NEDBANK GROUP LIMITED - Unaudited Condensed Consolidated Interim Financial Results for the six months ended 30 June 2018

Release Date: 07/08/2018 07:05
 
Wrap Text
Unaudited Condensed Consolidated Interim Financial Results for the six months ended 30 June 2018

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

UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

Strong performance in a difficult environment

Nedbank Group delivered a strong performance in the first half of 2018, assisted
by our share of associate income from ETI as it returned to profitability, while our
managed operations delivered positive, but slower, earnings growth in line with
our expectations. Headline earnings of R6,7bn increased 27,0% and ROE (excluding
goodwill) improved to 18,4%. Slow revenue growth and a gradual increase in
impairments were offset by good cost management. We maintained a strong
balance sheet, as evident in our IFRS 9 fully phased-in CET1 ratio of 12,4% and the
interim dividend per share increasing by 13,9%. Total assets exceeded R1 trillion for
the first time.

Nedbank continues to make good progress in delivering market-leading client value
propositions and digital innovations. This focus has enabled us to increase our
total client base to over eight million for the first time, grow revenues and unlock
operating efficiencies. In the second half of 2018 we look forward to the launch
of more exciting innovations for clients. Our strategic enablers, including ongoing
technology investments, our people, our culture and our brand, are creating a more
client-focused, agile, competitive and digital Nedbank. 

Given the strong growth in diluted headline earnings per share in the first half
of 2018, together with expectations of a slowly improving economic outlook
and ongoing delivery on our strategy, our guidance for growth in diluted
headline earnings per share for 2018 remains unchanged, being in line with our
medium-to-long-term target of greater than or equal to GDP plus CPI plus 5%.

Mike Brown
Chief Executive

2018 interim results commentary

BANKING AND ECONOMIC ENVIRONMENT
Global economic conditions remained relatively robust in the
first half of 2018, despite persistent geopolitical tensions
and escalating trade disputes. Much of the momentum
came from strong growth in the US, boosted by rising
business and consumer confidence on the back of rapid job
creation and substantial tax relief. Activity elsewhere in the
developed world also expanded, albeit at a slightly softer
pace. The recovery in emerging and developing economies
also continued, with growth in India accelerating and China
proving resilient. This, coupled with firmer commodity prices,
supported the recovery in most commodity-producing
countries, including sub-Saharan Africa. However, the
escalating trade war between the world's largest economies
and the faster-than-expected normalisation of US monetary
policy started to hurt capital flows to emerging markets
during the second quarter, impacting the hardest on those
countries with political and structural vulnerabilities.

The SA economy started 2018 on a weaker note, despite the
generally constructive business sentiment around changes
in the country's political leadership. These changes include,
inter alia, actions taken to restore government's finances to
a more sustainable path, commitments to address policy
uncertainty, initiatives to investigate and root out corruption,
and reform of financially troubled and operationally crippled
state-owned enterprises (SOEs). Real GDP declined by
2,2% qoq in the first quarter, but the decline was partly
exaggerated by the high base established towards the end
of 2017, which included the upward revision of 2017 GDP
from 0,9% (expected) to 1,3% (actual). The weakness was
widespread, with sharpest declines recorded in agriculture,
mining, manufacturing and domestic trade. GDP growth on
Q1 2017 was up 0,8%. Consumer spending expanded further,
but at a much slower pace off the high base in 2017. Although
disposable income growth slowed, consumer confidence
improved in the first quarter, interest rates eased further in
March and the gradual recovery in household credit demand
continued. Household debt levels edged up slightly to 71,7% of
disposable income, but remain around levels last recorded early
in 2006.

Inflation increased from low levels as the hikes in VAT, excise
duties and fuel tax rates came into effect in April, but
remained contained and well within the SARB inflation target
range. The rand rallied in early 2018 on the back of optimistic
political, fiscal and ratings expectations. Moody's left both
SA's foreign and local currency debt ratings unchanged at one
notch above subinvestment grade, but changed the country's
ratings outlook from negative to stable. The other major
global rating agencies also left the country's sovereign-debt
ratings unchanged at just below investment grade. Given these
developments, SARB's Monetary Policy Committee cut the repo
rate by 25 basis points in March. However, underlying economic
conditions deteriorated over the second quarter. Fading global
risk appetite for emerging markets resulted in renewed rand
weakness and volatility, while slow progress in returning key
SOEs to operational efficiency and growing political pressure to
address inequality in land ownership, mining rights and access
to healthcare have fuelled increasing policy uncertainty among
investors and companies. Consequently, corporate demand for
credit weakened further in the first half of the year as the slump
in fixed-investment activity persisted. 

REVIEW OF RESULTS
Nedbank produced a strong performance in a domestic
macroeconomic environment that remained challenging and
volatile. HE increased 27,0% to R6 696m, boosted by associate
income from ETI's returning to profitability, while our managed
operations delivered positive, but slower, earnings growth from
a high base. This translated into an increase in DHEPS and
HEPS of 26,3% to 1 361 cents and 1 387 cents respectively, in line
with the 23% to 28% range set out in the trading statement
released on 26 July 2018. As in previous periods, we highlight
our results both including and excluding ETI (referred to as
managed operations) to provide a better understanding of
the operational performance of the business given the historic
volatility in ETI's results and the impact of a challenging SA
operating environment. We will revert to only group-level
reporting in 2019. Our managed operations produced
HE growth of 2,0% to R6 562m, with slow revenue growth and
slightly higher impairments offset by good cost management.

ROE (excluding goodwill) and ROE improved to 18,4% and 17,2%
respectively. ROE (excluding goodwill) in managed operations
was 18,3% and ROE was 17,1%. These ratios benefited from
the reduction in equity following the day one transitional
adjustments in respect of IFRS 9 and IFRS 15 of R3,2bn. On a
like for like basis excluding IFRS adjustments, ROE (excluding
goodwill) was 17,8% and in managed operations was 17,7%.
Total assets for the group exceeded the R1 trillion mark for the
first time. ROA increased 27 bps to 1,37% and return on RWA
increased from 2,07% to 2,48%.

Our IFRS 9 fully phased-in CET1 and tier 1 capital ratios of 12,4%
and 13,2% respectively, average LCR for the second quarter
of 106,9% and an NSFR of 116,4% are all Basel III-compliant
and are a reflection of a strong balance sheet. On the back of
strong earnings growth and a strong capital position an interim
dividend of 695 cents was declared, an increase of 13,9%.

DELIVERING SUSTAINABLY TO ALL OUR STAKEHOLDERS
Nedbank continues to play an important role in society and in the economy, 
and we remain committed to delivering on our purpose of using our financial 
expertise to do good and contributing to the societies in which we operate 
by delivering value to our staff, clients, shareholders, regulators and society.

For staff
We had 31 592 staffmembers in our employ, invested R270m in training
and paid salaries and benefits of R8,1bn. Our bargaining unit staff received
annual salary increases of 7,0%, ahead of inflation, and the blended average
staff salaries increased by 5,8%. As part of our People 2020 groupwide
programme aimed at transforming and aligning our culture and talent
with our strategic objectives, we refreshed our executive management
programmes to be more digitally focused, with more than 70 senior leaders
having participated in immersive learning experiences (the Executive
Business Transformation programme), with exposure to Silicon Cape,
Silicon Savannah (Kenya) and Silicon Valley. We implemented New Ways
of Work (NWoW) practices to transform Nedbank into a more agile
organisation, holistically rethinking the way we work, communicate and
manage talent on our journey to creating a high-performing culture. More
than 500 staffmembers are working according to this new approach and
we aim to increase this number to over 4 000 by June 2019. Transformation
remains a key imperative to ensure Nedbank remains relevant in a
transforming society and we have continued to focus on this across all
levels at Nedbank, from our board of directors to all our staffmembers.
Currently black representation at board is 59%, at executive is 46% and for
our total staff at more than 78%. Altogether 62% of our staff are female.
In recognition of our progress, Nedbank was recently announced as the
overall winner at the SA Board for People Practices Employment Equity,
Diversity and Transformation Awards.

