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NEDBANK GROUP LIMITED - Condensed Consolidated Interim Financial Results for the six months ended 30 June 2017

Release Date: 02/08/2017 07:05
Code(s): NED     PDF:  
Wrap Text
Condensed Consolidated Interim Financial Results for the six months ended 30 June 2017

NEDBANK GROUP LIMITED 
(Incorporated in the Republic of South Africa)
Registration number: 1966/010630/06
JSE share code: NED
NSX share code: NBK
ISIN: ZAE000004875
('Nedbank Group' or 'the group')

Condensed consolidated interim financial results for the six months ended 30 June 2017 

Nedbank Group continues to create value for all our stakeholders in a challenging political and economic environment and
increased our interim dividend by 7,0% to 610 cents per share. Our headline earnings of R5,3bn, being 2,9% down on our
2016 first-half performance, is best understood through two lenses: 

- Our managed operations produced a solid result, with headline earnings growth of 6,7% and an improved ROE
  (excluding goodwill) of 18,9%, as slower revenue growth was offset by reduced impairments and good cost
  management. 
- The group's performance was negatively impacted by our share of the loss from our associate ETI (as announced on 18
  April 2017), which decreased the 6,7% growth in headline earnings in managed operations to an overall 2,9%
  reduction in headline earnings. While risks remain, the outlook for ETI is improving. 

The strategies implemented over the past few years in preparation for a tougher economic environment have positioned the
group well for the recessionary conditions and the sovereign-credit-ratings downgrade that followed President Zuma’s
cabinet reshuffle. Capital generation and liquidity levels are strong and we have a banking franchise underpinned by
7,9m clients, 2,7m of whom are main-banked clients. Our advances book is of a high quality and we have built excellent
collection capabilities. In addition, in an environment of slower revenue growth, and as we accelerate the delivery of
our digital products, we are intensifying our focus on cost-efficiencies to create investment capacity and to improve
efficiency ratios. We aim to create a more agile, competitive and digital Nedbank. 

In the context of a challenging political and economic environment, our guidance for growth in diluted headline earnings
per share for 2017 is for this measure to be positive, but less than or equal to growth in nominal GDP. 

Mike Brown

Chief Executive

2017 interim results commentary

Banking and economic environment

Despite ongoing geopolitical tensions, economic growth in developed markets improved, supported by accommodative
monetary policies as well as manufacturing and trade activity gaining momentum. Emerging and developing economies also
improved as a consequence of growth in China, a recovery in global commodity prices and increased capital inflows as
global investors search for higher yields.

Against previous expectations of an improved economic environment in 2017, SA entered a technical economic recession,
with GDP contracting by 0,3% in the fourth quarter of 2016 and by 0,7% in the first quarter of 2017. The weakness in the
economy was widespread, with the manufacturing, utilities and domestic trade sectors all declining sharply. Consumers
were placed under increased financial pressure as unemployment rates rose to a historic high of 27,7%. This, combined
with the contraction in real disposable income and household consumption expenditure, led to a slowdown in household
credit demand as households reduced debt levels, reflected in the debt-to-disposable income shrinking to 73,2%. In
addition, credit demand was impacted as government fiscal policy focused on stabilising the budget deficit.

Confidence levels declined to new lows following President Zuma's cabinet reshuffle on 31 March 2017, which triggered a
sovereign-ratings downgrade by three international rating agencies. Standard & Poor's Global Ratings downgraded SA's
foreign currency debt to subinvestment grade, but retained the local currency rating at investment grade. Fitch
downgraded the country's foreign and local currency rating to subinvestment grade. Moody's also downgraded SA's
sovereign risk ratings to one notch above subinvestment grade. Both Standard & Poor's and Moody's placed the country on
a negative ratings outlook.  

While the current levels of political and economic uncertainty persist, there is heightened risk of further sovereign
downgrades of the local currency debt to below investment grade and the resultant exclusion from the Citibank World
Government Bond Index would have negative consequences for the SA economy. 

Review of results

Nedbank produced a resilient performance in a macro environment that has proved to be more challenging than expected.
Our managed operations produced headline earnings growth of 6,7% to R6 433m (June 2016: R6 030m), driven by slower
revenue growth, reduced impairments and good cost management. 

Headline earnings, including our share of the loss from ETI of R1 162m (June 2016: R603m loss), decreased by 2,9% to R5
271m (June 2016: R5 427m). 

This translated into a decrease in DHEPS of 3,7% to 1 078 cents (June 2016: 1 119 cents) and a decrease in HEPS of 3,3%
to 1 098 cents (June 2016: 1 135 cents). Excluding ETI, DHEPS increased by 5,9% to 1 316 cents (June 2016: 1 243 cents).

ROE (excluding goodwill) and ROE decreased to 15,1% (June 2016: 15,7%) and 14,0% (June 2016: 14,6%) respectively. ROE
(excluding goodwill and ETI) improved from 18,4% to 18,9%. The ROA decreased to 1,10% (June 2016: 1,19%). Excluding ETI,
ROA improved from 1,32% to 1,35%.

Our CET1 capital ratio of 12,3% (June 2016: 11,6%), average LCR for the second quarter of 104,6% (June 2016: 93,1%) and
an NSFR of above 100% on a pro forma basis, are all Basel III-compliant and are a reflection of a strong balance sheet. 

Delivering sustainably to all our stakeholders

Nedbank plays an important role in the economy and we remain committed to contributing to the societies in which we
operate by delivering value to our staff, clients, shareholders, regulators and communities.

For staff 

We employ 32 349 staffmembers, invested R137m in training and paid salaries and benefits of R7,8bn. Successful
engagements were held as part of our People 2020 groupwide programme aimed at transforming and aligning our leadership
culture and talent to our strategic objectives. We refreshed our executive management programme to be more digitally
focused and brought together 500 of our leaders across the group at the Leadership Accelerator to ensure the adoption of
new insights that will drive accelerated levels of change. Transformation remains key to human capital development and
we continued to focus on this fundamental change across all levels at Nedbank, from our board of directors to all our
staffmembers. Currently, black representation at board level is 61,1%, at executive level 50,0% and our total staff at
77,1%. In addition, 62,4% of our total staff are female.  

For clients 

Our clients’ access to banking was improved through our network of 843 Intelligent Depositors and we increased the total
number of digitally focused new-image branches to 303. Digitally active and enabled clients grew strongly, increasing
the value of Nedbank App Suite™ transactions by 68,0% to R18,6bn. Nedbank Contact Centre client service will shortly be
enhanced by voice biometrics and multimedia functionality that have been successfully piloted. We increased our total
RBB client numbers to 7,5m with main-banked clients decreasing 0,3%, driven by the youth client segment that declined by
6,4% as slower transactional activity caused existing clients to fall out of our main-banked definition, while
middle-market main-banked clients increased slightly by 0,5% and Retail Relationship Banking clients increased by 5,1%.
We supported our clients by advancing R76,0bn (June 2016: R74,8bn) of new loans in the first six months of the year,
including R39,1bn to RBB clients and R12,4bn to small and medium enterprises and Business Banking clients, as well as
R719m of funding for affordable-housing projects to CIB clients. Nedgroup Investments has grown to be the fifth-largest
unit trust manager and fourth-largest offshore unit trust manager in SA, with overall assets under management growing by
15,2% to R295,3bn (June 2016: R256,3bn). It has maintained its top-three ranking among asset management companies over
the past nine years, together with first position in the offshore category for the second consecutive year in the recent
quarterly PlexCrown Unit Trust survey, as well as winning in the Offshore Management Company of the Year category for
the third consecutive year, while Nedbank Private Wealth was ranked third overall in the Intellidex Top Private Banks
and Wealth Managers survey. 

For shareholders

Nedbank's net asset value per share increased to 16 200 cents (June 2016: 15 826 cents), with our share price up by
12,0% since June 2016. Our interim dividend is largely based on the performance of our managed operations and increased
by 7,0%, ahead of growth in HEPS. We engaged constructively with shareholders in over 388 meetings in the past 12
months, and at our 50th annual general meeting all resolutions were passed, with more than 90% of votes in favour. We
ensure transparent, relevant and timeous reporting and disclosure to shareholders, as acknowledged by Nedbank's
Integrated Report having been ranked in the top tier of JSE-listed companies. 

For regulators

We maintained Basel III requirements ahead of full compliance timelines, achieving a CET1 ratio of 12,3%, an average
long-term funding ratio of 33,1% and an average LCR ratio of 104,6% in the second quarter of 2017. We have invested over
R100bn in government and public sector bonds as part of our HQLA requirements and, in doing so, remain committed to
making a meaningful contribution to the countries in which we operate, thereby supporting the funding needs of
government. Cash taxation contributions of R5,5bn were made relating to direct, indirect, pay-as-you-earn and other
taxation. We continued to work closely with all regulators to ensure efficient delivery of the various regulatory
programmes, including our IFRS 9 parallel run, which is progressing well. 

For communities

Nedbank contributes to society in multiple ways. We continued to participate in the CEO Initiative, working with
government, business and labour towards a more inclusive SA society. At the parliamentary presentation on transformation
in March 2017 Nedbank was recognised as a leader in transformation within the financial services industry. This was
affirmed by the group maintaining our level 2 BBBEE contributor status for the eighth consecutive year. Since 2012 we
have contributed over R700m to socioeconomic development, with more than 50% allocated to education. We supported local
businesses and the SA economy by sourcing 75% of our procurement locally. Our Fair Share 2030 strategy has enabled more
than R745m of new lending to support student accommodation and we have disbursed R14,9bn for renewable-energy deals to
date. In line with our new brand payoff line 'see money differently' and our purpose to use our financial expertise to
do good for individuals, families, businesses and society, we have supported consumer financial education for 135 815
individuals. This year we also proudly celebrated the 10th year as title sponsor of the Nedbank Cup, which is the only
cup competition in SA that addresses football development through the inclusion of professional and amateur teams. 

