject to a dividend withholding tax rate of 15% (applicable in
SA) or 85,50 cents per ordinary share, resulting in a net dividend of 484,50 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 Ltd's tax reference number is 9375/082/71/7 and the number of
ordinary shares in issue at the date of declaration is 495 865 721.

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

Event                                               Date
Last day to trade (cum dividend)                    Tuesday,6 September 2016
Shares commence trading (ex dividend)               Wednesday,7 September 2016
Record date (date shareholders recorded in books)   Friday, 9 September 2016
Payment date                                        Monday, 12 September 2016

Share certificates may not be dematerialised or rematerialised between Wednesday,
7 September 2016, and Friday, 9 September 2016, both days inclusive.

On Monday, 12 September 2016, 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, 12 September 2016.

The above dates 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

1 August 2016


Financial highlights  
at

                                                                                                     30 Jun        30 Jun       31 Dec
                                                                                                       2016          2015         2015
                                                                           Change                (Reviewed)    (Reviewed)    (Audited)
                                                                                %                        Rm            Rm           Rm

Statistics
Number of shares listed                                                       0,3           m         495,9         494,4        494,4
Number of shares in issue, excluding shares held by group entities            0,5           m         478,3         476,0        476,6
Weighted-average number of shares                                             1,2           m         478,0         472,1        474,2
Diluted weighted-average number of shares                                     0,3           m         485,0         483,5        483,1
Preprovisioning operating profit                                              1,5          Rm         9 593         9 450       19 170
Economic profit(2)                                                         (69,3)          Rm           408         1 328        2 525
Headline earnings per share                                                   0,6       cents         1 135         1 128        2 284
Diluted headline earnings per share                                           1,6       cents         1 119         1 101        2 242
Ordinary dividends declared per share                                         6,1       cents           570           537        1 107
 Interim                                                                      6,1       cents           570           537          537
 Final                                                                                  cents                                      570
Ordinary dividends paid per share                                             0,4       cents           570           568        1 105
Dividend cover                                                                          times          1,99          2,10         2,06
Net asset value per share                                                     9,7       cents        15 826        14 428       15 685
Tangible net asset value per share                                           10,1       cents        13 853        12 587       13 794
Closing share price                                                        (22,9)       cents        18 640        24 180       18 861
Price/earnings ratio                                                               historical           8,2          10,6          8,3
Market capitalisation                                                      (22,7)         Rbn          92,4         119,5         93,2
Number of employees (permanent staff)(2)                                      3,8                    31 915        30 739       31 312
Number of employees (permanent and temporary staff)(2)                        2,8                    32 522        31 405       31 689
Key ratios (%)
Return on ordinary shareholders' equity(2)                                                             14,6          16,0         15,7
ROE, excluding goodwill(2)                                                                             15,7          17,3         17,0
Return on tangible equity(2)                                                                           16,8          18,3         18,1
Return on total assets(2)                                                                              1,19          1,28         1,25
Return on average risk-weighted assets(2)                                                              2,12          2,35         2,30
Net interest income to average interest-earning banking assets(2)                                      3,37          3,36         3,30
Credit loss ratio – banking advances(2)                                                                0,67          0,77         0,77
Gross operating income growth rate less expense growth rate (Jaws ratio)                              (2,6)           1,3          0,6
Non-interest revenue to total operating expenses                                                       83,0          83,1         83,3
Non-interest revenue to total income                                                                   46,6          47,2         47,7
Efficiency ratio (including share of profits of associate companies
and joint arrangements)                                                                                57,1          55,8         56,1
Effective taxation rate                                                                                25,8          24,8         24,0
Group capital adequacy ratios (including unappropriated profits):(2)
– Common-equity tier 1                                                                                 11,6          11,4         11,3
– Tier 1                                                                                               12,5          12,1         12,0
– Total                                                                                                14,5          14,5         14,1
Statement of financial position statistics (Rm)
Total equity attributable to equity holders of the parent                    10,2                    75 697        68 679       74 754
Total equity                                                                 11,5                    80 886        72 574       78 751
Amounts owed to depositors                                                    7,4                   741 712       690 495      725 851
Loans and advances                                                            6,9                   693 332       648 844      681 632
  Gross                                                                       6,8                   704 871       659 848      693 043
  Impairment of loans and advances                                            4,9                  (11 539)      (11 004)     (11 411)
Total assets administered by the group                                        9,1                 1 200 513     1 100 105    1 183 021
  Total assets                                                                9,0                   944 188       866 624      925 726
  Assets under management                                                     9,8                   256 325       233 481      257 295
Life insurance embedded value(2)                                             29,9                     3 110         2 395        2 657
Life insurance value of new business(2)                                      33,3                       172           129          247
Foreign currency conversion rates
UK£ at period end                                                             2,7          R          19,66         19,15        23,16
UK£ average rate                                                             18,2          R          21,56         18,24        19,74
US$ at period end                                                            20,7          R          14,65         12,14        15,62
US$ average rate                                                             27,2          R          15,19         11,94        12,94
NGN:US$ at period end                                                        41,7        NGN         282,07        199,00       199,56
NGN:US$ average rate                                                          8,3        NGN         213,03        196,65       197,87

(2) These metrics have not been reviewed by the group's auditors.