For clients
We increased our total retail client numbers across the group to
8,0 million, with RBB main-banked clients growing 2,5% to 2,8 million,
supported by a 9,3% increase in main-banked clients in the middle market.
May 2018 BA900 market share data showed Nedbank either maintaining
or increasing its share of lending in home loans, vehicle finance, personal
loans, credit cards and core corporate loans. Similar trends were evident in
household deposits. Our clients' access to banking improved through our
network of 1 034 Intelligent Depositor devices and we increased the total
number of digitally focused branches to 346 or 57% of all outlets. Digitally
active and enabled clients grew as we launched new market-leading digital
innovations, with the new Nedbank Money app™ having been downloaded
one million times since its launch in November 2017. We supported our
clients by advancing R82bn (June 17: R76bn) of new loans in the first half
of 2018 to enable them to finance their homes, vehicles, education and to
grow their businesses. We safeguarded R801bn of deposits at competitive
rates. Our Net Promoter Score is second-highest among full-service
banks in SA. Nedbank's brand value increased 16% yoy and is now ranked
the ninth most valuable brand in SA (from 10th in 2017) as measured by
Brand Finance. In recognition of the market-leading innovations and CVPs
launched, Nedbank recently won the International Banker award for Best
Innovation in Retail Banking SA 2018 as well as the Banker Africas award
for Best Corporate Bank in SA. Nedgroup Investments maintained its
top-three ranking in offshore management companies in SA in the recent
PlexCrown Unit Trust Survey. The business is ranked the fourth-largest
unit trust manager and third-largest offshore unit trust manager in SA.
Nedbank Private Wealth won first place for philanthropic advice in SA in the
annual Euromoney Private Banking and Wealth Management Survey for
the fourth consecutive year. Internationally, Nedbank Private Wealth won
the award for Best UK Private Bank. In July 2018 Nedbank was selected by
SARB and the curator to provide banking services to VBS Mutual Bank's
individual-client depositors who held guaranteed deposits of less than
R100 000, following VBS Mutual Bank being placed under curatorship.
The guaranteed VBS deposit book transferred to Nedbank comprised more
than 17 000 clients and more than R250m in deposits, and we look forward
to serving them as Nedbank clients. Nedbank made use of robotic process
automation (RPA) to open these accounts in a short timeframe and added
additional resources (extended banking hours and mobile units) to cater for
the demand on the ground, specifically in Thohoyandou and Makhado. 

For shareholders
Nedbank's net asset value per share increased 4,7%
to 16 957cents (up 8,8% excluding the impact of
IFRS day-one adjustments), our share price performed
7% above the FINI15 index since the start of 2018 and
the interim dividend was up 13,9%. We expanded our
investor activities ahead of the Old Mutual managed
separation and engaged constructively with the
investment community in over 180 meetings in the
past six months. At our 51st annual general meeting all
resolutions were passed, with more than 90% of votes
in favour. Following constructive engagements with
shareholders and enhancements to our remuneration
practices, we were pleased that our remuneration policy
and disclosures received more than 99% votes in favour.
We continued to ensure transparent, relevant and
timeous reporting and disclosure to shareholders, and
were acknowledged by the Investment Analyst Society
as the leader in corporate reporting in the banking sector
and the Nedbank Group Integrated Report continued
to be ranked in the top tier of JSE-listed companies.
Nedbank's valuation metrics remain attractive, with
price/earnings and price-to-book ratios of 8,9 times and
1,5 times respectively, and a dividend yield of 5,0% at
30 June 2018.

For regulators
We maintained Basel III requirements ahead of full
compliance timelines, including a strong capital position,
achieving a CET1 ratio of 12,4% (after the fully phased-in
day-one impact of IFRS 9 and the impact of IFRS 15), an
average LCR of 106,9% in the second quarter of 2018 and
an NSFR of 116,4% at June 2018. 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 appropriately
supporting the funding needs of governments. Cash
taxation contributions of R5,7bn were made relating
to direct, indirect, pay-as-you-earn and other taxation.
We continued to work closely with all our regulators
to ensure efficient delivery of the various regulatory
programmes, and implemented IFRS 9 and IFRS 15 on
1 January 2018, with a fully phased-in impact of 25 bps
on our CET1 ratio at 1 January 2018, inclusive of the
15 bps arising from our share of ETI's own transitional
IFRS 9 impact.

For society
We understand that our long-term sustainability and
success are contingent on the degree to which we deliver
value to society. We have defined our purpose as 'using
our financial expertise to do good for individuals, families,
businesses and society'. It follows then that it is through
the considered development and delivery of products and
services that satisfy societal needs that we can play our
part to enable a thriving society, create long-term value,
maintain trust and ensure the success of our brand. This
is particularly important in the current context of SA as
well as the broader African continent.

In addition to the R82bn in new loans advanced to clients in
the first half of 2018, evidence of how we have delivered on our
purpose over time includes:

-    A focus on sustainable-development finance that was
     evident in more than R460m of new lending to support
     student accommodation, R3,2bn lent to construct green
     buildings, R19,8bn dispersed for renewable-energy deals and
     R348m to affordable-housing developments. In addition,
     in line with SDG 6 – provision of clean water and sanitation
     – the first half of 2018 has seen increased investment
     alongside our clients, including bond support and debt
     capital management for selected water authorities as well
     as water-focused private-equity acquisitions. In the rest of
     Africa we integrated the market-leading Ecobank money
     transfer product into the Nedbank Money app™, enabling
     the cheapest, most efficient money transfers to more than
     33 countries across Africa.

-    Drought interventions – the 2018 Nedbank Cup final was
     held in Cape Town. As part of the legacy of the tournament
     we pledged a further R2m to remove water-sapping alien
     invasive trees around the water catchment areas that feed
     the six big dams supplying the city. This latest financial
     commitment is aimed at enabling the release of one billion
     litres (one million kilolitres) of water annually. This investment
     bolsters the R47m already invested in 23 national water
     and conservation projects through the WWF Nedbank
     Green Trust over the past five years. Through education and
     reduced consumption in our own buildings, by implementing
     initiatives such as recycling air-conditioning water and
     piloting air-flush toilets, we contributed to the City of Cape
     Town's avoiding the day-zero water crisis.

-    Having maintained our level 2 BBBEE contributor status
     for nine years, now measured under the Amended Financial
     Sector Code (FSC), gazetted in terms of section 9(1) of
     the BBBEE Act, 53 of 2003, effective on 1 December 2017.
     We invested more than R55m in socioeconomic development,
     with more than 50% allocated to education, while 75%
     of our procurement spend was used to support local
     SA business. Although Nedbank has achieved industry
     leadership according to the old FSC, we recognise that the
     Amended FSC, which comprises stricter weighting and
     targets, will lead to an industry rebasing, possibly impacting
     relative competitor positioning in this regard. Leading
     transformation remains a strategic priority for Nedbank,
     as this will enable us to remain relevant and support the
     national agenda by playing a key role in contributing to the
     country's economic growth, and in so doing being conscious
     that the manner in which such contributions are made must
     promote access to economic opportunities and financial
     inclusion to improve the overall standard of living and uplift
     the moral quotient of the country.