Cluster financial performance 

Nedbank's managed operations generated headline earnings growth of 6,7% to R6 433m (June 2016: R6 030m) and delivered an
ROE of 17,6% with good earnings contributions from CIB and RBB. 

                                Change    Headline earnings    ROE (excluding goodwill)
                                   (%)         (Rm)                       (%)
                                         Jun 2017    Jun 2016     Jun 2017   Jun 2016
CIB                                6,9      3 211       3 004         20,8       21,3
RBB                                7,3      2 544       2 371         18,7       18,3
Wealth                          (15,5)        519         614         27,8       35,9
RoA subsidiaries                  32,1         70          53          3,0        2,7
Centre                         > 100,0         89        (12)
Nedbank managed operations         6,7      6 433       6 030         18,9       18,4
ETI                             (92,7)    (1 162)       (603)
Nedbank Group(1)                 (2,9)      5 271       5 427         15,1       15,7

(1)   ROE (including goodwill) 14,0% (June 2016: 14,6%).

CIB maintained an attractive ROE of above 20% and produced solid results, underpinned by improved credit losses.
Although both revenue lines were affected by slowing economic activity, NIR growth was also impacted by a high base.
Early repayments, coupled with slower drawdowns, resulted in weaker advances growth although the pipeline remained
stable.  

RBB delivered an improved ROE and good headline earnings growth, underpinned by solid NIR growth and lower impairments
and expense growth. As a result PPOP was up 3,1%, which is indicative of a growing franchise. NII benefited from
improved volumes and mix changes in both advances and deposits, offset by margin compression largely due to the impact
of the prime - JIBAR squeeze. NIR growth was supported by quality transactional income and card revenue. 

Nedbank Wealth’s decrease in headline earnings reflects a difficult first half, with good performances in Wealth
Management and Asset Management, which were offset by a weaker performance in Insurance due to the impact of higher
weather-related claims, an increase in lapses, as well as lower volumes. Nedbank Wealth’s offshore businesses were also
impacted by the strengthening of the rand.

RoA's earnings were negatively impacted by the loss from our associate ETI as a result of its fourth-quarter 2016 loss
(previously announced on 18 April 2017) and its first-quarter 2017 profit (previously announced on 27 April 2017), in
line with our policy of accounting for ETI earnings a quarter in arrear. The RoA subsidiaries grew headline earnings off
a low base, benefiting from the first-time consolidation of Banco Único, while continued investment in the franchise and
technology systems has led to strong client gains.

The increase in the Centre was largely due to fair-value gains on the underlying hedging portfolios.

Financial performance 

Net interest income

NII increased by 4,0% to R13 548m (June 2016: R13 028m), ahead of average interest-earning banking asset growth of 2,4%.

NIM expansion of 6 bps to 3,58% (June 2016: 3,52% rebased) was largely driven by an endowment benefit of 9 bps and
improved asset mix change of 6 bps, offset by asset pricing pressure of 5 bps and the narrowing of the prime-JIBAR
spread costing 4 bps. 

Impairments charge on loans and advances

Impairments decreased by 27,9% to R1 594m (June 2016: R2 211m), underpinned by a quality portfolio across all clusters.
The lower CLR of 0,47% (June 2016: 0,67%) largely relates to the improvement in CIB's CLR.  

In CIB impairments are individually determined and 86% of impairments are concentrated in approximately 10 counters.
During the period the positive resolution and rerating of some counters led to the release of specific and portfolio
impairments. Overall the improvement in CIB's CLR was driven by recoveries from Commercial Property Finance and improved
commodity prices. RBB's lower CLR represents the underlying mix effect of personal loans and home loans continuing to
improve, and MFC and Card increasing in line with expectations. Furthermore, in RBB some of the additional overlays that
were previously raised for event risks, such as drought in certain geographies and a possible deterioration in secured
lending to higher-risk clients who also have a personal loan, were released as these risks have not materialised and the
related portfolio provisions can no longer be justified. Continued prudence in provisioning and a proactive collections
strategy contributed to higher levels of postwriteoff recoveries at R578m (June 2016: R564m).  

CLR (%)         Banking advances (%)   Jun 2017 Jun 2016 Dec 2016 TTC target ranges
CIB                             48,7     (0,03)     0,31     0,34         0,15 -0,45
RBB                             44,2       1,14     1,23     1,12         1,30 -1,80
Wealth                           4,3       0,09     0,16     0,08         0,20 -0,40
RoA                              3,0       0,80     0,76     0,98         0,65 -1,00
Nedbank Group                              0,47     0,67     0,68         0,60 -1,00

Total defaulted advances increased by 9,5% to R20 190m (June 2015: R18 437m), mostly driven by MFC and Card in RBB,
partly offset by the improvement in CIB as well as the effect of SARB directive 7 and new curing definition, reported at
31 December 2016, resulting in loans previously shown as performing being reclassified as defaulted. Defaulted advances,
excluding these 'performing defaulted advances' increased by 0,3% to R16 608m (June 2016: R16 556m).

The specific coverage ratio of 37,2% (June 2016: 36,2%) reflects the changing mix across all our portfolios and includes
the increase in CIB’s specific coverage to 24,6% (June 2016: 14,8%) along with RBB's lower specific coverage of 41,1%
(June 2016: 44,6%). RBB's coverage ratio is in line with the 41,1% level reported at December 2016 and, excluding
performing defaulted advances, RBB's specific coverage was maintained at 49,6% (June 2016: 49,7%).

The reduction in the portfolio coverage ratio to 0,65% (June 2016: 0,71%) mostly relates to RBB’s additional overlays
decreasing to R409m (June 2016: R701m). The central portfolio provision decreased from R500m at 31 December 2016 to
R350m (June 2016: R350m). This provision is being maintained for, inter alia, the effect of the potential ratings
downgrade of the local currency and stressed sectors such as resources, cement, construction and retailers remaining
under pressure. We continue to monitor asset quality closely for any material evidence of the effect of the sovereign
downgrades and the recession.  

Non-interest revenue

NIR growth of 3,3% to R11 730m (June 2016: R11 357m) reflects a resilient performance. The underlying movements relate
to:

- Commission and fee income growth of 3,1% to R8 436m (June 2016: R8 185m), as weak business and consumer confidence
  levels negatively affected transactional activity in CIB and led to lower volumes in RBB where an increasing
  number of clients also transacted within fixed-rate bundles. 
- Insurance income decreasing 15,7% to R776m (June 2016: R921m) as a result of significant weather-related claims,
  lower homeowner's cover and credit life volumes, and an increase in lapses.
- Trading income increasing 13,3% to R2 006m (June 2016: R1 771m) from good performance in the markets business as
  volatility levels remain elevated. 
- Private-equity income reducing to R203m (June 2016: R432m) relative to the high base in the comparative period,
  which included positive realisations in the Commercial Property Finance portfolio. 

Expenses

Expense growth of 5,0% to R14 369m (June 2016: R13 686m) was below inflation and below the guidance we provided for the
full 2017 year (being growth of mid-to-upper single digits), demonstrating disciplined and careful management of
discretionary expenses in an environment of slowing revenue growth. Overall, growth was largely driven by our
investments for transactional banking strategies of R265m and the consolidation of Banco Único of R147m, partly offset
by efficiencies of R342m. The underlying movements included: 

- Staff-related costs increasing at a slower rate of 3,6%, following-
- 8,4% growth in remuneration and other staff costs, including an average annual salary increase of 6,5% and a
  reduction in staff numbers since December 2016; and
- a 7,6% decrease in short- and long-term incentives. 
- Computer-processing costs increasing 6,9% to R2 121m off a higher base in the prior year. 
- Fees and insurance costs being 12,7% higher at R1 557m, due mostly to additional regulatory-related costs.

The group's growth in expenses exceeded total revenue growth of 3,7%, resulting in a negative jaws ratio of 1,7% (June
2016: 1,7% positive) and an efficiency ratio of 56,5% (June 2016: 55,6%) for managed operations. Expense growth,
excluding the RoA, was 3,4%.

Earnings from associates

The loss of R1 053m (June 2016: R431m loss) in earnings from associates was attributed largely to ETI's loss of R1 203m
in the fourth quarter of 2016 (announced on 18 April 2017), partly offset by the profit of R142m reported by ETI for the
first quarter of 2017 (announced on 27 April 2017), in line with our policy of accounting for ETI earnings a quarter in
arrear. The effect of ETI's loss on the group's headline earnings was R1 162m, including the R101m impact of funding
costs. 

Accounting for this associate loss, together with Nedbank’s share of ETI's other comprehensive income and Nedbank’s
foreign currency translation reserve, reduced the carrying value of the group's strategic investment in ETI from R4,0bn
on 31 December 2016 to R3,1bn at 30 June 2017. Since the introduction of the new foreign exchange regime by the Central
Bank of Nigeria on 21 April 2017, confidence has improved and the Nigerian equity market has increased by 31%. In line
with this the market value of the group's investment in ETI, based on its quoted share price - albeit in illiquid
markets, increased to R3,0bn on 30 June 2017 and R3,7bn on 28 July 2017. While risks remain, we believe the outlook for
ETI is improving.

As required by IFRS, the R1bn impairment provision recognised at 31 December 2016 was reviewed at 30 June 2017 and it
was determined that no change to the provision is required. A similar review will be performed at our 2017 financial
year-end.