REVIEWED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2016

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the period ended

                                                                                                  30 Jun       30 Jun      31 Dec
                                                                                                    2016         2015        2015
                                                                                     Change   (Reviewed)   (Reviewed)   (Audited)
                                                                                          %           Rm           Rm          Rm
Interest and similar income                                                            16,5       33 212       28 513      60 289
Interest expense and similar charges                                                   19,9       20 184       16 838      36 404
Net interest income                                                                    11,6       13 028       11 675      23 885
Impairments charge on loans and advances                                              (4,2)        2 211        2 307       4 789
Income from lending activities                                                         15,5       10 817        9 368      19 096
Non-interest revenue                                                                    8,7       11 357       10 450      21 748
Operating income                                                                       11,9       22 174       19 818      40 844
Total operating expenses                                                                8,8       13 686       12 578      26 110
Indirect taxation                                                                      42,1          466          328         783
Profit from operations before non-trading and capital items                            16,1        8 022        6 912      13 951
Non-trading and capital items                                                        (20,0)            4            5       (141)
 Net profit/(loss) on sale of investment securities and property and equipment                        38            5        (23)
 Net impairment of investment securities and intangible assets                                      (34)                    (118)
Profit from operations                                                                 16,0        8 026        6 917      13 810
Share of (losses)/profits of associate companies and joint arrangements             < (100)        (431)          436         871
Profit before direct taxation                                                           3,3        7 595        7 353      14 681
Total direct taxation                                                                   6,8        1 944        1 820       3 519
 Direct taxation                                                                                   1 955        1 820       3 550
 Taxation on non-headline earnings items                                                            (11)                     (31)

Profit for the period                                                                   2,1        5 651        5 533      11 162
Other comprehensive (losses)/income net of taxation                                   > 100      (1 956)        (800)       2 149
Items that may subsequently be reclassified to profit or loss
 Exchange differences on translating foreign operations                                          (1 221)          440       3 203
 Share of other comprehensive losses of investments accounted for using the equity
 method                                                                                            (745)       (1 509)    (1 572)
 Fair-value adjustments on available-for-sale assets                                                (38)                      (4)
Items that may not subsequently be reclassified to profit or loss
 Gains on property revaluations                                                                        3            1         167
 Remeasurements on long-term employee benefit assets                                                  58           90         298
 Share of other comprehensive (losses)/income of investments accounted for using 
 the equity method                                                                                  (13)          178          57

Total comprehensive income for the period                                            (21,9)        3 695        4 733      13 311
Profit attributable to:
– Equity holders of the parent                                                          2,1        5 442        5 328      10 721
– Non-controlling interest – ordinary shareholders                                     18,5           32           27          70
– Non-controlling interest – preference shareholders                                  (0,6)          177          178         371
Profit for the period                                                                   2,1        5 651        5 533      11 162
Total comprehensive income attributable to:
– Equity holders of the parent                                                       (22,9)        3 500        4 537      12 820
– Non-controlling interest – ordinary shareholders                                                    18           18         120
– Non-controlling interest – preference shareholders                                  (0,6)          177          178         371
Total comprehensive income for the period                                            (21,9)        3 695        4 733      13 311
Basic earnings per share (cents)                                                        0,8        1 138        1 129       2 261
Diluted earnings per share (cents)                                                      1,8        1 122        1 102       2 219

Headline earnings reconciliation
for the period ended

                                                                       30 Jun                    30 Jun                    31 Dec
                                                          30 Jun         2016       30 Jun         2015       31 Dec         2015
                                                            2016   (Reviewed)         2015   (Reviewed)         2015    (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                                        2,1                   5 442                     5 328                    10 721
Less: Non-headline earnings items                              4           15            5            5        (141)        (110)
 Net profit/(loss) on sale of investment
 securities and property and equipment                        38           49            5            5         (23)         (24)
 Net impairment of investment securities and
 intangible assets                                           (34)        (34)                                  (118)         (86)
Headline earnings                                 2,0                   5 427                     5 323                    10 831