-    Continuing to participate in the CEO Initiative, working with
     government, business and labour towards a more inclusive
     SA society. We have been part of the leadership team in the
     credit ratings workstream, have committed R20m to the
     R1,5bn SME Fund and will become a participant in the Youth
     Employment Service, in which we, as corporate SA, aim to
     provide internship opportunities for more than one million
     South Africans. For Nedbank this is estimated to translate
     into a cost of over R150m per annum (on a run rate basis
     from 2019), supporting more than 3 000 youth.

CLUSTER FINANCIAL PERFORMANCE
Nedbank's managed operations generated HE growth of 2,0%
to R6 562m and delivered an ROE (excluding goodwill) of 18,3%.

                                                  ROE (excluding
                Change              HE               goodwill)
                   (%)            (Rm)                    (%)
                              Jun          Jun        Jun       Jun
                             2018         2017       2018      2017
CIB                2,6      3 296        3 211       20,1      20,8
RBB                1,5      2 581        2 544       18,6      18,7
Wealth             0,0        519          519       25,4      27,8
RoA
subsidiaries      58,6        111           70        4,0       3,0
Centre          (38,2)         55           89                    
Nedbank
managed
operations         2,0      6 562        6 433       18,3      18,9
ETI              > 100        134      (1 162)                   
Group             27,0      6 696        5 271       18,4      15,1

CIB maintained an attractive ROE of above 20% and produced
a solid result, supported by a high-quality advances book and
a low CLR. This was achieved notwithstanding a challenging
environment for growing revenues. Advances growth was
impacted as clients remained cautious in initiating new projects,
and early repayments were high, while trading activity was
strong but slowed in the second quarter of 2018. Credit quality
remained excellent through proactive risk management as we
continued to monitor and manage exposures to stressed sectors
of the economy, such as construction and cement, as well as
certain SOEs.

RBB delivered a solid ROE and an increase in HE ahead of our
expectations, notwithstanding the impact of impairment
overlay releases in the previous year and IFRS changes in the
current year. NII growth was underpinned by solid growth in
advances and strong growth in deposits, offset by a lower
NIM due mainly to the impact of margin compression on
term deposits. Credit losses remained muted, reflecting a
high-quality portfolio. Excluding the impact of IFRS 9 and
15, transactional NIR growth was strong. Lower expense
growth reflects the initial impact of optimising processes and
operations, including headcount reductions as well as some
impacts from IFRS changes.

Nedbank Wealth maintained a strong ROE above 25%
and HE remained steady, despite prevailing economic and
market conditions as well as subdued investor sentiment.
The results were attributable to reasonable performances
in Asset Management, Insurance and Wealth Management
International, offset by a decline in earnings in Wealth
Management locally.

RoA's HE increased strongly off a low base as our share of
associate income from our investment in ETI returned to
profitability. Our SADC subsidiaries also grew HE off a low base
as benefits emerge from the recent investments we have made
in the franchises as a platform to create scale.

In the Centre there were no central provision releases and
fair-value gains were lower than in 2017 as, on the back of
IFRS 9 changes, we had implemented a central macro fair-value
hedge accounting solution that will result in lower accounting
volatility on our hedged portfolios in future. This was offset by a
postretirement medical aid (PRMA) credit amounting to R180m
after tax.

FINANCIAL PERFORMANCE
Growth in key lines of the statement of comprehensive
income was impacted by the implementation of IFRS 9 and
IFRS 15 accounting changes effective 1 January 2018 as the
previous year comparatives were not restated. The table
below has been presented to enable a like-for-like comparison
and provides for the following accounting changes. Under
IFRS 9 (a) suspended interest on the non-recoverable portion
of the specific defaulted book is no longer recognised as NII,
with full impairments previously being raised; (b) higher levels
of portfolio provisions are raised on new loans compared
with IAS 39; and (c) initiation fees previously recognised as NIR
are now amortised to NII through the effective-interest-rate
method. Under IFRS 15 costs of our rewards program were
previously recognised as an expense and are now recognised as
a reduction in NIR.  

Estimated impact of IFRS accounting changes 

                               Reported      IFRS   Jun 2018     Like-for-
           Jun 2017 Jun 2018     change   changes   adjusted   like change
               (Rm)     (Rm)        (%)      (Rm)       (Rm)           (%)
NII          13 548   14 006        3,4        51     14 057           3,8
Impairments   1 594    1 815       13,9        91      1 906          19,6
NIR          11 730   12 236        4,3       271     12 507           6,6
Expenses     14 369   14 756        2,7       124     14 880           3,6
HE            5 271    6 696       27,0        77      6 773          28,5

Net interest income
NII increased 3,4% to R14 006m, ahead of AIEBA growth of
0,8%. AIEBA growth adjusted for IFRS opening balance changes
was 1,2%.
  
NIM expansion of 9 bps to 3,67% was driven largely by an
improved asset mix of 5 bps and asset pricing of 4 bps.
The 25 bps interest rate decreases in July 2017 and March
2018 more than offset the volume-related increases in
capital and transactional deposits and resulted in a negative
endowment of 2 bps. IFRS changes had a net nil impact on
NIM, as a negative 4 bps impact of IFRS 9: Suspended interest
was offset by a positive impact of IFRS 9: Initiation fee. HQLA
optimisation added 2 bps to NIM.

Impairments charge on loans and advances
Impairments increased 13,9% to R1 815m. The CLR increased
6 bps to 0,53%, driven by increases in defaults in the CIB
portfolio and the implementation of IFRS 9, which increases
the coverage on new business, mostly in retail portfolios, and
includes impairments on off-balance-sheet exposures. This
was partially offset by the change in treatment of suspended
interest under IFRS 9, which structurally lowers the CLR of both
home loans and personal loans, and lowers the corresponding
interest margin. The low CLR continues to reflect selective
advances growth and the high quality of the portfolio across all
our businesses. 

Impairments in CIB increased from the previous year, but
remained below the TTC target. This was the result of
successful resolutions and settlements that enabled the
reversal of historic impairment provisions, offset by growth in
defaulted advances, given increased stress in some industries.
Impairments are individually determined in CIB and 88%
of specific impairments are concentrated in approximately
10 counters. RBB impairments decreased by 1,7% to R1,7bn as a
result of an improvement in collections, as well as the structural
change in the treatment of suspended interest under IFRS 9,
which reduced both impairments and NII by R181m. Adjusting
for this impact, RBB impairments would have increased
8,9%. In addition, the CLR benefited from the improvement
in macroeconomic assumptions relative to those used in
December 2017. 

Continued proactive collection and resolution strategies within
CIB and RBB contributed to group writeoffs increasing 4,9% to
R2 387m and postwriteoff recoveries increasing 8,8% to R629m.
The group's central provision remains unchanged from year end
at R150m.  

           Banking                                     TTC
          advances        Jun     Jun      Dec      target
CLR (%)         (%)      2018     2017    2017      ranges
CIB            46,7      0,01   (0,03)    0,06   0,15–0,45
RBB            46,1      1,06     1,14    1,06   1,30–1,80
Wealth          4,1      0,15     0,09    0,09   0,20–0,40
RoA             3,1      1,09     0,80    1,02   0,65–1,00
Group         100,0      0,53     0,47    0,49   0,60–1,00

Total defaulted advances increased 12,9% to R22,8bn,
representing 3,1% of advances, as the weakened economic
environment placed additional stress on specific wholesale
counters, including the construction and cement industries,
while performing defaults in RBB increased. 