ETI remains a strategic investment for Nedbank, providing our clients with a pan-African transactional banking network
across 39 countries and access to dealflow in Central and West Africa. We have made good progress in working with ETI's
board and other institutional shareholders to strengthen their board and management. Institutional shareholder
representation on ETI's board has increased and Nedbank has two appointees. Subject to regulatory approval, Brian
Kennedy will join Mfundo Nkuhlu on ETI's board. Mfundo has recently been nominated to become Chair of the ETI Risk
Committee. We remain supportive of ETI's endeavours of delivering an ROE in excess of its COE in due course.

Statement of financial position 

Capital 

The group continued to strengthen its capital position, with our CET1 ratio at 12,3% (June 2016: 11,6%) now close to the
top end of our internal target range, following organic capital generation through earnings.

In the current environment of slower advances growth, capital generation has been stronger following low credit RWA
growth, a decrease in trading market RWA due to foreign exchange movements and the decline in the threshold deduction
given the decrease in the carrying value of ETI. 

In addition to lower RWA growth, we continue to identify RWA optimisation initiatives that will support the industry
implementation of the new Standardised Approach for counterparty credit risk that becomes effective later this year. 

The group's tier 1 ratio improved to 13,2% (June 2016: 12,5%) and includes the issuance of R1,1bn of new-style
additional tier 1 capital instruments during the last 12 months, offsetting the progressive grandfathering of perpetual
preference shares as we transition towards end-state Basel III requirements. The group's total capital ratio improved to
15,7% (June 2016: 14,5%) and includes the issuance of R4,5bn of new-style tier 2 capital instruments that more than
offsets the redemption of US$100m in old-style tier 2 capital instruments during the last 12 months.  

Basel III (%)         Jun 2017  Dec 2016  Jun 2016  Internal target range  Regulatory minimum(2)
CET1 ratio                12,3      12,1      11,6              10,5 -12,5                 7,25
Tier 1 ratio              13,2      13,0      12,5                 > 12,0                 8,75
Total capital ratio       15,7      15,3      14,5                 > 14,0                10,75

(Ratios calculated include unappropriated profits.)

(2) The Basel III regulatory requirements are being phased in between 2013 and 2019, and exclude any idiosyncratic or systemically important bank minimum
    requirements.

Funding and liquidity 

Optimising our funding profile and maintaining a strong liquidity position remain priorities for the group in the
current environment.  

The group's three-month average long-term funding ratio improved to 33,1% for the second quarter of 2017 (June 2016:
30,9%), supported by growth in Nedbank Retail Savings Bonds of R3,1bn to R22,3bn and the successful capital markets
issuance of R3,5bn of senior unsecured debt, R2,5bn of tier 2 debt and R1,0bn of securitisation. Our funding profile
benefited from our above-average market share in the medium-to-longer-term wholesale funding buckets, which reduced our
LCR HQLA requirements, positively impacting the all-in cost of wholesale funding. 

The group's quarterly average LCR of 104,6% (June 2016: 93,1%) exceeded the minimum regulatory requirement of 80% in
2017 and 90% from 1 January 2018. To absorb the seasonal and cyclical volatility in the LCR the group maintains
appropriate operational buffers. 

Nedbank Group LCR               Jun2017   Dec2016   Jun2016
HQLA (Rm)                       144 568   137 350   127 114
Net cash outflows (Rm)          138 260   125 692   136 469
Liquidity coverage ratio (%)(3)   104,6     109,3      93,1
Regulatory minimum (%)             80,0      70,0      70,0

(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 a quarterly average of R144,6bn (June 2016: R127,1bn). Together
with our portfolio of other quick-liquidity sources, the total available sources of quick liquidity amounted to R190,0bn
(June 2016: R167,7bn), representing 19,7% of total assets.

Nedbank has maintained the NSFR at above 100% on a pro forma basis and is already compliant with the minimum regulatory
requirements that will be effective on 1 January 2018. The remaining key focus areas relating to the NSFR are finalising
a number of minor interpretational matters and ensuring that compliance is achieved in the context of balance sheet
optimisation. 

Loans and advances

Loans and advances increased 2,4% to R709,9bn (June 2016: R693,3bn), driven by improved growth across the retail banking
portfolios. 

Loans and advances by cluster are as follows: 

Rm                   Change (%)  Jun 2017   Jun 2016
CIB                         1,3   363 873    359 041
Banking activities          0,0   325 266    325 258
Trading activities         14,3    38 607     33 783
RBB                         4,3   296 945    284 617
Wealth                    (0,7)    29 464     29 677
RoA                        12,0    20 382     18 199
Centre                              (800)      1 798
Group(4)                    2,4   709 864    693 332

(4) Intercompany eliminations

Advances growth in CIB was flat, with commercial-mortgage advances increasing 8,3%. Our leading market share in
commercial mortgages continued to be underpinned by a strong client base and a large, secure asset pool. In contrast,
term loans decreased 5,8% due to weak business confidence levels resulting in drawdowns being delayed, as well as early
repayments of loans. Excluding the impact of the stronger USD/ZAR exchange rate on the foreign lending book, total CIB
advances growth was 2,6%. 

RBB grew advances across all key categories with MFC and Card increasing 6,6% and 6,7%, respectively, while Home Loans
and Personal Loans grew at below-inflation levels. Business Banking advances growth remained flat, owing to slower
drawdowns as many clients continue to manage their cashflows more carefully and delay investment decisions. 

Growth in advances in the RoA Cluster was largely due to the inclusion of Banco Único, which contributed R2,5bn to the
advances portfolio. On a like-for-like basis advances growth was flat due to muted economic growth in the rest of the
SADC countries.

Deposits

Deposits grew 2,8% to R762,7bn (June 2016: R741,7bn), with total liabilities increasing 2,1% to R881,2bn (June 2016:
R863,3bn). The loan-to-deposit ratio improved to 93,1% (June 2016: 93,5%).

Active management of our deposit and transactional banking franchise resulted in RBB deposits growing strongly by 8,8%
to R279,3bn (June 2016: R256,7bn), contributing to market share gains in household deposits to 19,1% (June 2016: 18,6%)
and current accounts to 19,4% (June 2016: 19,1%). Growth in current accounts of 8,3% and fixed deposits of 9,2% was
driven by the success of investment products such as our Tax-free Savings Account, Green Savings Bond and 12-month
Fixed Deposits, as part of our strategy to grow Basel III-friendly deposits.

Good growth was recorded in other key deposit categories, including call accounts and term deposits of 6,3% and cash
management of 5,4%, while foreign currency liabilities decreased by 17,9%. This was predominantly driven by a reduction
in expensive foreign currency funding used in the general rand funding pool. The balance of foreign funding is closely
matched to foreign currency assets and the mismatch is negligible. 

Group strategic focus

The group continued to focus on delivering on our five strategic focus areas designed to make Nedbank a more agile,
competitive and digital bank. 

- Delivering innovative market-leading client experiences. Our personal loans digital sales application was rolled
  out during the period and we plan to launch our refreshed retail and wealth banking apps, and new Travel Card and
  Investments Online products, among others, in the second half of 2017. Digitally enabled and active retail clients
  grew strongly, driving up the value of Nedbank App Suite™ transactions 68% to R18,6bn. To date 48% of our outlets
  have been converted to new-image branches and our investment in distribution channels over the next four years
  (2017 to 2020) will result in 82% of our retail clients being exposed to the new-image branch format and
  self-service offerings. Nedbank’s retail integrated channels won the Best Smart Branch Project in Africa award at
  The Asian Banker Technology Innovation Awards ceremony. Nedbank Private Wealth's mobile app has been rated Gold
  Standard in a McKinsey review that compared the client experience of SA bank’s mobile applications for both visual
  presentation and functionality.
- Growing our transactional banking franchise faster than the market. Nedbank's RBB franchise maintained a total
  client base of 7,5m, with 2,7m main-banked clients translating into retail transactional NIR growth of 5,2%. Our
  main-banked clients decreased by 0,3%, with the youth client segment declining by 6,4% as slower transactional
  activity caused existing clients to fall out of our main-banked definition, while the middle-market and Retail
  Relationship Banking client segments increased by 0,5% and 5,1%, respectively. Transactional banking progress was
  also reflected in market share gains in household and current-account deposit market share gains to 19,1% and
  19,4% respectively. The CIB integrated model enabled deeper client penetration and increased cross-sell,
  generating 12 primary-bank client wins year to date and increased dealflow into the markets business, supporting
  13,3% growth in trading income. 
- Being operationally excellent in all we do. Cost discipline in an environment of slower revenue growth remains an
  imperative, with ongoing initiatives such as reducing our core systems by 113 to 138 from 251 since inception and
  we are well on our way to reaching 60; and the reduction of floor space in RBB by 30 000 m² by 2020, of which 24
  819 m² has been achieved since 2014. We continued to remain on track for the delivery of Old Mutual Group's target
  of R1,0bn pretax run rate synergies, of which approximately 30% should accrue to Nedbank by the end of 2017. Good
  progress was also made with our target operating model initiatives, which aims to generate R1,0bn pretax benefits
  for Nedbank by 2019. The majority of the cost initiatives have been identified in RBB, which will contribute
  approximately 40% of the benefits. RBB has established a transformation office to track and monitor the delivery
  of 221 initiatives across the five broad areas of credit, distribution, operational excellence, simplification and
  procurement. Approximately 30% of the synergies will be from cost optimisation in Shared Services through the
  removal of duplicative service functions, cost-efficiencies from marketing and improving the RoA operating model.
  The remaining 30% will be achieved through revenue opportunities from data-driven intelligence, new digital
  technologies and innovation integration that is being accelerated through our Digital Fast Lane initiative. 
- Managing scarce resources to optimise economic outcomes. We maintained our focus on growing activities that
  generate higher levels of EP, such as growing transactional deposits, with current accounts up 8,3%; increasing
  transactional banking activity, with commission and fees in RBB up 5,2%; and achieving earnings growth of 7,3% in
  RBB and 6,9% in CIB. 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 47 bps, below the
  bottom end of our TTC target range. At the same time our balance sheet metrics remain strong and we continue to
  deliver dividend growth above the rate of HEPS growth. 
- Providing our clients with access to the best financial services network in Africa.
- In Central and West Africa, ETI remains a strategic investment. Working together, Nedbank and ETI assisted a
  number of SA-based corporates with currency solutions in a challenging Nigerian market. We have strengthened our
  board representation and have increased our involvement in the group. In April 2017 ETI proposed a
  convertible-bond issue of up to US$400m at a conversion price of US$0,06, with an interest rate of 6,46% above
  LIBOR. US$200m of this issue was used to establish a resolution vehicle for the more effective management of
  capital and ringfencing of its legacy loans in Nigeria to improve transparency of the NPLs and turnaround the
  Nigerian business. The remaining US$200m was for the debt restructure of the maturity profile of the ETI holding
  company balance sheet. Nedbank did not participate in the issue as it did not meet our internal hurdle rates.
  However, the convertible bond is anticipated to be fully subscribed and underwritten. We are pleased that ETI
  reported a profit for the first quarter of 2017 and that the market value of Nedbank's investment in ETI at 30
  June 2017, based on its quoted share price - albeit in illiquid markets, had increased by 24,9% since 31 December
  2016 to R3,0bn, in line with our carrying value of R3,1bn. While risk remains, economic conditions in Nigeria and
  the outlook for ETI are improving.
- In SADC and East Africa we are building scale and optimising costs. Our core banking system, Flexcube, has now
  been successfully rolled out in four countries, we launched a number of new digital products and we continue to
  grow our distribution footprint. 