Condensed consolidated statement of financial position
at

                                                                                        30 Jun       30 Jun      31 Dec
                                                                                          2016         2015        2015
                                                                           Change   (Reviewed)   (Reviewed)   (Audited)
                                                                                %           Rm           Rm          Rm
Assets
Cash and cash equivalents                                                  (23,1)       22 232       28 892      22 840
Other short-term securities                                                  24,1       82 033       66 083      75 614
Derivative financial instruments                                             34,5       19 819       14 732      30 488
Government and other securities                                              38,1       51 996       37 649      43 060
Loans and advances                                                            6,9      693 332      648 844     681 632
Other assets                                                                 80,2       11 505        6 386       8 984
Current taxation assets                                                     > 100        1 253          451       1 032
Investment securities                                                      (31,9)       13 254       19 449      13 155
Non-current assets held for sale                                           (76,9)            3           13           2
Investments in private-equity associates, associate companies and joint
arrangements                                                                 11,5        7 968        7 146       9 579
Deferred taxation assets                                                     10,1          338          307         227
Investment property                                                        (89,7)           31          300          32
Property and equipment                                                       18,4        8 908        7 526       8 784
Long-term employee benefit assets                                            12,6        5 317        4 721       5 055
Mandatory reserve deposits with central banks                                 9,1       16 759       15 358      16 232
Intangible assets                                                             7,7        9 440        8 767       9 010
Total assets                                                                  9,0      944 188      866 624     925 726
Equity and liabilities
Ordinary share capital                                                        0,4          478          476         477
Ordinary share premium                                                        3,4       18 062       17 467      17 569
Reserves                                                                     12,7       57 157       50 736      56 708
Total equity attributable to equity holders of the parent                    10,2       75 697       68 679      74 754
Non-controlling interest attributable to:
– Ordinary shareholders                                                      32,6          443          334         436
– Preference shareholders                                                   (9,5)        3 222        3 561       3 561
– Additional tier 1 capital instruments                                                  1 524
Total equity                                                                 11,5       80 886       72 574      78 751
Derivative financial instruments                                             30,4       19 587       15 016      33 628
Amounts owed to depositors                                                    7,4      741 712      690 495     725 851
Provisions and other liabilities                                             22,9       28 208       22 954      23 240
Current taxation liabilities                                                 44,5          370          256         412
Deferred taxation liabilities                                               > 100        1 646          800       1 182
Long-term employee benefit liabilities                                        3,9        3 177        3 059       3 074
Investment contract liabilities                                               8,6       13 245       12 196      10 988
Insurance contract liabilities                                             (12,2)        3 552        4 044       3 618
Long-term debt instruments                                                   14,5       51 805       45 230      44 982
Total liabilities                                                             8,7      863 302      794 050     846 975
Total equity and liabilities                                                  9,0      944 188      866 624     925 726

Condensed consolidated statement of changes in equity

                                                                                                                          Non-controlling
                                                                                     Non-controlling   Non-controlling           interest
                                                                     Total equity           interest          interest    attributable to
                                                                  attributable to    attributable to   attributable to  additional tier 1
                                                                   equity holders           ordinary        preference            capital
                                                                    of the parent       shareholders      shareholders        instruments   Total equity
                                                                               Rm                 Rm                Rm                 Rm             Rm
Audited balance at 31 December 2014                                        67 024                326             3 561                            70 911
Dividend to shareholders                                                  (2 775)               (10)                                             (2 785)
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           (561)                                                                  (561)
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
Dividend to shareholders                                                  (2 620)                                                                (2 620)
Preference share dividend                                                                                        (193)                             (193)
Issues of shares net of expenses                                                1                                                                      1
Shares (acquired)/no longer held by group entities and BEE trusts              98                                                                     98
Total comprehensive income for the period                                   8 283                102               193                             8 578
Share-based payment reserve movement                                          300                                                                    300
Regulatory risk reserve provision                                              15                                                                     15
Other movements                                                               (2)                                                                    (2)
Audited balance at 31 December 2015                                        74 754                436             3 561                   –        78 751
Additional tier 1 capital instruments issued                                                                                         1 524         1 524
Dividend to shareholders                                                  (2 806)               (11)                                             (2 817)
Preference share dividend                                                                                        (177)                             (177)
Issues of shares net of expenses                                              276                                                                    276
Shares (acquired)/no longer held by group entities and BEE trusts             218                                (339)                             (121)
Total comprehensive income for the period                                   3 500                 18               177                             3 695
Share-based payment reserve movement                                        (245)                                                                  (245)
Reviewed balance at 30 June 2016                                           75 697                443             3 222               1 524        80 886

(1) The group issued a new style (Basel III compliant) additional tier 1 capital instrument of R1,5bn in May 2016 at JIBAR + 7%. In line with the bank regulations, subject to regulatory approval, the instruments are callable only at the option of
    the issuer on 21 May 2021 and any interest payment date thereafter.

Condensed consolidated statement of cashflows
for the period ended

                                                                                                          30 Jun       30 Jun      31 Dec
                                                                                                            2016         2015        2015
                                                                                                      (Reviewed)   (Reviewed)   (Audited)
                                                                                                              Rm           Rm          Rm
Cash generated by operations                                                                              12 271       10 930      22 455
Change in funds for operating activities                                                                (15 902)         (64)    (13 602)
Net cash (utilised by)/from operating activities before taxation                                         (3 631)       10 866       8 853
Taxation paid                                                                                            (2 692)      (2 200)     (4 400)
Cashflows (utilised by)/from operating activities                                                        (6 323)        8 666       4 453
Cashflows (utilised by)/from investing activities                                                          (288)          647       2 867
Cashflows from financing activities                                                                        5 859        6 764       3 802
Effects of exchange rate changes on opening cash and cash equivalents (excluding foreign borrowings)         671         (77)       (300)
Net (decrease)/increase in cash and cash equivalents                                                        (81)       16 000      10 822
Cash and cash equivalents at the beginning of the period(3)                                               39 072       28 250      28 250
Cash and cash equivalents at the end of the period(3)                                                     38 991       44 250      39 072