The decrease in specific coverage from 37,2% to 35,2% was due
primarily to the change in the defaulted portfolio mix, with an
increase in CIB defaults. In CIB impairments are considered
on a client-by-client basis based on specific security we hold
and are adequately provided for. RBB's specific coverage
increased to 41,8%, driven by higher coverage on performing
defaulted loans after the IFRS 9 implementation. Nedbank
considers the coverage ratios appropriate given the higher
proportion of wholesale lending, compared with the mix of its
peers, high recovery rates and the collateralised nature of the
commercial-mortgages portfolio, with low loan-to-value ratios.

Portfolio coverage increased from 0,70% at December 2017
(IAS 39 basis) to 0,93% after IFRS 9 day one and 0,91% at
June 2018.

Non-interest revenue 
NIR growth of 4,3% to R12 236m reflects the negative impact
of IFRS 9 and 15, as well as weaker business and consumer
confidence levels in the second quarter of 2018. Excluding the
impact of the IFRS accounting changes, NIR increased by 6,6%
on a like-for-like basis from the ongoing progress in delivering on
our transactional banking strategy. 

-    Commission and fee income grew 3,2% to R8 709m.
     RBB reported good underlying transactional NIR growth
     of 8,1% (excluding the impact of IFRS9), supported by
     good main-banked client growth in the middle market,
     professional and small-business client segments.
     CIB delivered solid growth, despite the closure of almost all
     of the round 4 renewable-energy deals being delayed to the
     second half of 2018.

-    Insurance income increased 7,0% to R830m, supported by
     a lower-claims experience in homeowner's cover after the
     catastrophic weather events experienced the previous year,
     as well as the benefit of lower business strain relating to the
     funeral book. This growth was slightly offset by higher lapses
     and lower reserve releases.

-    Trading income increased 4,5% to R2 096m, with strong
     growth in equities and slower growth in debt trading, as
     activity levels among wholesale clients remained muted,
     particularly in the second quarter of the year.

-    Private-equity income, including investment realisations
     in the Commercial Property Finance portfolio and higher
     dividends received, increased 38,3% off a low base to R282m.

Expenses
Expense growth of 2,7% to R14 756m was well below the
inflation rate and below the guidance we provided for the full
2018 year (being growth of mid-single digits), demonstrating
disciplined and careful management of discretionary expenses in
an environment of slow revenue growth as well as benefits from
IFRS. Excluding the pretax PRMA benefit of R250m, expenses
increased by 4,4% and excluding IFRS changes expenses grew by
3,6%. The underlying movements included:

-    Staff-related costs increasing at 3,5%, following:
     -  an average annual salary increase of 5,8% and a
        1 053 reduction in staff numbers since June 2017;
     -  a 10,0% increase in short-term incentives in line with the
        group's financial performance; and
     -  a settlement with our staff with regard to PRMA
        obligations and benefits, resulting in a provisional R250m
        credit in respect of actuarially estimated liabilities
        previously raised.

-    Computer-processing costs increasing 4,5% to R2 218m,
     driven by increases in software amortisation and incremental
     software licence costs, offset by reduced network-related
     costs as a result of efficiency savings. 

-    Other cost lines being well managed, with increases below
     inflation, and reflecting the benefits from implementing our
     new target operating model, as well as efficiencies from the
     adoption of automation and robotics as well as procurement
     savings.

The group's growth in expenses of 2,7% was below total revenue
growth (including associate income) of 9,2%, resulting in a
positive jaws ratio of 6,5% and an efficiency ratio of 55,8%,
compared with 59,3% in the first half of 2017. The jaws ratio in
managed operations was positive at 1,0%.

Earnings from associates
The R207m associate income was largely attributable to
R247m from ETI's profit in the fourth quarter of 2017 and the
first quarter of 2018, in line with our policy of accounting for
ETI earnings a quarter in arrear. The total effect of ETI on the
group's HE was a profit of R134m, including the R113m impact of
funding costs. 

Accounting for associate income, together with Nedbank's
share of ETI's other comprehensive income and movements
in Nedbank's foreign currency translation reserves and our
share of ETI's own IFRS 9 transitional adjustment, resulted
in the carrying value of the group's strategic investment in
ETI decreasing from R3,3bn at 31 December 2017 to R2,9bn
at 30 June 2018. ETI's listed share price increased by 17,6%
during the first half of 2018, which resulted in the market
value of the group's investment in ETI increasing to R4,6bn at
30 June 2017, using the official Central Bank of Nigeria rate
(305 Naira:US $) and R4,0bn based on the NAFEX rate
(361 Naira:US $, which we use for sensitivity analysis purposes).
While risks remain, it is expected that the actions taken to
improve ETI's financial position and governance, along with
an improving macroeconomic environment, will continue to
drive an improved financial performance in 2018. ETI's results
for the six months to 30 June 2018, released on 19 July 2018,
highlighted the continuing trend of strong earnings growth as
attributable profit increased to US $58m for Q2 2018, with
Nedbank's estimated share though associate income being
R162m (reported in Q3 2018 a quarter in arrear).

In line with IFRS requirements the R1bn impairment provision
recognised at 31 December 2016 was reviewed at 30 June
2018 and management determined that there were no
indicators of further impairment. We observed an improvement
in ETI's recent financial performance, but it is not yet considered
to be a sufficient indicator of sustainable performance to
release the impairment provision or part thereof. Our position
will be reassessed at 31 December 2018. Should ETI continue the
recent trend of delivering increased earnings during the second
half of 2018, there could be sufficient observable indicators at
year-end for the R1bn impairment provision to be decreased or
no longer required.

A R40m associate loss was incurred due to operational losses in
an associate, which is the cash-processing supplier to the four
large banks.

STATEMENT OF FINANCIAL POSITION
Capital
The group remains well capitalised at levels significantly above
the minimum regulatory requirements. The CET1 ratio of
12,4% is reflective of organic capital generation, offset by 5%
growth in RWA during the period and after accounting for the
full impact of the implementation of IFRS 9 and IFRS 15 on
1 January 2018. The group CET 1 capital ratio was also positively
impacted following a weakening of the rand against the US
dollar during the period. 

The total tier 1 and total CARs decreased as a result of a further
grandfathering of old-style preference shares (R531m) in
January 2018 in line with the Basel III transitional arrangements.
The total CAR was positively impacted by the issuance of
further tier 2 capital of R2,0bn during March 2018.

                                     Internal
                 Jun    Dec    Jun     target    Regulatory
Basel III (%)   2018   2017   2017      range    minimum(1)
CET1 ratio      12,4   12,6   12,3  10,5–12,5         7,375
Tier 1 ratio    13,2   13,4   13,2     > 12,0         8,875
Total capital
ratio           15,6   15,5   15,7     > 14,0        11,125

(Ratios calculated with full IFRS 9 phase-in and include
unappropriated profits.)

(1) 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 a priority for the group.

The group's three-month average long-term funding ratio was
28,4% for the Q2 2018, supported by growth in Nedbank Retail
Savings Bonds of R3,5bn to R28,3bn and the successful capital
market issuances of R2,4bn senior unsecured debt and R2,0bn
tier 2 capital.

The group's June 2018 quarterly average LCR of 106,9%
exceeded the minimum regulatory requirement of 90% in
2018 and the group maintains appropriate operational buffers
designed to absorb seasonal and cyclical volatility in the LCR.

                                                Jun        Dec       Jun
Nedbank Group LCR                              2018       2017      2017
HQLA (Rm)                                   148 675    138 180   144 568
Net cash outflows (Rm)                      139 043    118 956   138 260 
Liquidity coverage ratio (%)(2)               106,9      116,2     104,6
Regulatory minimum (%)                         90,0       80,0      80,0

(2) Average for the quarter.