Old Mutual plc managed separation

OM plc announced on 25 May 2017 that it intends to list a new SA holding company on the JSE with a secondary listing on
the LSE, which will be named Old Mutual Limited and will initially comprise Old Mutual Emerging Markets, the group's
Nedbank shareholding, as well as OM plc, which will become a subsidiary of Old Mutual Limited. The managed separation is
expected to be materially complete by the end of 2018 and the listing of Old Mutual Limited is anticipated to take place
at the earliest opportunity in 2018, following OM plc’s 2017 full-year results announcement.

The subsequent distribution of a significant proportion of the shareholding in Nedbank from Old Mutual Limited will
follow in due course at an appropriate time, and in an orderly manner, as previously announced. Old Mutual Limited will
retain an appropriate strategic minority shareholding in Nedbank to underpin the ongoing commercial relationship.

For Nedbank it is business as usual and OM plc's decision will have no impact on the strategy, the day-to-day management
or operations, nor our staff and clients. Our engagements have been at arm’s length, overseen by independent board
structures. OM plc operates predominantly in the investment, savings and insurance industry, which has little overlap
with banking, however we compete in the areas of wealth and asset management and personal loans. Our technology systems,
brands and businesses have not been integrated.

Our collaboration with OM plc to unlock R1,0bn of synergies by the end of 2017 from the OM plc businesses in SA, remains
on track and will continue to be underpinned by Old Mutual Limited's strategic shareholding of Nedbank Group. We are
fully committed to working with Old Mutual Limited to deliver ongoing synergistic benefits on an arm’s length basis.

Economic outlook

The International Monetary Fund currently expects global economic growth to improve to 3,5% in 2017, with advanced
countries growing at 2,0% and emerging and developing economies by 4,5%. Growth in sub-Saharan Africa is expected to
accelerate to 2,1% in 2017 from 1,4% in 2016. 

Given SA's weaker-than-expected growth in the first half, Nedbank Group's current forecast for growth in 2017 is 0,6%,
with risk to growth on the downside. Inflation is expected to be contained within SARB’s inflation target range and, as
a result, interest rates could decline by a further 25 bps in September, following the 25 bps rate cut in July 2017.

Much depends on how the political and policy landscapes unfold in the period to December 2017, and the implications
thereof for the country's sovereign risk ratings. With sovereign risk ratings remaining unchanged, the end of the
drought, a stronger world economy and marginally firmer commodity prices should support cyclical recoveries in
export-orientated industries, particularly agriculture, mining and manufacturing. Corporate credit demand should benefit
from recoveries in these sectors, but the risk remains that long-term investments could be delayed by continued
political and policy uncertainty, low confidence and challenging operating conditions.

Households will remain vulnerable, with job losses more prevalent and lower prospects of wage growth. Household credit
demand is anticipated to remain subdued as consumers postpone buying new homes and vehicles, and instead save and/or
reduce debt levels. 

Government spending should be kept in check by the need to reduce the budget deficit and contain the rise in government
debt to avoid a further sovereign-ratings downgrade. In this regard improved management of state-owned enterprises is
necessary.

Despite the many challenges faced by the SA economy, the SA banking system remains sound, liquid and well capitalised.
This strength was once again acknowledged by the World Economic Forum, which ranked SA banks at second highest for
soundness of banks, and by Standard & Poor’s, which stated in its report published on 19 July 2017 that there are good
governance and transparency across the SA financial system, that regulation is in line with international best
practices, and that SA banks have top-tier banking stability and risk management. This creates low credit losses and
strong profitability with low levels of external banking sector debt. The risk of short-term concentrated funding is
mitigated by the closed SA rand system.

Prospects

In light of the weak economic outlook in SA we have revised our guidance on financial performance for the full year 2017
as follows: 

- Average interest-earning banking assets to grow below nominal GDP growth.
- NIM to be slightly above the 2016 rebased level of 3,54%. 
- CLR to increase from the level of 47 bps in the first half of 2017 towards the bottom end of our target range of
  60 to 100 bps.
- NIR, excluding fair-value adjustments, to grow at mid-single digits.
- Associate loss to be lower than the loss reported in the first half of 2017 (ETI associate income reported
  quarterly in arrear).
- Expenses to increase by mid-single digit levels.

Our financial guidance is for growth in DHEPS for the full 2017 year to be positive, but less than or equal to growth in
nominal GDP (consumer price index plus GDP growth). This has been revised from the guidance we provided at 28 February
2017 of growth in DHEPS for the full 2017 year to be greater than growth in nominal GDP.

The outlook for our medium-to-long-term targets in 2017 is as follows: 

Metric                                     June 2017     Full-year 2017outlook                         Medium-to-long-term targets
                                         performance
ROE (excluding goodwill)                       15,1%     Below target                                   5% above COE(5)
Growth in DHEPS                               (3,7%)     Below target                                   >- consumer price index + GDP growth + 5%
CLR                                            0,47%     Increases towards the bottom end of target     Between 0,6% and 1,0% of average banking
                                                         range                                          advances
NIR-to-expense ratio                           81,6%     Below target                                   > 85%
Efficiency ratio (including associate          59,3%     Above target                                   50,0 -53,0%
income)
CET1 capital adequacy ratio (Basel III)        12,3%     Within target                                  10,5 -12,5%

Economic capital                                         Internal Capital Adequacy Assessment Process (ICAAP):
                                                         A debt rating, including 10% capital buffer

Dividend cover                            1,80 times     Within target range                            1,75 -2,25 times

(5)   The COE is forecast at 13,8% in 2017.

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 leadership changes during the period

Tom Boardman and David Adomakoh resigned from the board as independent non-executive directors with effect from the end
of Nedbank Group's annual general meeting on Thursday, 18 May 2017.

Neo Dongwana and Linda Manzini were appointed as independent non-executive directors of the group with effect from 1
June 2017 and Hubert Brody with effect from 1 July 2017. 

Thulani Sibeko, Group Executive of Group Marketing, Communications and Corporate Affairs, resigned with effect from 27
June 2017. We have a deep pool of talent in Nedbank and the process to identify Thulani's replacement is well underway. 

Basis of preparation*

Nedbank Group Limited is a company domiciled in SA. The reviewed condensed consolidated interim financial results of the
group at and for the period ended 30 June 2017 comprise the company and its subsidiaries (the 'group') and the group's
interests in associates and joint arrangements.

The condensed consolidated interim financial statements comprise the condensed consolidated statement of financial
position at 30 June 2017, condensed consolidated statement of comprehensive income, condensed consolidated statement of
changes in equity and condensed consolidated statement of cashflows for the six months ended 30 June 2017 and selected
explanatory notes, which are indicated by the symbol*.  The condensed consolidated interim financial statements have
been prepared under the supervision of Raisibe Morathi CA (SA), the Chief Financial Officer.

The condensed consolidated interim financial statements are prepared in accordance with International Financial
Reporting Standard IAS 34 Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting
Practices Committee, Financial Pronouncements as issued by the Financial Reporting Standards Council and the
requirements of the Companies Act (Act No 71 of 2008) of South Africa. The accounting policies applied in the
preparation of these condensed consolidated interim financial statements are in terms of International Financial
Reporting Standards and are consistent with those of the previous annual financial statements. 

IFRS 9 Financial Instruments

The group is required to adopt IFRS 9 from 1 January 2018. IFRS 9 replaces IAS 39, addressing the classification and
measurement of financial assets and financial liabilities, the measurement of impairment provisions for amortised cost
and fair value through other comprehensive income financial assets and introduces more of a risk-management focus to the
hedge-accounting model.  