(3) 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 Jun     30 Jun    31 Dec     30 Jun     30 Jun     31 Dec     30 Jun     30 Jun    31 Dec     30 Jun     30 Jun    31 Dec
                                        2016       2015      2015       2016       2015       2015       2016       2015      2015       2016       2015      2015
Rm                                (Reviewed) (Reviewed) (Audited) (Reviewed)  (Reviewed) (Audited) (Reviewed) (Reviewed) (Audited) (Reviewed) (Reviewed) (Audited)
Nedbank Corporate and Investment
Banking                              476 225    422 890   470 567    447 896    401 042    447 471      6 688      5 793    12 101      3 004      2 485     5 208
Nedbank Retail and Business Banking  296 492    282 988   292 560    270 452    255 945    265 636     12 477     11 369    23 715      2 371      2 132     4 460
Nedbank Wealth                        62 668     61 458    61 322     59 223     58 767     58 588      2 247      1 997     4 320        614        519     1 134
Rest of Africa                        32 734     29 250    32 941     25 447     24 722     26 142        713        668     1 358      (550)        344       691
Centre                                76 069     70 038    68 336     60 284     53 574     49 138         49        (9)     (650)       (12)      (157)     (662)
Total                                944 188    866 624   925 726    863 302    794 050    846 975     22 174     19 818    40 844      5 427      5 323    10 831

During 2015 the Nedbank Corporate and Nedbank Capital clusters were merged to form the Nedbank Corporate and Investment Banking Cluster. Similarly,
the Nedbank Retail and Nedbank Business Banking clusters were merged 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 merged clusters. This had the consequential effect that certain intergroup assets and liabilities and the related
eliminations between Nedbank Retail and Business Banking and the Centre have been restated.

Contingent liabilities and commitments
at

Contingent liabilities and undrawn facilities

                                                   30 Jun       30 Jun      31 Dec
                                                     2016         2015        2015
                                               (Reviewed)   (Reviewed)   (Audited)
                                                       Rm           Rm          Rm
Guarantees on behalf of clients                    38 768       25 557      27 300
Letters of credit and discounting transactions      2 907        3 287       4 463
Irrevocable unutilised facilities and other        96 041      109 631     103 519
                                                  137 716      138 475     135 282

The group, in the normal 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
                          2016         2015        2015
                    (Reviewed)   (Reviewed)   (Audited)
                            Rm           Rm          Rm
Contracted                 818        1 600       1 317
Not yet contracted       1 850        1 238       2 222
                         2 668        2 838       3 539

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.

Investments in private-equity associates, associate companies and joint arrangements
at

                                                                                                                   30 Jun       30 Jun      31 Dec
                                                                                                                     2016         2015        2015
                                                                                                               (Reviewed)   (Reviewed)   (Audited)
                                                                                                                       Rm           Rm          Rm
Listed associates1                                                                                                  6 014        5 596       7 808
Unlisted associates                                                                                                 1 588        1 220       1 320
Unlisted joint arrangements                                                                                           366          330         451
                                                                                                                    7 968        7 146       9 579
(1) The group's investment in Ecobank Transnational Incorporated (ETI) is recorded under listed associates.

Listed associates: ETI
Carrying value                                                                                                      6 014        5 596       7 808
Fair value of investment                                                                                            4 350        6 434       6 916

Key assumptions concerning the future and key sources of estimation

The market value of the group’s investment in ETI based on its quoted share price (a thinly-traded share) is below its carrying value, and this decline is
significant and prolonged, which represents evidence of an impairment indicator at 30 June 2016. Where an impairment indicator exists, an impairment
test compares the higher of its fair value less costs of disposal (fair value) or its value in use (VIU) and the carrying value of the investment. In respect of
ETI, the VIU calculation is higher than the fair value calculation. If the VIU amount is lower than the carrying value, the carrying value needs to be impaired
to the VIU amount, with any resulting impairment loss reported within non-trading and capital items. There would be no impact on the group's regulatory
capital unless any impairment exceeds R3,3bn. ETI’s VIU calculation at 30 June 2016 exceeds the carrying value and no impairment loss has therefore
been recognised. The VIU calculation will be revisited at 31 December 2016, taking into account publically available information and any changes to
key assumptions.

On 27 July 2016 the market value of the group’s investment in ETI based on its quoted share price was R3,2bn. Management is not aware of any adjusting
events after the reporting period, and continues to monitor developments and the possible impact on the VIU calculation for the second half of 2016.

Fair-value hierarchy

FINANCIAL INSTRUMENTS CARRIED AT FAIR VALUE
The fair value of a financial instrument is the price that would be received for the sale of an asset or paid for the transfer of a liability in an orderly
transaction between market participants at the measurement date. Underlying the definition of fair value is an assumption that an entity is a going concern
without any intention or need to liquidate, to curtail materially the scale of its operations or to undertake a transaction on adverse terms. Fair value is not,
therefore, the amount that an entity would receive or pay in a forced transaction, involuntary liquidation or distressed sale.

The existence of published price quotations in an active market is the most reliable evidence of fair value and, where they exist, they are used to measure
the financial asset or financial liability. A market is considered to be active if transactions occur with sufficient volumes and frequencies to provide pricing
information on an ongoing basis. These quoted prices would generally be classified as level 1 in terms of the fair-value hierarchy.