Further details on the LCR are available in the Additional
information section of the condensed consolidated interim
financial results.

Nedbank's portfolio of LCR-compliant HQLA increased by
7,6% to a June 2018 quarterly average of R148,7bn. The LCR
increased yoy as a result of a marginal increase in HQLA,
while net cash outflows remained fairly constant. The HQLA
portfolio, taken together with our portfolio of other sources of
quick liquidity, resulted in total available sources of quick liquidity
of R203,8bn, representing 20,0% of total assets.

Nedbank exceeded the minimum NSFR regulatory requirement
of 100% effective from 1 January 2018 and reported a June
2018 ratio of 116,4%. The key focus in terms of the NSFR is to
achieve continued compliance in the context of balance sheet
optimisation.

Loans and advances
Loans and advances increased by 0,4% yoy to R712,7bn, driven
by solid growth in RBB, but offset by a decline in trading
advances and short-dated lending in CIB as well as the IFRS
day-one impact of R3,2bn. Excluding the IFRS impact, advances
grew 0,8%. 

Loans and advances by cluster are as follows: 

                                   Change
Rm                                    (%)       Jun 2018     Jun 2017
CIB                                 (5,0)        345 783      363 873
 Banking activities                 (0,9)        322 492      325 266
 Trading activities                (39,7)         23 291       38 607
RBB                                   6,3        315 516      296 945
Wealth                                5,5         31 089       29 464
RoA                                   8,5         22 123       20 382
Centre(3)                        (> 100%)        (1 843)        (800)
Group                                 0,4        712 668      709 864

(3) Intercompany eliminations.

RBB loans and advances grew 6,3% to R315,5bn, supported
by growth across all asset classes in line with risk appetite
and prudent origination strategies. Business Banking grew
advances 9,1%, largely due to an increase in new-loan payouts,
coupled with an increase in client drawdowns of existing
facilities. MFC (vehicle finance) increased advances by 9,2%
as new-business volumes remained robust despite a muted
new-vehicle sales market. Unsecured Lending grew advances
6,2% and we remain comfortable with the quality and overall
performance of the unsecured-lending portfolio based on the
conservative rules we apply to consolidation, restructuring and
term strategies. Card advances decreased 1,3%, reflecting gross
advance growth of 5,3%, offset by an increase in impairments
due to IFRS day-one changes. Home loan advances grew
at below-inflation levels as growth in the overall residential
mortgage market remains muted and Nedbank maintained
market share. 

CIB loans and advances decreased 5,0% yoy to R345,8bn.
The banking book declined slightly due to a combination of
ongoing early repayments, managed selldowns, which allowed
for the diversification of risk, and a decrease in the preference
share book due to less appetite for preference share deals. This
was offset by increased demand for new term loans, as well as
commercial-mortgage loans and advances increasing 4,0% to
R132,2bn. The CPF portfolio contains good-quality collateralised
assets with low loan-to-value ratios, underpinned by a large
secure asset pool and a strong client base, and is managed by
a highly experienced property finance team. Trading advances
declined by 39,7% and includes the result of the choice to
settle more expensive foreign funding, which reduced interbank
foreign placements.

Deposits
Deposits grew 5,0% yoy to R801,2bn, with total funding-related
liabilities increasing 4,4% to R854,8bn, while the loan-to-deposit
ratio improved to 89,0%.

Through the active management of the RBB franchise, deposits
grew 8,8% yoy to R303,8bn, resulting in household deposits
market share remaining at 19,0%. This was supported by
Nedbank's strong market share in household CASA deposits
of 18,0%. Nedbank Wealth and RoA grew deposits by 4,3%
and 11,7% respectively in line with the objective of growing
Basel III-friendly deposits.

During the 12 months to June 2018 Nedbank has successfully
reduced its use of more expensive foreign currency funding in
the general rand funding pool through growth in negotiable
certificates of deposit, structured deposits, fixed deposits and
current and savings accounts. This strategy not only contributed
to the positive management of the long-term funding profile,
but also reduced foreign currency funding reliance.

The positive tilt towards more Basel III-friendly RBB
deposits and the reduction in foreign currency funding through
deliberate growth in negotiable certificates of deposit,
structured deposits and other deposits have contributed
positively to ensuring cost-effective regulatory compliance while
maintaining a strong balance sheet position.

Group strategic focus
During the first six months to 30 June 2018 we continued
to focus on delivering on our five strategic focus areas
that underpin sustainable earnings growth and improving
returns. We made good progress in delivering market-leading
CVPs and digital innovations. This focus enabled Nedbank
to increase its total client base to over eight million for
the first time, grow revenues and unlock operating
efficiencies. Our strategic enablers, including technology
investments (with our Managed Evolution IT strategy and
Digital Fast Lane as key components), our people, our culture
and our brand, are delivered through our target operating model
and by embracing New Ways of Work (NWoW). This is enabling
us to create a more client-focused, agile, competitive and digital
Nedbank.

-    Delivering innovative market-leading client
     experiences. The new Nedbank Money app™, which
     makes banking more convenient for our retail clients,
     has been downloaded one million times, with more than
     400 000 clients having used it since November 2017.
     UNLOCKED.ME, our first lifestyle marketplace proposition
     aimed at the youth, was launched earlier this year. More
     features and functionality on this ecommerce platform
     will be released soon to enable clients to unlock even more
     benefits. We also launched our new Stokvel Account that
     offers members of stokvels up to 10% discount at our
     retail partners, burial benefits of R10 000 a member for
     only R15 a month, zero transaction fees and great interest
     rates. In Nedbank Wealth we piloted geyser telemetry, an
     innovative smart home solution that reduces electricity
     consumption and may prevent resultant damage. Current
     plans include extending the pilot to more than 500 clients.
     As far as our integrated channels are concerned, we have
     converted 57% of our outlets to new-image digital branches
     to date, and our investment in distribution channels over
     the next three years (until 2020) will result in 82% of our
     retail clients being exposed to the new-image branch
     format and self-service offerings. The introduction of
     chatbots and robo-advisors will continue to enhance client
     experience through our contact centre and web-servicing
     capabilities. Nedbank Insurance was the first-to-market
     insurer in SA to have chatbot functionality, and we have
     made significant strides in remaining ahead through
     delivering live-agent service functionality and funeral
     quoting capabilities. Nedgroup Investments won The
     Financial Times Banker Magazine Technology Project award
     in the Artificial Intelligence and Robotics category for our
     robo-advice solution. We are continuing with our NZone
     (digital self-service branch at the Sandton Gautrain station)
     and solar-powered branch (in deep-rural areas such as
     Upper Mncwasa in the Eastern Cape) pilots before extending
     the rollout of these innovative concepts in the future.
     The foundations put in place through Managed Evolution
     (our core systems and technology platform transformation),
     digital enhancements and NWoW are delivering ongoing
     incremental digital benefits and enhanced client service.
     In H2 2018 Nedbank will bring further exciting digital
     innovations to market to enhance client experiences and
     drive efficiencies. Some of these innovations include a
     refreshed internet banking experience in line with our mobile
     banking apps; the ability to sell an unsecured loan bundled
     with a transactional account; simplified client onboarding
     with convenient, FICA-compliant account opening; a new and
     exciting loyalty and rewards solution; and the further rollout
     of chatbots, robo-advisors and software robots (robotic
     process automation). We are also launching MobiMoney,
     which allows clients to receive and send money, buy airtime
     and electricity from a cellphone and withdraw money at a
     Nedbank ATM – all without a formal bank account.