IFRS 9 is expected to impact the group’s balance sheet provisions and classification of certain of the group's financial
assets. The group does not expect the classification and measurement requirements to have a significant impact on the
group's financial position; however, this is subject to the business models in existence at 1 January 2018. From 1
January 2018 the group will recognise fair-value gains or losses due to changes in the group's own credit risk for
financial liabilities it designates as at fair value through profit or loss to be presented in other comprehensive
income. However, the group does not expect to change the manner in which it calculates these fair-value gains or losses
due to changes in the group's own credit risk, which it has previously disclosed in its financial statements.

The group's IFRS 9 parallel run is progressing well and we continue to expect that the transitional increase in balance
sheet provisions on 1 January 2018 will not have a significant impact on our capital adequacy levels, because the
increase in balance sheet provisions will be partially offset by a decrease in the excess of downturn expected loss over
IAS 39 provisions regulatory deduction from CET1 capital. The group's excess of downturn expected loss over IAS 39
provisions regulatory deduction at 30 June 2017 was R1,9bn (December 2016: R1,5bn).

The group is considering its accounting policy choice as to whether to continue IAS 39 hedge accounting or to move to
the new IFRS 9 hedge-accounting model. This accounting policy choice is not expected to have a significant impact on the
group's existing fair-value hedges; however, the group may replace its current accounting practice to designate
financial assets and financial liabilities as at fair value through profit or loss because of the accounting mismatch
that arises from its economic hedging activities with IAS 39 or IFRS 9 hedge accounting.

In line with the requirements of IFRS 9, the group plans not to restate its comparative financial statements.
Accordingly, the transitional increase in balance sheet provisions and classification and measurement changes will be
recognised, net of related taxation, in equity at 1 January 2018.  

Events after the reporting period*

There are no material events after the reporting period to report on.

Reviewed condensed consolidated interim financial statements  - independent auditors' conclusion

The condensed consolidated interim financial statements for the period ended 30 June 2017 have been reviewed by KPMG Inc
and Deloitte & Touche, who expressed an unmodified review conclusion thereon.

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

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
political and 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 an interim dividend of 610 cents per ordinary share has been declared, payable to
shareholders for the six months ended 30 June 2017. The dividend has been declared out of income reserves. 

The dividend will be subject to a dividend withholding tax rate of 20% (applicable in SA) or 122 cents per ordinary
share, resulting in a net dividend of 488 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. The dividend withholding
tax rate increased from 15% to 20% on 22 February 2017.

Nedbank Group's tax reference number is 9375/082/71/7 and the number of ordinary shares in issue at the date of
declaration is 498 108 914.

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

Event                                               Date
Last day to trade (cum dividend)                    Tuesday, 5 September 2017
Shares commence trading (ex dividend)               Wednesday, 6 September 2017
Record date (date shareholders recorded in books)   Friday, 8 September 2017
Payment date                                        Monday, 11 September 2017

Share certificates may not be dematerialised or rematerialised between Wednesday, 6 September 2017, and Friday, 8
September 2017, both days inclusive. 

On Monday, 11 September 2017, 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, 11
September 2017.

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

2 August 2017

Registered office
Nedbank Group Limited, Nedbank 135 Rivonia Campus, 135 Rivonia Road, Sandown, Sandton, 2196.

PO Box 1144, Johannesburg, 2000.

Transfer secretaries in SA
Computershare Investor Services Proprietary Limited 15 Biermann Avenue, Rosebank, Johannesburg, 2196, SA.
PO Box 61051, Marshalltown, 2107, SA.

Transfer secretaries in Namibia
Transfer Secretaries (Proprietary) Limited, Robert Mugabe Avenue No 4, Windhoek, Namibia.

PO Box 2401, Windhoek, Namibia.

Directors
V Naidoo (Chairman), MWT Brown** (Chief Executive), HR Brody, BA Dames, NP Dongwana, ID Gladman (British), JB Hemphill,
EM Kruger, RAG Leith, PM Makwana, L Manzini, 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 Proprietary Limited
                      Nedbank CIB
Sponsor in Namibia:   Old Mutual Investment Services (Namibia) (Proprietary) Limited

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.

Financial highlights
at
                                                                                                     30 Jun     30 Jun    31 Dec
                                                                           Change                      2017       2016      2016
                                                                              (%)                (Reviewed) (Reviewed) (Audited)
Statistics
Number of shares listed                                                                      m       498,1       495,9     495,9
Number of shares in issue, excluding shares held by group entities                           m       481,5       478,3     478,4
Weighted-average number of shares                                                            m       479,9       478,0     477,8
Diluted weighted-average number of shares                                                    m       488,9       485,0     487,9
Preprovisioning operating profit                                            (5,7)           Rm       9 047       9 593    20 004
Economic profit(1)                                                          (3,7)           Rm         393         408     1 565
Headline earnings per share                                                 (3,3)        cents       1 098       1 135     2 400
Diluted headline earnings per share                                         (3,7)        cents       1 078       1 119     2 350
Ordinary dividends declared per share                                         7,0        cents         610         570     1 200
Interim                                                                       7,0        cents         610         570       570
Final                                                                                    cents                               630
Ordinary dividends paid per share                                            10,5        cents         630         570     1 140
Dividend cover                                                                           times        1,80        1,99      2,00
Net asset value per share                                                     2,4        cents      16 200      15 826    15 830
Tangible net asset value per share                                            1,1        cents      14 007      13 853    13 723
Closing share price                                                          12,0        cents      20 879      18 640    23 813
Price/earnings ratio                                                                historical         9,4         8,2       9,9
Market capitalisation                                                        12,6          Rbn       104,0        92,4     118,1
Number of employees (permanent staff)(1)                                      1,4                   32 349      31 915    32 401
Number of employees (permanent and temporary staff)(1)                        0,4                   32 645      32 522    32 746
Key ratios (%)
ROE1(1)                                                                                               14,0        14,6      15,3
ROE, excluding goodwill(1)                                                                            15,1        15,7      16,5
Return on tangible equity(1)                                                                          16,2        16,8      17,6
ROA(1)                                                                                                1,10        1,19      1,23
Return on average risk-weighted assets(1)                                                             2,07        2,12      2,23
Net interest income to average interest-earning banking assets(1)                                     3,58        3,37      3,41
Credit loss ratio  - banking advances(1)                                                               0,47        0,67      0,68
Gross operating income growth rate less expense growth rate (jaws ratio)                             (3,9)       (2,6)     (1,5)
Non-interest revenue to total operating expenses                                                      81,6        83,0      82,9
Non-interest revenue to total income                                                                  46,4        46,6      47,1
Efficiency ratio                                                                                      59,3        57,1      56,9
Effective taxation rate                                                                               28,0        25,8      24,9
Group capital adequacy ratios (including unappropriated profits):(1)
- Common-equity tier 1                                                                                12,3        11,6      12,1
- Tier 1                                                                                              13,2        12,5      13,0
- Total                                                                                               15,7        14,5      15,3
Statement of financial position statistics (Rm)
Total equity attributable to equity holders of the parent                     3,0                   78 004      75 697    75 733
Total equity                                                                  4,7                   84 659      80 886    81 711
Amounts owed to depositors                                                    2,8                  762 712     741 712   761 542
Loans and advances                                                            2,4                  709 864     693 332   707 077
Gross                                                                         2,4                  721 910     704 871   719 226
Impairment of loans and advances                                              4,4                 (12 046)    (11 539)  (12 149)
Total assets administered by the group                                        5,1                1 261 153   1 200 513 1 239 349
Total assets                                                                  2,3                  965 830     944 188   966 022
Assets under management                                                      15,2                  295 323     256 325   273 327
Life insurance embedded value(1)                                            (9,8)                    2 805       3 110     2 740
Life insurance value of new business(1)                                    (14,0)                      148         172       399

(1)   These metrics have not been audited or reviewed by the group's auditors.

Reviewed condensed consolidated interim financial statements for the period ended 30 June 2017

Condensed consolidated
statement of comprehensive income
for the period ended
                                                                                                                 30 Jun     30 Jun    31 Dec
                                                                                                                   2017       2016      2016
                                                                                                    Change   (Reviewed) (Reviewed) (Audited)
                                                                                                       (%)           Rm         Rm        Rm
Interest and similar income                                                                           12,5       37 364     33 212    73 395
Interest expense and similar charges                                                                  18,0       23 816     20 184    46 969
Net interest income                                                                                    4,0       13 548     13 028    26 426
Impairments charge on loans and advances                                                            (27,9)        1 594      2 211     4 554
Income from lending activities                                                                        10,5       11 954     10 817    21 872
Non-interest revenue                                                                                   3,3       11 730     11 357    23 503
Operating income                                                                                       6,8       23 684     22 174    45 375
Total operating expenses                                                                               5,0       14 369     13 686    28 366
Indirect taxation                                                                                      1,7          474        466       927
Profit from operations before non-trading and capital items                                           10,2        8 841      8 022    16 082
Non-trading and capital items                                                                        <-100         (31)          4   (1 363)
Profit from operations                                                                                 9,8        8 810      8 026    14 719
Share of losses of associate companies and joint arrangements                                         >100      (1 053)      (431)     (105)
Profit before direct taxation                                                                          2,1        7 757      7 595    14 614
Total direct taxation                                                                                 12,0        2 178      1 944     3 955
Direct taxation                                                                                                   2 182      1 955     3 985
Taxation on non-trading and capital items                                                                           (4)       (11)      (30)

Profit for the period                                                                                (1,3)       5 579       5 651    10 659
Other comprehensive losses net of taxation                                                          (95,8)        (83)     (1 956)   (3 941)
Items that may subsequently be reclassified to profit or loss
Exchange differences on translating foreign operations                                                           (566)     (1 221)   (1 902)
Share of other comprehensive losses of investments accounted for using the equity method                            64       (745)   (1 688)
Fair-value adjustments on available-for-sale assets                                                                  1        (38)      (73)
Items that may not subsequently be reclassified to profit or loss
Gains on property revaluations                                                                                       3          3         32
Remeasurements on long-term employee benefit assets                                                                138         58      (297)
Share of other comprehensive (losses)/income of investments accounted for using the equity method                  277       (13)       (13)