Where a quoted price does not represent fair value at the measurement date or where the market for a financial instrument is not active, the group
establishes fair value by using a valuation technique. These valuation techniques include reference to the current fair value of another instrument that is
substantially the same in nature, reference to the value of the assets of underlying business, earnings multiples, discounted-cashflow analysis and various
option pricing models. Valuation techniques applied by the group would generally be classified as level 2 or level 3 in terms of the fair-value hierarchy. The
determination of whether an instrument is classified as level 2 or level 3 is dependent on the significance of observable inputs versus unobservable inputs
in relation to the fair value of the instrument. Inputs typically used in valuation techniques include discount rates, appropriate swap rates, volatility,
servicing costs, equity prices, commodity prices, counterparty credit risk, and the group's own credit on financial liabilities.

The group has an established control framework for the measurement of fair value, which includes formalised review protocols for the independent review
and validation of fair values separate from the business unit entering into the transaction. The valuation methodologies, techniques and inputs applied to
the fair-value measurement of the financial instruments have been applied in a manner consistent with that of the previous financial year.

FAIR-VALUE HIERARCHY
The financial instruments recognised at fair value have been categorised into the three input levels of the International Financial Reporting Standards
(IFRS) fair-value hierarchy as follows:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date.

Level 2: Valuation techniques based on (directly or indirectly) market-observable inputs. Various factors influence the availability of observable inputs.
These factors may vary from product to product and change over time. Factors include the depth of activity in the relevant market, the type of product,
whether the product is new and not widely traded in the market, the maturity of market modelling and the nature of the transaction (bespoke or generic).

Level 3: Valuation techniques based on significant inputs that are not observable. To the extent that a valuation is based on inputs that are not market-
observable the determination of the fair value can be more subjective, depending on the significance of the unobservable inputs to the overall valuation.
Unobservable inputs are determined on the basis of the best information available and may include reference to similar instruments, similar maturities,
appropriate proxies or other analytical techniques.

All fair values disclosed below are recurring in nature.

Financial assets
                                                                              Total financial assets recognised              Total financial assets                      Total financial assets                    Total financial assets
                                      Total financial assets                          at amortised cost                       classified as level 1                       classified as level 2                     classified as level 3
                                 30 Jun        30 Jun            31 Dec     30 Jun          30 Jun         31 Dec     30 Jun         30 Jun           31 Dec     30 Jun         30 Jun            31 Dec     30 Jun       30 Jun           31 Dec
                                   2016          2015              2015       2016            2015           2015       2016           2015             2015       2016           2015              2015       2016         2015             2015
                             (Reviewed)    (Reviewed)         (Audited) (Reviewed)      (Reviewed)      (Audited) (Reviewed)     (Reviewed)        (Audited) (Reviewed)     (Reviewed)         (Audited) (Reviewed)   (Reviewed)        (Audited)
                                     Rm            Rm                Rm         Rm              Rm             Rm         Rm             Rm               Rm         Rm             Rm               Rm          Rm           Rm               Rm
Cash and cash equivalents        38 991        44 250            39 072     38 991          44 250         39 072
Other short-term securities      82 033        66 083            75 614     35 754          32 166         32 862        754            713              667     45 525         33 204           42 085
Derivative financial
instruments                      19 819        14 732            30 488                                                  450             26               99     19 350         14 706           30 371          19                            18
Government and other
securities                       51 996        37 649            43 060     20 369       15 826(1)         18 807     21 193      10 266(1)           11 438     10 434         11 557           12 815
Loans and advances              693 332       648 844           681 632    594 339         548 138        582 454         42             63               60     98 918        100 610           99 085          33           33               33
Other assets                     11 505         6 386             8 984      6 016           4 635          4 832      5 489          1 751            4 152
Investments in private-
equity associates, associate
companies and joint
arrangements                      1 440         1 026             1 162                                                                                                                                       1 440        1 026            1 162
Investment securities            13 254        19 449            13 155                                                   54             52              448     12 540         18 597           12 016         660          800              691
                                912 370       838 419           893 167    695 469         645 015         678 027    27 982         12 871           16 864    186 767        178 674          196 372       2 152        1 859            1 904

Financial liabilities
                                                                            Total financial liabilities recognised at       Total financial liabilities                 Total financial liabilities               Total financial liabilities
                                     Total financial liabilities                      amortised cost                         classified as level 1                       classified as level 2                     classified as level 3
                                 30 Jun       30 Jun            31 Dec      30 Jun          30 Jun          31 Dec     30 Jun        30 Jun           31 Dec     30 Jun         30 Jun           31 Dec      30 Jun       30 Jun           31 Dec
                                   2016         2015              2015        2016            2015            2015       2016          2015             2015       2016           2015             2015        2016         2015             2015
                             (Reviewed)   (Reviewed)         (Audited)  (Reviewed)      (Reviewed)       (Audited) (Reviewed)    (Reviewed)        (Audited) (Reviewed)     (Reviewed)        (Audited)  (Reviewed)   (Reviewed)        (Audited)
                                     Rm           Rm                Rm          Rm              Rm              Rm         Rm            Rm               Rm         Rm             Rm               Rm          Rm           Rm               Rm
Derivative financial
instruments                      19 587       15 016            33 628                                                    197            41              126     19 262         14 950           33 416         128           25               86
Amounts owed to
depositors                      741 712      690 495           725 851     572 439         553 876         555 508                                              169 273        136 619          170 343
Provisions and other
liabilities                      28 208       21 656            21 942      10 237        8 200(2)           7 988     17 748        13 107           13 724        223            349              230
Investment contract
liabilities                      13 245       12 196            10 988                                                                                           13 245      12 196(3)           10 988
Long-term debt instruments       51 805       45 230            44 982      51 372          43 776          44 581        168                            156        265          1 454              245
                                854 557      784 593           837 391     634 048         605 852         608 077     18 113        13 148           14 006    202 268        165 568          215 222         128           25               86