-    Growing our transactional banking franchise faster than
     the market. Nedbank's SA retail franchise grew its total
     client base 1,6% to 7,7 million, with 6,1 million clients having
     a transactional account and 2,8 million main-banked
     clients supporting retail transactional NIR growth of 8,1%
     (excluding IFRS adjustments). Our main-banked client
     numbers have grown yoy by 2,5%, driven largely by growth
     in the middle-market, professional and small-business-client
     segments. The 2017 Consulta Survey estimated Nedbank's
     share of main-banked clients at 12,7%, up from the
     10,1% recorded through the 2015 All Media and Products
     Study Survey (using a similar methodology), as we aim
     to reach a share of more than 15% by 2020. Our SADC
     businesses grew their client base by 6% to 334 000,
     supporting NIR growth of 12%. Our integrated model in CIB
     enabled deeper client penetration and increased cross-sell,
     resulting in 15 primary-bank client wins in the past six
     months.

-    Being operationally excellent in all we do. Cost discipline
     is an imperative in a weak economic environment resulting
     in slower revenue growth. We have ongoing initiatives to
     optimise our cost base. These include the reduction of our
     core systems from 251 to 125 since the inception of the
     Managed Evolution programme, with us being well on our
     way to reaching a target end state of less than 60 core
     systems by 2020, and the reduction of floor space in RBB
     by more than 30 000 m² by 2020, of which 28 828 m² has
     been achieved to date. Good progress was also made with
     our target operating model initiatives, with cumulative
     savings to June 2018 of R512m, with the aim of generating
     R1,2bn pretax benefits for Nedbank by 2020 as disclosed in
     an element of our long-term incentive scheme. Most cost
     initiatives have been identified in RBB, and we delivered
     savings of R337m to June 2018, which includes RBB's
     target operating model savings. Over the past 18 months
     we reduced headcount by 1 154 (mainly through natural
     attrition), optimised our staffed points of presence by
     closing eight branches (while maintaining our coverage of
     the bankable population at 84%). We achieved efficiencies
     through our increased footprint of Intelligent Depositor
     devices, with the recycling of cash at these devices now at
     58% of all cash, from 20% in 2015. During H1 2018, new
     client-servicing functions that were previously only available
     in branches or staffed channels were released on the
     Nedbank Money app™ taking the total servicing functions
     available to 42. The new Nedbank Online banking site was
     also launched during this period, with 31 client-servicing
     functions released. An additional two releases are planned,
     which will increase the total app and web service functions to
     60. We implemented 51 software robots to date (robotic
     process automation) to enhance efficiencies and reduce
     processing errors in administrative-intense processes. These
     exclude the temporary software robots used to onboard the
     more than 17 000 VBS clients. Through our newly adopted
     agile IT development approach and NWoW we have reduced
     the time and cost of bringing new innovations to market.

-    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 and increasing transactional banking revenues,
     with commission and fees in RBB (excluding the impact
     of IFRS accounting changes) and CIB up 6,5% and 6,6%
     respectively. Our selective origination of personal loans,
     home loans and commercial-property finance has proactively
     limited downside credit risk in this challenging operating
     climate, enabling a CLR of 0,53%, below the bottom end of
     our TTC target range. At the same time our balance sheet
     metrics remain strong and we continue to deliver attractive
     dividend growth. Nedbank is continually looking for
     opportunities to grow and create value for shareholders and
     in June 2018 has been selected as one of four short-listed
     bidders for Mercantile Bank to proceed to the second phase
     of the process. Any final bid will be evaluated against strict
     strategic, financial and cultural criteria.

-    Providing our clients with access to the best financial
     services network in Africa.

     -  In Central and West Africa, where we have adopted a
        partnership approach, ETI remains an important strategic
        investment for Nedbank, providing our clients with access
        to a pan-African transactional banking network across
        39 countries and Nedbank with access to dealflow in
        Central and West Africa. We have made good progress
        in working with ETI's board and other institutional
        shareholders. ETI reported six consecutive quarters of
        profit and is making good progress on its transactional
        banking and digital strategy and optimising its cost base.
        We remain supportive of ETI's endeavours to deliver an
        ROE in excess of its COE over time. While risk remains,
        economic conditions in Nigeria and other economies in
        West Africa are improving, and ETI should continue to
        provide a strong underpin to Nedbank Group's earnings
        growth in 2018. We have also increased our levels of
        collaboration, with more than 90 of our wholesale
        clients being banked by ETI and progress being made
        in partnering with ETI to expand our wealth franchise,
        collaborating on the pan-African remittances product and
        increasing treasury and trading activities.

     -  In SADC, where we own, manage and control six banks,
        we continue to build scale and optimise costs. Our core
        banking system, Flexcube, has now been implemented in
        all subsidiaries (excluding Banco Único). We continued to
        launch a number of new digital products and reported
        a 146% increase in banking app transactions and a 6%
        increase in client numbers. During the period Merchant
        Bank of Central Africa (MBCA) in Zimbabwe was
        rebranded to Nedbank Zimbabwe.

Old Mutual plc managed separation
Nedbank Group shareholders are referred to the
announcements published on 11 March 2016, 28 June 2016,
1 November 2017 and 20 April 2018 relating to Old Mutual plc's
managed separation strategy, which entails, among other
things, the creation of a new South African holding company,
Old Mutual Limited ('OML').

The admission of, and commencement of unconditional dealings
in, the ordinary shares of OML on the JSE as a primary listing
and also on the London Stock Exchange, the Namibian Stock
Exchange, the Zimbabwe Stock Exchange and the Malawi Stock
Exchange took place on 26 June 2018.

Listing of OML is the precursor to the third and final step of
the managed separation and entails the reduction in OML's
shareholding in Nedbank Group through the distribution of
Nedbank Group ordinary shares to OML's shareholders. This
will result in OML, immediately after the implementation of
distribution or unbundling, holding a 19,9% strategic minority
shareholding in Nedbank Group. It is anticipated that the
Nedbank unbundling will take place approximately six months
from the date of the OML listing as mentioned above, and will
allow suitable time for the transition of the OML shareholder
register to an investor base with an SA and emerging-market
focus and mandate. After the unbundling Nedbank Group is
likely to see an increase in the number of its shares held by
emerging-market-mandated index funds, which will adjust
according to the improved Nedbank free float (from about
45% before unbundling to about 80% after unbundling) and a
normalisation of SA institutional shareholding (some of which
are currently underweight on a straight-market-capitalisation
basis given some Nedbank Group holding through the OML
shareholding).

Nedbank Group continues to operate on a business-as-usual
basis and the managed separation will have no impact on our
strategy, our day-to-day management or operations, our staff
or our clients. Our engagements with Old Mutual have been at
arm's length and are overseen by independent board structures.
Old Mutual operates predominantly in the investment, savings
and insurance industry, which has little overlap with banking,
even though we compete in the areas of wealth and asset
management and personal loans. Our technology systems,
brands and businesses have not been integrated. 

As noted before, our collaboration to unlock synergies will
continue to be underpinned by OML's strategic shareholding in
Nedbank Group. We are committed to working with OML to
deliver ongoing synergistic benefits at arm's length.

Economic and regulatory outlook
The International Monetary Fund expects global economic
growth to accelerate to 3,9% in 2018 from 3,7% in 2017, with
advanced countries forecast to grow by 2,5% and emerging and
developing economies by 4,9%. Growth in sub-Saharan Africa is
expected to accelerate to 3,3% in 2018 from 2,9% in 2017.