Total comprehensive income for the period                                                             48,7       5 496      3 695      6 718
Profit attributable to:
 - Equity holders of the parent                                                                      (3,6)       5 244      5 442     10 132
 - Non-controlling interest  - ordinary shareholders                                                  15,6          37         32         88
 - Non-controlling interest  - preference shareholders                                               (1,1)         175        177        361
 - Non-controlling interest - additional tier 1 capital instrument noteholders                                     123                    78
Profit for the period                                                                                (1,3)       5 579      5 651     10 659
Total comprehensive income attributable to:
 - Equity holders of the parent                                                                       46,6       5 131      3 500      6 183
 - Non-controlling interest  - ordinary shareholders                                                  >100          67         18         96
 - Non-controlling interest  - preference shareholders                                               (1,1)         175        177        361
 - Non-controlling interest - additional tier 1 capital instrument noteholders                                     123                    78
Total comprehensive income for the period                                                             48,7       5 496      3 695      6 718
Basic earnings per share (cents)                                                                     (4,0)       1 093      1 138      2 121
Diluted earnings per share (cents)                                                                   (4,4)       1 073      1 122      2 077

Condensed consolidated
statement of financial position
at
                                                                                                                 30 Jun     30 Jun    31 Dec
                                                                                                                   2017       2016      2016
                                                                                                    Change   (Reviewed) (Reviewed) (Audited)
                                                                                                       (%)           Rm         Rm        Rm
Assets
Cash and cash equivalents                                                                           (13,1)      19 314      22 232    26 384
Other short-term securities                                                                           10,6      90 741      82 033    84 679
Derivative financial instruments                                                                     (5,5)      18 727      19 819    17 633
Government and other securities                                                                      (5,2)      49 306      51 996    51 048
Loans and advances                                                                                     2,4     709 864     693 332   707 077
Other assets                                                                                         (7,1)      10 691      11 505    14 077
Current taxation assets                                                                             (87,3)         159       1 253       574
Investment securities                                                                                 20,6      15 980      13 254    14 225
Non-current assets held for sale                                                                      >100         592           3       287
Investments in private-equity associates, associate companies and joint arrangements                (25,1)       5 965       7 968     6 567
Deferred taxation assets                                                                            (57,1)         145         338       494
Investment property                                                                                 (32,3)          21          31        22
Property and equipment                                                                               (3,0)       8 644       8 908     8 969
Long-term employee benefit assets                                                                      4,6       5 563       5 317     5 203
Mandatory reserve deposits with central banks                                                         16,7      19 556      16 759    18 700
Intangible assets                                                                                     11,9      10 562       9 440    10 083
Total assets                                                                                           2,3     965 830     944 188   966 022
Equity and liabilities
Ordinary share capital                                                                                 0,8         482         478       478
Ordinary share premium                                                                                 3,5      18 698      18 062    18 043
Reserves                                                                                               2,9      58 824      57 157    57 212
Total equity attributable to equity holders of the parent                                              3,0      78 004      75 697    75 733
Non-controlling interest attributable to:
 - Ordinary shareholders                                                                              83,1         811         443       756
 - Preference shareholders                                                                                       3 222       3 222     3 222
 - Additional tier 1 capital instrument noteholders                                                   72,0       2 622       1 524     2 000
Total equity                                                                                           4,7      84 659      80 886    81 711
Derivative financial instruments                                                                    (33,6)      13 011      19 587    13 296
Amounts owed to depositors                                                                             2,8     762 712     741 712   761 542
Provisions and other liabilities                                                                    (12,3)      24 728      28 208    34 667
Current taxation liabilities                                                                        (53,0)         174         370       214
Deferred taxation liabilities                                                                       (33,8)       1 089       1 646       804
Long-term employee benefit liabilities                                                                12,1       3 561       3 177     3 448
Investment contract liabilities                                                                       31,4      17 405      13 245    15 342
Insurance contract liabilities                                                                      (28,1)       2 553       3 552     2 922
Long-term debt instruments                                                                             8,0      55 938      51 805    52 076
Total liabilities                                                                                      2,1     881 171     863 302   884 311
Total equity and liabilities                                                                           2,3     965 830     944 188   966 022

Condensed consolidated
statement of changes in equity
                                                                                                            Non-controlling
                                                                                                                   interest
                                                           Total equity   Non-controlling Non-controlling      attributable
                                                           attributable          interest        interest     to additional
                                                              to equity      attributable    attributable    tier 1 capital
                                                                holders       to ordinary   to preference        instrument
                                                          of the parent      shareholders    shareholders       noteholders    Total equity
                                                                     Rm                Rm              Rm                Rm              Rm
Audited balance at 31 December 2015                              74 754               436           3 561                            78 751
Additional tier 1 capital instruments                                                                                1 524            1 524
issued
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                           218                            (339)                              (121)
entities and BEE trusts
Total comprehensive income for the year                           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
Additional tier 1 capital instruments                                                                                  476              476
issued
Dividend to shareholders                                        (2 781)                                                             (2 781)
Additional tier 1 capital instruments                                                                                 (78)             (78)
interest paid
Preference share dividend                                                                          (184)                              (184)
Shares (acquired)/no longer held by group                          (19)                                                                (19)
entities and BEE trusts
Total comprehensive income for the year                           2 683                78            184                78            3 023
Share-based payment reserve movement                                381                                                                 381
Acquisition of shareholding in subsidiary                                             239                                               239
Transactions with non-controlling                                 (223)                                                               (223)
shareholders
Buyout of non-controlling interests                                                   (6)                                               (6)
Regulatory risk reserve provision                                   (8)                 2                                               (6)
Other movements                                                       3                                                                   3
Audited balance at 31 December 2016                              75 733               756          3 222             2 000           81 711
Additional tier 1 capital instruments                                                                                  600              600
issued
Dividend to shareholders                                        (3 109)              (12)                                           (3 121)
Additional tier 1 capital instruments                                                                                (101)            (101)
interest paid
Preference share dividend                                                                          (175)                              (175)
Issues of shares net of expenses                                    687                                                                 687
Shares (acquired)/no longer held by group                          (61)                                                                (61)
entities and BEE trusts
Total comprehensive income for the year                           5 131                67            175               123            5 496
Share-based payment reserve movement                              (391)                                                               (391)
Other movements                                                      14                                                                  14
Reviewed balance at 30 June 2017                                 78 004               811          3 222             2 622           84 659
                                          

Condensed consolidated
statement of cashflows
for the period ended
                                                                                                                30 Jun     30 Jun    31 Dec
                                                                                                                  2017       2016      2016
                                                                                                            (Reviewed) (Reviewed) (Audited)
                                                                                                                    Rm         Rm        Rm
Cash generated by operations                                                                                    12 565     12 271    24 827
Change in funds for operating activities                                                                      (14 248)   (15 902)  (15 473)
Net cash (utilised by)/from operating activities before taxation                                               (1 683)    (3 631)     9 354
Taxation paid                                                                                                  (1 851)    (2 692)   (5 065)
Cashflows (utilised by)/from operating activities                                                              (3 534)    (6 323)     4 289
Cashflows utilised by investing activities                                                                     (3 543)      (288)   (3 004)
Cashflows from financing activities                                                                              1 081      5 859     3 536
Effects of exchange rate changes on opening cash and cash equivalents (excluding foreign borrowings)             (218)        671     1 191
Net (decrease)/increase in cash and cash equivalents                                                           (6 214)       (81)     6 012
Cash and cash equivalents at the beginning of the period(1)                                                     45 084     39 072    39 072
Cash and cash equivalents at the end of the period(1)                                                           38 870     38 991    45 084

(1)   Including mandatory reserve deposits with central banks.

Notes to the reviewed condensed consolidated interim financial statements for the period ended 30 June 2017*

Condensed consolidated
segmental reporting
for the period ended 
                         30 Jun       30 Jun    31 Dec      30 Jun       30 Jun    31 Dec     30 Jun     30 Jun     31 Dec     30 Jun     30 Jun     31 Dec
                           2017         2016      2016        2017         2016      2016       2017       2016       2016       2017       2016       2016
                     (Reviewed)   (Reviewed) (Audited)  (Reviewed)   (Reviewed) (Audited) (Reviewed) (Reviewed)  (Audited) (Reviewed) (Reviewed)  (Audited)
                             Rm           Rm        Rm          Rm           Rm        Rm         Rm         Rm         Rm         Rm         Rm         Rm
                                    Total assets                   Total liabilities                   Revenue1                  Headline earnings/(losses)
Nedbank Corporate       479 359      476 225   491 480     448 288      447 896   463 018      6 997      7 190     14 744      3 211      3 004      6 014
and Investment
Banking
Nedbank Retail and      311 490      296 492   304 842     284 075      270 452   278 588     14 780     14 250     29 071      2 544      2 371      4 960
Business Banking
Nedbank Wealth           66 621       62 668    62 042      62 857       59 223    58 655      2 150      2 271      4 384        519        614      1 192
Rest of Africa           35 623       32 734    36 189      28 835       25 447    28 247      1 201        776      1 890    (1 092)      (550)      (287)
Centre                   72 737       76 069    71 469      57 116       60 284    55 803        150      (102)      (160)         89       (12)      (414)
Total                   965 830      944 188   966 022     881 171      863 302   884 311     25 278     24 385     49 929      5 271      5 427     11 465

(1) Revenue is calculated as net interest income plus non-interest revenue.