(1) As reported at 31 December 2015, R1 030m previously reported as loans and receivables at 30 June 2015, have been reclassified to the available-for-sale category.
(2) As reported at 31 December 2015, R1 298m previously reported as financial liabilities at amortised cost at 30 June 2015, have been reclassified as non-financial liabilities.
(3) As reported at 31 December 2015, R4 044m previously reported as financial liabilities designated at fair value at 30 June 2015, have been reclassified as non-financial liabilities.

Level 3 reconciliation
                                                                                                                   Gains/(Losses)
                                                                                                         Gains/         in other                                      Closing
                                                                                         Opening       (Losses)    comprehensive                                      balance
                                                                                      balance at  in profit for       income for      Purchases       Sales and            at
                                                                                       1 January       the year         the year     and issues     settlements        30 Jun
30 June 2016 (Reviewed)                                                                       Rm             Rm               Rm             Rm              Rm            Rm
Financial assets
Derivative financial instruments                                                              18              1                                                            19
Loans and advances                                                                            33                                                                           33
Investment securities                                                                        691           (36)               25           (20)                           660
Investments in private-equity associates, associate companies and joint arrangements       1 162            188              144           (54)                         1 440
                                                                                           1 904            153              169           (74)               –         2 152
Financial liabilities
Derivative financial instruments                                                              86             42                                                           128
                                                                                              86             42                –              –               –           128

                                                                                                                  Gains/(Losses)
                                                                                                         Gains/         in other
                                                                                         Opening       (Losses)    comprehensive                                      Closing
                                                                                      balance at  in profit for       income for     Purchases        Sales and    balance at
                                                                                       1 January       the year         the year    and issues      settlements        31 Jun
30 June 2015 (Reviewed)                                                                       Rm             Rm               Rm            Rm               Rm            Rm
Financial assets
Loans and advances                                                                            33                                                                           33
Investment securities                                                                        800              4                              1              (5)           800
Investments in private-equity associates, associate companies and joint arrangements         898             41                             87                          1 026
                                                                                           1 731             45                 –           88              (5)         1 859

Financial liabilities
Derivative financial instruments                                                              20              5                                                            25
                                                                                              20              5                 –            –                –            25

                                                                                                                   Gains/(Losses)
                                                                                                         Gains/          in other
                                                                                         Opening       (Losses)     comprehensive                                     Closing
                                                                                      balance at  in profit for        income for    Purchases        Sales and    balance at
                                                                                       1 January       the year          the year   and issues      settlements        31 Dec
31 December 2015 (Audited)                                                                    Rm             Rm                Rm           Rm               Rm            Rm
Financial assets
Derivative financial instruments                                                                             18                                                            18
Loans and advances                                                                            33                                                                           33
Investment securities                                                                        800           (36)                              2             (75)           691
Investments in private-equity associates, associate companies and joint arrangements         898             89                            312            (137)         1 162
                                                                                           1 731             71                 –          314            (212)         1 904
Financial liabilities
Derivative financial instruments                                                              20             66                                                            86
                                                                                              20             66                 –            –                –            86

Effect of changes in significant unobservable assumptions on reasonable possible alternatives

The fair-value measurement of financial instruments are, in certain circumstances, measured using valuation techniques that include assumptions that are not market-observable. Where these scenarios apply, the group
performs stress testing on the fair value of the relevant instruments. In performing the stress testing, appropriate levels for the unobservable-input parameters are chosen so that they are consistent with prevailing
market evidence and in line with the group’s approach to valuation control. The following information is intended to illustrate the potential impact of the relative uncertainty in the fair value of financial instruments for
which valuation is dependent on unobservable-input parameters and which are classified as level 3 in the fair-value hierarchy. However, the disclosure is neither predictive nor indicative of future movements in fair value.