Given SA's poor economic performance in early 2018, Nedbank
Group's current forecast for GDP growth in 2018 is 1,0%,
down from 1,3% in 2017. GDP growth thereafter is forecast
to increase to 1,8% and 2,2% in 2019 and 2020 respectively.
Although inflation is forecast to remain within SARB's inflation
target range, it is likely to drift higher during the rest of the year
and into 2019. The upward pressure on inflation is expected
to emanate from higher food, fuel and electricity prices, as
well as a moderately weaker rand. The rand is forecast to be
volatile as global risk appetite softens on growing concerns over
world growth prospects in light of rising protectionism and the
normalisation of monetary policy in most developed countries.
As a result, domestic interest rates are forecast to remain
unchanged for the remainder of the year, but the risk to the
interest rate outlook has shifted to the upside.

Consumer spending is likely to remain firm, supporting
moderate growth in household credit demand. Faster growth
appears unlikely given that household finances are likely
to be hurt by slower wage growth and higher living costs.
Corporate credit demand will remain subdued, but should
improve modestly off a low base. Continued global growth
and rising commodity prices could eventually translate into
cyclical recoveries in SA's major export-orientated industries.
Some revival is also expected in renewable-energy projects,
but persistent policy uncertainty, particularly around property
expropriation without compensation, the Mining Charter and
the challenging domestic operating environment, will probably
delay a more broad-based recovery in fixed investment.

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. Progress
with tackling strategic, structural and financial problems at
many state-owned enterprises – and Eskom in particular – is
essential to lift economic growth.

Overall economic conditions in SA should improve off a low base
over the next three years. Despite the many challenges faced by
the SA economy, the SA banking system remains sound, liquid
and well capitalised. 

Prospects
On the back of the group's strong performance in H1 2018 and
developments in the environment, we have updated our
guidance on financial performance currently expected for the
full year 2018 as follows:

-    Average interest-earning banking assets to grow below
     nominal GDP (previously: in line with nominal GDP).
-    NIM to be slightly above the 2017 level of 3,62% (unchanged).
-    CLR to increase, but remain below the bottom of our target
     range of 60 to 100 bps (under IFRS 9) (previously: increase
     into the bottom half of our target range).
-    NIR to grow above mid-single digits (unchanged).
-    Associate income to be positive (ETI associate income
     reported quarterly in arrear) (unchanged).
-    Expenses to increase below mid-single digits (previously:
     increase by mid-single digits).

Given the strong financial performance in the first half of 2018,
together with expectations of a slowly improving economic
outlook and ongoing delivery on our strategy, our guidance for
growth in DHEPS for 2018 remains unchanged, being in line with
our medium-to-long-term target of greater than or equal to
GDP plus CPI plus 5%.

The outlook for our medium-to-long-term targets in 2018 is as
follows, and we remind investors that we have set ourselves
specific 2020 targets of ROE (excluding goodwill) of greater 
than or equal to 18% and cost to income of lower than or equal to 53% as
a pathway to ongoing and sustainable improvements in the key metrics that 
support shareholder value creation. 

                                 Jun 2018
Metric                        performance    Full-year 2018 outlook              Medium-to-long-term target

ROE (excluding goodwill)            18,4%    Remains below target                5% above COE(4) (>= 18% by 2020)

Growth in DHEPS                     26,3%    >= consumer price index +           >= consumer price index + 
                                             GDP growth + 5%                     GDP growth + 5%
                                             
CLR                                 0,53%    Increases, but remains below        Between 0,6% and 1,0% of 
                                             our target range (under IFRS 9)     average banking advances 

NIR-to-expense ratio                82,9%    Remains below target                > 85%

Efficiency ratio (including
associate income)                   55,8%    Remains above target                50–53% (<= 53% by 2020)

CET1 capital adequacy ratio
(Basel III)                         12,4%    Within or above target              10,5–12,5%

Dividend cover                 2,00 times    Within target range                 1,75–2,25 times

(4) The COE is currently forecast at 13,5% in 2018.

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
Having served on the Nedbank Group board for nine years,
Nomavuso Mnxasana resigned as an independent non-executive
director with effect from the close of Nedbank Group's annual
general meeting on 10 May 2018. With managed separation
progressing according to plan, Peter Moyo was appointed as a
non-executive director and Bruce Hemphill resigned from the
Nedbank Group board on 11 June 2018.  

Khensani Nobanda was appointed as Group Executive for Group
Marketing and Corporate Affairs on 15 May 2018, and Deborah
Fuller was appointed as Group Executive for Human Resources
on 25 June 2018 following the retirement of Abe Thebyane on
31 March 2018.

Basis of preparation*
Nedbank Group Limited is a company domiciled in SA.
The unaudited condensed consolidated interim financial results
of the group at and for the period ended 30 June 2018 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 2018, 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 2018 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 SA. The accounting policies applied in the preparation of
these condensed consolidated interim financial statements
are in terms of IFRS and are consistent with those used for the
previous annual financial statements, except for changes arising
from the adoption of IFRS 9 and IFRS 15, as set out in the notes
to the condensed consolidated interim financial statements. 

The directors of the group take full responsibility for the
preparation of this report. The condensed consolidated interim
financial results have not been audited or independently
reviewed by the group's external auditors. The group's
2017 annual financial information has been correctly extracted
from the underlying audited consolidated annual financial
statements. 

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

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, regulatory and legal 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 695 cents
per ordinary share has been declared, payable to shareholders
for the six months ended 30 June 2018. 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 139 cents per ordinary share, resulting
in a net dividend of 556 cents per ordinary share, unless the
shareholder is exempt from paying dividend tax or is entitled to
a reduced rate in terms of an applicable double-tax agreement.  

Nedbank Group's tax reference number is 9375/082/71/7 and
the number of ordinary shares in issue at the date of declaration
is 500 239 303.

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, 4 September 2018
Shares commence trading (ex
dividend)                         Wednesday, 5 September 2018
Record date (date shareholders
recorded in books)                Friday, 7 September 2018
Payment date                      Monday, 10 September 2018

Share certificates may not be dematerialised or rematerialised
between Wednesday, 5 September 2018, and Friday,
7 September 2018, both days inclusive.

On Monday, 10 September 2018, 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,
10 September 2018.

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

7 August 2018

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

Transfer secretaries in SA
Shareholders are reminded that, with effect from 1 June 2018,
Nedbank Group's transfer secretaries in SA has changed from
Computershare to Link Market Services.

Link Market Services South Africa Proprietary Limited,
19 Ameshoff Street, Braamfontein, Johannesburg, 2001, SA.

PO Box 4844, Marshalltown, 2000, 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), EM Kruger, RAG Leith, PM Makwana, L Manzini,
Dr MA Matooane, RK Morathi** (Chief Financial Officer), MP
Moyo, JK Netshitenzhe, MC Nkuhlu** (Chief Operating Officer),
S Subramoney, MI Wyman*** (British).
** Executive *** Lead independent director 

Company Secretary:       TSB Jali

Reg number:              1966/010630/06
JSE share code:          NED
NSX share code:          NBK
ISIN:                    ZAE000004875
Nedbank Group Limited: JSE alpha code: NEDI

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.
-   Financial results presentation to analysts.
-   Link to a webcast of the presentation to analysts.

For further information please contact Nedbank Group Investor
Relations at nedgroupir@nedbank.co.za.
 