Headline earnings reconciliation
for the period ended
                                                                              30 Jun          30 Jun     30 Jun          30 Jun    31 Dec            31 Dec
                                                                                2017            2017       2016            2016      2016              2016
                                                                          (Reviewed)      (Reviewed) (Reviewed)      (Reviewed) (Audited)         (Audited)
                                                                 Change           Rm              Rm         Rm              Rm        Rm                Rm
                                                                    (%)        Gross Net of taxation      Gross Net of taxation     Gross   Net of taxation
Profit attributable to equity holders of the parent               (3,6)                        5 244                      5 442                      10 132
Non-trading and capital items                                     <-100           31              27        (4)            (15)     1 363             1 333
IFRS 3: Fair-value loss on remeasurement of previously held                                                                            15                15
interest
IAS 16: Loss on disposal of property and equipment                               16              12          3               2         44               44
IAS 21: Recycled foreign currency translation loss - Banco                                                                            203              203
Único, SA
IAS 28: Loss on dilution of shareholding in ETI                                                                                        17               17
IAS 28: Impairment provision for ETI                                                                                                1 000            1 000
IAS 38/IAS 39: Impairment of intangible and available-for-sale                                              35              25        141               99
assets
IAS 39: Loss/(Profit) on sale of available-for-sale financial                    15              15       (48)            (48)       (63)             (51)
assets
IAS 40: Loss on disposal of investment properties                                                            6               6          6                6

Headline earnings                                                 (2,9)                       5 271                      5 427                      11 465

Contingent liabilities and commitments

Contingent liabilities and undrawn facilities
at
                                                     30 Jun     30 Jun      31 Dec
                                                       2017       2016        2016
                                                 (Reviewed) (Reviewed)   (Audited)
                                                         Rm         Rm          Rm
Guarantees on behalf of clients                      20 839     38 768      16 316
Letters of credit and discounting transactions        3 545      2 907       3 432
Irrevocable unutilised facilities and other          95 273     96 041     103 163
                                                    119 657    137 716     122 911

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

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

Commitments

Capital expenditure approved by directors
at
                                                  30 Jun       30 Jun      31 Dec
                                                    2017         2016        2016
                                              (Reviewed)   (Reviewed)   (Audited)
                                                      Rm           Rm          Rm
Contracted                                           402          818         522
Not yet contracted                                 2 320        1 850       2 092
                                                   2 722        2 668       2 614

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
                                                     2017        2016        2016
                                               (Reviewed)  (Reviewed)   (Audited)
                                                       Rm          Rm          Rm
Listed associates(1)                                3 083       6 014       3 978
Unlisted associates                                 2 675       1 588       2 467
Unlisted joint arrangements                           207         366         122
                                                    5 965       7 968       6 567

(1) The group's investment in ETI is recorded under listed associates.

Listed associates: ETI
Carrying value                                      3 083       6 014       3 978
Fair value of investment                            3 045       4 350       2 438

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 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 (directly or indirectly) on 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                   Total financial assets               Total financial assets             Total financial assets          Total financial assets
                                                       recognised 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
                   2017         2016        2016         2017       2016       2016         2017         2016         2016           2017        2016         2016         2017        2016          2016
             (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         38 870       38 991      45 084       38 870     38 991     45 084
cash
equivalents
Other            90 741        82 033     84 679       27 811     35 754     33 184           33          754          488         62 897      45 525       51 007
short-term
securities
Derivative       18 727        19 819     17 633                                             103          450           49         18 596      19 350       17 547           28          19           37
financial
instruments
Government       49 306        51 996     51 048       29 046     20 369     22 393        8 918       21 193       15 881         11 342      10 434       12 774
and other
securities
Loans and       709 864       693 332    707 077      625 987    608 456    627 541        2 550           42        2 436         81 205      84 801       77 023          122          33           77
advances(1) (2)
Other assets     10 691        11 505     14 077        6 887      6 016      9 533        3 804        5 489        4 544
Investments       2 641         1 440      2 357                                                                                                                          2 641       1 440        2 357
in 
private-equity
associates,
associate
companies
and joint
arrangements
Investment       15 980        13 254     14 225                                              31           54           35         14 766      12 540       13 098        1 183         660        1 092
securities
                936 820       912 370    936 180      728 601   709 586     737 735       15 439       27 982       23 433        188 806     172 650      171 449        3 974       2 152        3 563

(1) Loans and advances of R13 580m (June 2016: R9 431m) were included in the previous year as held-for-trading assets, whereas these instruments were classified and
    measured as financial assets at amortised cost. Accordingly, the held-for-trading and financial assets at amortised cost categories have been restated to
    reflect the correct classification.
(2) Loans and advances of R3 103m (June 2016: R4 687m) were included in the previous year as designated at fair value through profit or loss, whereas these
    instruments were classified and measured as financial assets at amortised cost. Accordingly, the designated at fair value through profit or loss and financial
    assets at amortised cost categories have been restated to reflect the correct classification.

Financial liabilities

               Total financial liabilities         Total financial liabilities             Total financial liabilities     Total financial liabilities     Total financial liabilities
                                                  recognised 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
                 2017         2016       2016         2017         2016        2016          2017      2016       2016           2017        2016        2016         2017        2016        2016
           (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     13 011       19 587     13 296                                                  53       197         81         12 958      19 262      13 215                      128
 
financial
instruments
Amounts       762 712      741 712    761 542      689 397      582 258     694 837                                            73 315     159 454      66 705
owed to
depositors(3)
Provisions     23 191       28 208     33 267       11 533       10 237      11 738         11 264    17 748    20 810                        223         389          394                     330
and other
liabilities
Investment     17 405       13 245     15 342                                                                                  17 405      13 245      15 342
contract
liabilities
Long-term      55 938       51 805     52 076       55 649       51 372      51 775                      168                      289         265         301
debt
instruments
              872 257      854 557    875 523      756 579      643 867     758 350         11 317    18 113    20 891        103 967     192 449      95 952         394         128          330

(3) Amounts owed to depositors of R9 329m (June 2016: R9 818m) were included in the previous year as designated at fair value through profit or loss, whereas these
    instruments were classified and measured as financial liabilities at amortised cost. Accordingly, the designated at fair value through profit or loss and
    financial liabilities at amortised cost categories have been restated to reflect the correct classification.

Level 3 reconciliation

30 June 2017                                 Opening        Gains/              Gains/    Purchases     Sales and   Transfers    Closing balance at
(Reviewed)                                   balance      (Losses)   (Losses) in other          and   settlements    in/(out)                31 Dec
                                                  at     in profit      compre-hensive       issues            Rm          Rm                    Rm
                                               1 Jan       for the      income for the           Rm
                                                  Rm        period              period
                                                                Rm                  Rm
Financial assets
Derivative financial                              37             9                                           (18)                                28
instruments
Loans and advances                                77            45                                                                              122
Investment securities                          1 092           (6)                   2           83           (3)          15                 1 183
Investments in                                 2 357          (46)                              439         (109)                             2 641
private-equity
associates, associate
companies and
joint arrangements
                                               3 563             2                   2          522         (130)          15                 3 974
Financial liabilities
Provisions and other                             330            64                                                                              394
liabilities
                                                 330            64                   -            -             -           -                   394

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

31 December 2016 (Audited)                  Opening           Gains/     Gains/(Losses) in other    Purchases     Sales and   Transfers      Closing
                                         balance at      (Losses) in   compre-hensive income for   and issues   settlements    in/(out)   balance at
                                              1 Jan   profit for the                    the year           Rm            Rm          Rm       31 Dec
                                                 Rm             year                          Rm                                                  Rm
                                                                  Rm
Financial assets
Derivative financial instruments                18               19                                                                               37
Loans and advances                              33                4                                                                  40           77
Investment securities                          691             (28)                                        53          (34)         410        1 092
Investments in private-equity                1 162              273                                     1 130         (208)                    2 357
associates, associate companies
and
joint arrangements
                                             1 904              268                            -        1 183         (242)         450        3 563
Financial liabilities
Derivative financial instruments                86              (8)                                                    (78)                        -
Provisions and other liabilities                                 32                                       298                                    330
                                                86               24                            -          298          (78)           -          330

Effect of changes in significant unobservable assumptions to 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.