                                                                                                                                                                      Value per
                                                                                                                                                                   statement of       Favourable     Unfavourable
                                                                                                                                                    Variance in       financial   change in fair   change in fair
                                                                                                         Significant                                 fair value        position            value            value
30 June 2016 (Reviewed)                                             Valuation technique                  unobservable input                                  %               Rm               Rm               Rm

Financial assets
Derivative financial instruments                                    Discounted-cashflow model,           Discount rates, risk-free rates,
                                                                    Black-Scholes model and              volatilities, credit spreads and
                                                                    multiple valuation techniques        valuation multiples                Between (12) and 10              19                2               (2)
Loans and advances                                                  Discounted cashflows                 Credit spreads and discount
                                                                                                         rates                              Between (12) and 10              33                3               (4)
Investment securities                                               Discounted cashflows,
                                                                    adjusted net asset value,            Valuation multiples,
                                                                    earnings multiples, third-party      correlations, volatilities and
                                                                    valuations, dividend yields          credit spreads                     Between (12) and 10             660               64              (81)
Investments in private-equity associates, associate companies and   Discounted cashflows,
joint arrangements                                                  earnings multiples                   Valuation multiples                  Between (7) and 7           1 440              117             (132)
Total financial assets classified as level 3                                                                                                                              2 152              186             (219)


Financial liabilities
Derivative financial instruments                                    Discounted cashflows,                Growth rates, cost of equity
                                                                    earnings multiples                    and price to book                Between (10) and 10           (128)              21              (28)
                                                                                                                                                                      Value per
                                                                                                                                                                   statement of       Favourable     Unfavourable
                                                                                                                                                     Variance in       financial  change in fair   change in fair
                                                                                                         Significant                                  fair value        position           value            value
30 June 2015 (Reviewed)                                             Valuation technique                  unobservable input                                   %               Rm              Rm               Rm

Financial assets
Loans and advances                                                  Discounted-cashflow model            Credit spreads                     Between (14) and 14               33               3               (4)
Investment securities                                               Discounted cashflows, adjusted
                                                                    net asset value, earnings            Valuation multiples,
                                                                    multiples, third-party valuations,   correlations, volatilities and
                                                                    dividend yields                      credit spreads                     Between (25) and 25              800              72              (91)
Investments in private-equity associates, associate companies and   Discounted cashflows, earnings
joint arrangements                                                  multiples                            Valuation multiples                Between (11) and 11            1 026              85              (97)
Total financial assets classified as level 3                                                                                                                               1 859             160             (192)

Financial liabilities
Derivative financial instruments                                    Discounted cashflows, earnings       Growth rates, cost of equity and
                                                                    multiples                            price to book                       Between (10) and 10             (25)              20              (27)

                                                                                                                                                                     Value per
                                                                                                                                                                  statement of        Favourable     Unfavourable
                                                                                                                                                    Variance in       financial   change in fair   change in fair
                                                                                                         Significant                                 fair value        position            value            value
31 December 2015 (Audited)                                          Valuation technique                  unobservable input                                  %              Rm                Rm               Rm

Financial assets
Derivative financial instruments                                    Discounted-cashflow model,           Discount rates, risk-free rates,
                                                                    Black-Scholes model and              volatilities, credit spreads and
                                                                    multiple valuation techniques        valuation multiples                Between (13) and 10             18                 2              (2)
Loans and advances                                                  Discounted cashflows                 Credit spreads and discount
                                                                                                         rates                              Between (13) and 10             33                 3              (4)
Investment securities                                               Discounted cashflows, adjusted
                                                                    net asset value, earnings            Valuation multiples,
                                                                    multiples, third-party valuations,   correlations, volatilities and
                                                                    dividend yields                      credit spreads                     Between (13) and 10            691                62             (77)
Investments in private-equity associates, associate companies and   Discounted cashflows, earnings
joint arrangements                                                  multiples                            Valuation multiples                 Between (7) and 8           1 162                97            (109)
Total financial assets classified as level 3                                                                                                                             1 904               164            (192)

Financial liabilities
Derivative financial instruments                                    Discounted cashflows, earnings       Growth rates, cost of equity and
                                                                    multiples                            price to book                      Between (10) and 10            (86)               37             (33)

Unrealised gains or losses
The unrealised gains or losses arising on instruments classified as level 3 include the following:

                           30 Jun       30 Jun      31 Dec
                             2016         2015        2015
                       (Reviewed)   (Reviewed)   (Audited)
                               Rm           Rm          Rm
Private-equity gains          153           44          71

Summary of principal valuation techniques – level 2 instruments
The following table sets out the group's principal valuation techniques used in determining the fair value of financial assets and financial liabilities
classified as level 2 in the fair-value hierarchy:

Assets                             Valuation technique             Key inputs
Other short-term securities        Discounted-cashflow model       Discount rates
Derivative financial instruments   Discounted-cashflow model       Discount rates
                                   Black-Scholes model             Risk-free rate and volatilities
                                   Multiple valuation techniques   Valuation multiples
Government and other securities    Discounted-cashflow model       Discount rates
Loans and advances                 Discounted-cashflow model       Interest rate curves
Investment securities              Discounted-cashflow model       Money market rates and interest rates
                                   Adjusted net asset value        Underlying price of market–traded instruments
                                   Dividend yield method           Dividend growth rates
Liabilities
Derivative financial instruments   Discounted-cashflow model       Discount rates
                                   Black-Scholes model             Risk-free rate and volatilities
                                   Multiple valuation techniques   Valuation multiples
Amounts owed to depositors         Discounted-cashflow model       Discount rates
Provisions and other liabilities   Discounted-cashflow model       Discount rates
Investment contract liabilities    Adjusted net asset value        Underlying price of market–traded instruments
Long-term debt instruments         Discounted-cashflow model       Discount rates

Assets and liabilities not measured at fair value for which fair value is disclosed

Certain financial instruments of the group are not carried at fair value, including those categorised as held to maturity, loans and receivables, and financial
liabilities at amortised cost. The calculation of the fair value of these financial instruments incorporates the group’s best estimate of the value at which
these financial assets could be exchanged, or financial liabilities could be transferred, between market participants at the measurement date. The group’s
estimate of what fair value is does not necessarily represent the amount for which the group would be able to sell the asset or transfer the respective
financial liability in an involuntary liquidation or distressed sale.

The fair values of these respective financial instruments at the reporting date, as detailed below, are estimated only for the purpose of IFRS disclosure:

Rm                              Carrying value  Fair value    Level 1   Level 2    Level 3
30 June 2016 (Reviewed)
Financial assets                       650 462     638 246     19 850    35 707    582 689
Other short-term securities             35 754      35 707               35 707
Government and other securities         20 369      19 850     19 850
Loans and advances                     594 339     582 689                         582 689

Financial liabilities                   51 372      51 077     25 774    25 303          –
Long-term debt instruments              51 372      51 077     25 774    25 303

Rm                              Carrying value  Fair value    Level 1   Level 2    Level 3
30 June 2015 (Reviewed)
Financial assets                       596 130     595 388     15 616    32 127    547 645
Other short-term securities             32 166      32 127               32 127
Government and other securities         15 826      15 616     15 616
Loans and advances                     548 138     547 645                         547 645

Financial liabilities                   43 776      43 191     18 566    24 625          –
Long-term debt instruments              43 776      43 191     18 566    24 625

Rm                              Carrying value  Fair value    Level 1   Level 2    Level 3
31 December 2015 (Audited)
Financial assets                       634 123     628 792     17 415    32 709    578 668
Other short-term securities             32 862      32 709               32 709
Government and other securities         18 807      17 415     17 415
Loans and advances                     582 454     578 668                         578 668

Financial liabilities                   44 581      42 933     24 269    18 664          –
Long-term debt instruments              44 581      42 933     24 269    18 664

There has been no significant changes in the methodology used to estimate the fair value of the above instruments.

Liquidity coverage ratio

                                                                                                                 Total       Total
                                                                                                            unweighted    weighted
                                                                                                              value(4)    value(5)

Rm                                                                                                           (Average)   (Average)

High-quality liquid assets (HQLA)
Total HQLA                                                                                                                 127 114
Cash outflows
 Retail deposits and deposits from small-business clients                                                      170 821      16 908
  – Stable deposits                                                                                              3 468         173
  – Less stable deposits                                                                                       167 353      16 735
 Unsecured wholesale funding                                                                                   244 303     126 664
  – Operational deposits (all counterparties) and deposits in institutional networks of cooperative banks      124 859      35 897
  – Non-operational deposits (all counterparties)                                                              118 264      89 587
  – Unsecured debt                                                                                               1 180       1 180
 Secured wholesale funding                                                                                      24 817          59
 Additional requirements                                                                                        98 023      18 719
  – Outflows related to derivative exposures and other collateral requirements                                   2 309       2 309
  – Outflows related to loss of funding on debt products                                                         1 295       1 295
  – Credit and liquidity facilities                                                                             94 419      15 115
 Other contractual funding obligations                                                                             910         910
 Other contingent funding obligations                                                                          116 806       5 691
 Total cash outflows                                                                                           655 680     168 951
Cash inflows
 Secured lending (eg reverse repurchase agreements)                                                             18 171       1 428
 Inflows from fully performing exposures                                                                        45 266      29 558
 Other cash inflows                                                                                              5 372       5 346
 Total cash inflows                                                                                             68 809      36 332

                                                                                                                             Total
                                                                                                                          adjusted
                                                                                                                          value(6)
Total HQLA                                                                                                                 127 114
Total net cash outflows                                                                                                    136 469
Liquidity coverage ratio (%)                                                                                                 93,1%

(4) Unweighted values are calculated as outstanding balances maturing or callable within 30 days (for inflows and outflows).
(5) Weighted values are calculated after the application of respective haircuts (for HQLA) or inflow and outflow rates (for inflows and outflows).
(6) 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.

The figures above reflect the simple average of the month-end values at 30 April 2016, 31 May 2016 and 30 June 2016 based on regulatory submissions to
the South African Reserve Bank.

This section on the liquidity coverage ratio has not been reviewed the group's auditors.

Company details

Nedbank Group Limited
Incorporated in the Republic of SA
Registration number 1966/010630/06

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

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

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

Directors
V Naidoo (Chairman), MWT Brown* (Chief Executive), DKT Adomakoh (Ghanaian),
TA Boardman, BA Dames, ID Gladman (British), JB Hemphill, EM Kruger,
PM Makwana, Dr MA Matooane, NP Mnxasana, RK Morathi* (Chief Financial
Officer), JK Netshitenzhe, MC Nkuhlu* (Chief Operating Officer), S Subramoney,
MI Wyman** (British).

* Executive ** Lead independent 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 SA (Pty) Ltd
                                Nedbank CIB
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 PDF.
-   Financial results presentation to analysts.
-   Link to a webcast of the presentation to analysts.

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

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