                      Valuation technique     Significant                                  Variance          Value per   Favourable   Un-favourable change
                                              unobservable input                            in fair          statement    change in          in fair value
                                                                                              value                 of   fair value
                                                                                                             financial
                                                                                                              position
30 June 2017                                                                                      %                 Rm           Rm                     Rm
(Reviewed)
Financial assets
Derivative            Discounted cashflows    Discount rates,                Between (11,5) and 9,0                 28            3                    (3)
financial                                     earnings before       
instruments                                   interest, tax and              
                                              depreciation and
                                              amortisation
Loans and advances    Discounted cashflows    Credit spreads and            Between (11,5)  and 9,0                122           11                   (14)
                                              discount rates                 
                                                                    
Investment            Discounted cashflows,   Valuation multiples,           Between (11,5) and 9,0              1 183          108                  (136)
securities            adjusted net asset      correlations,                  
                      value, earnings         volatilities and               
                      multiples,              credit spreads
                      third-party
                      valuations, dividend
                      yields
Investments in        Discounted cashflows,   Valuation multiples            Between (11,5) and 9,0              2 641          240                  (303)
private-equity        earnings multiples                             
associates,                                                          
associate companies
and joint arrangements
Total financial                                                                                                  3 974          362                  (456)
assets classified
as level 3
Financial
liabilities
Provisions and        Discounted cash flow,    Discount                      Between (10,0) and 10,0              (394)          39                   (39)
other liabilities     earnings multiples       rates,                       
                                               forecasts                    

                              Valuation technique                     Significant          Variance                 Value      Favourable      Un-favourab
                                                                      unobservable               in                   per          change        le change
                                                                      input                    fair             statement         in fair          in fair
                                                                                              value                    of           value            value
                                                                                                                financial                                 
                                                                                                                 position
30 June 2016                                                                                      %                    Rm              Rm               Rm
(Reviewed)
Financial assets
Derivative                    Discounted-cashflow                     Discount rates,     Between (12) and 10         19               2              (2)
financial                     model,                                  risk-free rates,    
instruments                   Black-Scholes                           volatilities,
                              model and                               credit spreads
                              multiple                                and valuation
                              valuation                               multiples
                              techniques
Loans and advances            Discounted-cashflow                     Credit spreads      Between (12) and 10          33               3              (4)
                              model                                                       
Investment                    Discounted                              Valuation           Between (12) and 10         660              64             (81)
securities                    cashflows,                              multiples,          
                              adjusted net                            correlations,
                              asset value,                            volatilities and
                              earnings                                credit spreads
                              multiples,
                              third-party
                              valuations,
                              dividend yields
Investments in                Discounted                              Valuation multiples   Between (7) and 7       1 440             117            (132)
associate                     cashflows,                                                                                                 
companies and                 earnings
joint ventures                multiples
Total financial                                                                                                     2 152             186            (219)
assets                                                                                                                                  
classified as
level 3
Financial
liabilities
Derivative                    Discounted                              Growth rates,         Between (10) and 10     (128)              21             (28)
financial                     cashflows,                              cost of equity                                                              
instruments                   earnings                                and price to book                                                 
                              multiples

                              Valuation technique    Significant unobservable    Variance in fair        Value per   Favourable    Un-favourable
                                                     input                            value           statement of    change in   change in fair
                                                                                                         financial   fair value            value
                                                                                                          position
31 December 2016                                                                         %                      Rm          Rm               Rm
(Audited)
Financial assets
Derivative financial     Discounted cashflows        Discount rates, earnings   Between (12) and 9             37            3              (4)
instruments                                          before interest, tax, and 
                                                     depreciation and 
                                                     amortisation 
Loans and advances       Discounted cashflows        Credit spreads and         Between (12) and 9             77            7              (9)
                                                     discount rates
Investment securities    Discounted cashflows,       Valuation multiples,       Between (12) and 9          1 092          103            (129)
                         adjusted net asset value,   correlations,
                         earnings multiples,         volatilities and credit
                         third-party valuations,     spreads
                         dividend yields
Investments in           Discounted cashflows,       Valuation multiples        Between (12) and 9          2 357          222            (279)
private-equity           earnings multiples
associates, associate
companies and
joint arrangements
Total financial assets                                                                                      3 563          335            (421)
classified as level 3
Financial liabilities
Provisions and other     Discounted cash flow,       Discount rates,            Between (10) and 10         (330)         (33)               33
liabilities              earnings multiples          forecasts

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
                             2017        2016          2016
                       (Reviewed)  (Reviewed)     (Audited)
                               Rm          Rm            Rm
Private-equity gains            2         153           268

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

TRANSFERS BETWEEN LEVELS OF THE FAIR-VALUE HIERARCHY

In terms of the group's policy, transfers of financial instruments between levels of the fair-value hierarchy are deemed
to have occurred at the end of the reporting period.

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, 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 transferred, between market participants at the measurement date. The group’s
estimate of what fair value is does not necessarily represent what it would be able to sell the asset for or transfer
the respective financial liability for in an involuntary liquidation or distressed sale.

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

Rm                               Carrying value   Fair value    Level 1   Level 2   Level 3
30 June 2017 (Reviewed)
Financial assets                        682 844      674 976     23 914    32 648   618 414
Other short-term securities              27 810       27 812               27 812
Government and other securities          29 046       28 750     23 914     4 836
Loans and advances                      625 988      618 414                        618 414
Financial liabilities                    55 649       56 107     23 240    32 867          -
Long-term debt instruments               55 649       56 107     23 240    32 867

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
31 December 2016 (Audited)
Financial assets                        666 435      657 139     21 828    33 128   602 183
Other short-term securities              33 184       33 128               33 128
Government and other securities          22 393       21 828     21 828
Loans and advances                      610 858      602 183                        602 183
Financial liabilities                    51 775       48 894     20 432    28 462          -
Long-term debt instruments               51 775       48 894     20 432    28 462

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

Loans and advances  

Loans and advances that are not recognised at fair value, principally comprise variable-rate financial assets. The
interest rates on these variable rate-financial assets are adjusted when the applicable benchmark interest rate changes.

Loans and advances are not actively traded in most markets and it is therefore not possible to determine the fair value
of these loans and advances using observable market prices and market inputs. Due to the unique characteristics of the
loans and advances portfolio and the fact that there have been no recent transactions involving the disposals of such
loans and advances, there is no basis to determine a price that could be negotiated between market participants in an
orderly transaction. The group is not currently in the position of a forced sale of such underlying loans and advances
and it would therefore be inappropriate to value the loans and advances on a forced-sale basis.

For specifically impaired loans and advances the carrying value as determined after consideration of the group’s IAS 39
credit impairments is considered the best estimate of fair value.

The group has developed a methodology and model to determine the fair value of the gross exposures for the performing
loans and advances measured at amortised cost. This model incorporates the use of average interest rates and projected
monthly cashflows per product type. Future cashflows are discounted using interest rates at which similar loans would be
granted to borrowers with similar credit ratings and maturities. Methodologies and models are updated on a continuous
basis for changes in assumptions, forecasts and modelling techniques. Future forecasts of the group’s probability of
default (PDs) and loss given defaults (LGDs) for periods 2018 to 2020 (2016: for periods 2017 to 2019) are based on the
latest available internal data and is applied to the first three years’ projected cashflows.  Thereafter, PDs and LGDs
are gradually reverted to their long-run averages and are applied to the remaining projected cashflows.  Inputs into the
model include various assumptions utilised in the pricing of loans and advances. The determination of such inputs is
highly subjective and therefore any change to one or more of the assumptions may result in a significant change in the
determination of the fair value of loans and advances.

Government and other securities

The fair value of government and other securities is determined based on available market prices (level 1) or discounted
cashflow analysis (level 2), where an instrument is not quoted or the market is considered to be inactive. 

Other short-term securities

The fair value of other short-term securities is determined using a discounted cashflow analysis (level 2). 

Long-term debt instruments

The fair value of long-term debt instruments is determined based on available market prices (level 1) or discounted
cashflow analysis (level 2) where an instrument is not quoted or the market is considered to be inactive.

Amounts owed to depositors

The amounts owed to depositors principally comprise of variable-rate liabilities.  The carrying value of the amounts
owed to depositors approximates fair value because the instruments reprice to current market rates at frequent
intervals.  In addition, a significant portion of the balance is callable or is short term in nature.

Cash and cash equivalents, other assets, mandatory deposits with central banks and provisions and other liabilities

The carrying values of cash and cash equivalents, other assets, mandatory deposits with central banks and provisions and
other liabilities are considered a reasonable approximation of their respective fair values, as they are either short
term in nature or are repriced to current market rates at frequent intervals.  

Additional information

Liquidity coverage ratio
                                                                                                                 Total unweighted      Total weighted
                                                                                                                         value(1)            value(2)
Rm                                                                                                                      (average)           (average)

Total high-quality liquid assets                                                                                                              144 568

Cash outflows
Retail deposits and deposits from small-business clients                                                                 180 732               17 911
Stable deposits                                                                                                            3 227                  161
Less stable deposits                                                                                                     177 505               17 750
Unsecured wholesale funding                                                                                              246 302              128 187
Operational deposits (all counterparties) and deposits in institutional networks of                                      118 850               34 169
cooperative banks
Non-operational deposits (all counterparties)                                                                            127 148               93 714
Unsecured debt                                                                                                               304                  304
Secured wholesale funding                                                                                                 25 583                   32
Additional requirements                                                                                                   86 456               12 278
Outflows related to derivative exposures and other collateral requirements                                                   795                  795
Outflows related to loss of funding on debt products                                                                          64                   64
Credit and liquidity facilities                                                                                           85 597               11 419
Other contingent funding                                                                                                 188 258                9 468
obligations
Total cash outflows                                                                                                      727 331              167 876

Cash inflows
Secured lending (eg reverse repurchase agreements)                                                                         9 731                  125
Inflows from fully performing exposures                                                                                   40 419               26 397
Other cash inflows                                                                                                         7 625                7 571
Other cash inflows                                                                                                        57 775               34 093

                                                                                                                                                Total
                                                                                                                                             adjusted
                                                                                                                                                value
Total HQLA                                                                                                                                    144 568
Total net cash outflows3                                                                                                                      138 260
Liquidity coverage ratio (%)                                                                                                                   104,6%

(1)  Unweighted values are calculated as outstanding balances maturing or callable within 30 days (for inflows and outflows).
(2)  Weighted values are calculated after the application of respective haircuts (for HQLA) or inflow and outflow rates (for inflows and outflows).
(3)  Note that total cash outflows less total cash inflows may not be equal to total net cash outflows to the extent that regulatory caps have been applied to cash
    inflows as specified by the regulations.

The figures above reflect a simple average of daily observations over the quarter ending June 2017 for Nedbank Limited
and the simple average of the month-end values at 30 April 2017, 31 May 2017 and 30 June 2017 for all non-SA banking
entities, based on regulatory submissions to SARB. This section on the liquidity coverage ratio has not been
audited or reviewed by the group's auditors.

Date: 02/08/2017 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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