Financial highlights
at
                                                                                                  30 June        30 June     31 December
                                                                         Change                      2018           2017            2017
                                                                            (%)               (Unaudited)     (Reviewed)       (Audited)
Statistics                                                                                                                               
Number of shares listed                                                                    m        500,2          498,1           498,1
Number of shares in issue, excluding shares held by group 
entities                                                                                   m        484,2          481,5           481,6
Weighted-average number of shares                                                          m        482,7          479,9           480,8
Diluted weighted-average number of shares                                                  m        492,0          488,9           490,0
Preprovisioning operating profit                                           20,2           Rm       10 873          9 047          19 358
Economic profit(1)                                                         >100           Rm        1 709            393           1 695
Headline earnings per share                                                26,3        cents        1 387          1 098           2 452
Diluted headline earnings per share                                        26,3        cents        1 361          1 078           2 406
Ordinary dividends declared per share                                      13,9        cents          695            610           1 285
    Interim                                                                13,9        cents          695            610             610
    Final                                                                              cents                                         675
Ordinary dividends paid per share                                           7,1        cents          675            630           1 240
Dividend cover                                                             11,1        times         2,00           1,80            1,91
Net asset value per share                                                   4,7        cents       16 956         16 200          16 990
Tangible net asset value per share                                          3,1        cents       14 440         14 007          14 626
Closing share price                                                        19,5        cents       24 958         20 879          25 610
Price/earnings ratio                                                              historical          8,9            9,4            10,4
Price-to-book ratio                                                               historical          1,5            1,3             1,5
Market capitalisation                                                     20,0           Rbn        124,8          104,0           127,6
Number of employees (permanent staff)(1)                                  (3,3)                    31 272         32 349          31 531
Number of employees (permanent and temporary staff)(1)                    (3,2)                    31 592         32 645          31 887
Key ratios (%)                                                                                                                         
Return on ordinary shareholders' equity (ROE)(1)                                                     17,2           14,0            15,3
ROE, excluding goodwill(1)                                                                           18,4           15,1            16,4
Return on tangible equity(1)                                                                         20,2           16,2            17,8
Return on total assets (ROA)(1)                                                                      1,37           1,10            1,22
Return on average risk-weighted assets1                                                              2,48           2,07            2,28
Net interest income to average interest-earning banking
assets(1)                                                                                            3,67           3,58            3,62
Credit loss ratio – banking advances(1)                                                              0,53           0,47            0,49
Gross operating income growth rate less expense growth
rate (jaws ratio)                                                                                     6,5          (3,9)           (3,0)
Non-interest revenue to total operating expenses                                                     82,9           81,6            80,7
Non-interest revenue to total income                                                                 46,6           46,4            46,6
Efficiency ratio                                                                                     55,8           59,3            58,6
Effective taxation rate                                                                              25,1           28,0            25,5
Group capital adequacy ratios (including unappropriated
profits):(1)                                                                                                                             
 – Common-equity tier 1                                                                              12,4           12,3            12,6
 – Tier 1                                                                                            13,2           13,2            13,4
 – Total                                                                                             15,6           15,7            15,5
Statement of financial position statistics (Rm)                                                                                       
Total equity attributable to equity holders of the parent                  5,3                     82 101         78 004          81 823
Total equity                                                               5,1                     88 962         84 659          88 539
Amounts owed to depositors                                                 5,0                    801 165        762 712         771 584
Loans and advances                                                         0,4                    712 668        709 864         710 329
    Gross                                                                  0,7                    726 934        721 910         722 330
    Impairment of loans and advances                                    (18,4)                   (14 266)       (12 046)        (12 001)
Total assets administered by the group                                     5,7                  1 333 188      1 261 153       1 295 627
    Total assets                                                           5,5                  1 019 015        965 830         983 314
    Assets under management                                                6,4                    314 173        295 323         312 313
Life insurance embedded value1                                           (4,3)                      2 684          2 805           2 745
Life insurance value of new business1                                     16,9                        173            148             349

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

Unaudited condensed consolidated financial statements for the period ended 30 June 2018

Prepared under the supervision of the Nedbank Group CFO, Raisibe Morathi CA(SA).
Nedbank Group Limited Reg No 1966/010630/06.

Condensed consolidated
statement of comprehensive income
for the period ended
                                                                                            30 June        30 June     31 December
                                                                                               2018           2017            2017
                                                                             Change     (Unaudited)     (Reviewed)       (Audited)
                                                                                (%)              Rm             Rm              Rm
Interest and similar income                                                     0,9          37 716         37 364          75 299
Interest expense and similar charges                                          (0,4)          23 710         23 816          47 675
Net interest income                                                             3,4          14 006         13 548          27 624
Impairments charge on loans and advances                                       13,9           1 815          1 594           3 304
Income from lending activities                                                  2,0          12 191         11 954          24 320
Non-interest revenue                                                            4,3          12 236         11 730          24 063
Operating income                                                                3,1          24 427         23 684          48 383
Total operating expenses                                                        2,7          14 756         14 369          29 812
Indirect taxation                                                               0,4             476            474           1 001
Profit from operations before non-trading and capital items                     4,0           9 195          8 841          17 570
Non-trading and capital items                                                (74,2)            (54)           (31)           (224)
Profit from operations                                                          3,8           9 141          8 810          17 346
Share of income/(losses) of associate companies                                >100             207        (1 053)           (838)
Profit before direct taxation                                                  20,5           9 348          7 757          16 508
Total direct taxation                                                           7,7           2 346          2 178           4 209
    Direct taxation                                                                           2 362          2 182           4 267
    Taxation on non-trading and capital items                                                  (16)            (4)            (58)

Profit for the period                                                          25,5           7 002          5 579          12 299
Other comprehensive (losses)/income (OCI) net of taxation                    (62,7)           (135)           (83)              31
    Items that may subsequently be reclassified to profit or loss                                                                 
    Exchange differences on translating foreign operations                                      846          (566)         (1 046)
    Share of OCI of investments accounted for using the equity method                         (194)             64             169
    Fair-value adjustments on available-for-sale assets                                                          1              22
    Debt investments at fair value through OCI (FVOCI) – net change in
    fair value                                                                                (138)                             
    Items that may not subsequently be reclassified to profit or loss                                                            
    (Losses)/Gains on property revaluations                                                     (2)              3             190
    Remeasurements on long-term employee benefit assets                                       (631)            138             387
    Share of OCI of investments accounted for using the equity method                          (16)            277             309

Total comprehensive income for the period                                      24,9           6 867          5 496          12 330
Profit attributable to:                                                                                                           
 – Ordinary shareholders                                                       27,0           6 658          5 244          11 621
 – Holders of preference shares                                               (9,7)             158            175             338
 – Non-controlling interest – holders of additional tier 1 capital
instruments                                                                     2,4             126            123             252
 – Non-controlling interest – ordinary shareholders                            62,2              60             37              88
Profit for the period                                                          25,5           7 002          5 579          12 299
Total comprehensive income attributable to:                                                                                       
 – Ordinary shareholders                                                       25,2           6 423          5 131          11 625
 – Holders of preference shares                                               (9,7)             158            175             338
 – Non-controlling interest – holders of additional tier 1 capital
instruments                                                                     2,4             126            123             252
 – Non-controlling interest – ordinary shareholders                            >100             160             67             115
Total comprehensive income for the period                                      24,9           6 867          5 496          12 330
Basic earnings per share (cents)                                               26,2           1 379          1 093           2 417
Diluted earnings per share (cents)                                             26,1           1 353          1 073           2 372

Condensed consolidated
statement of financial position
at
                                                                                            30 June        30 June    31 December
                                                                                               2018           2017           2017
                                                                             Change     (Unaudited)     (Reviewed)      (Audited)
                                                                                (%)              Rm             Rm             Rm
Assets                                                                                                                             
Cash and cash equivalents                                                    (41,9)          11 222         19 314         16 900
Other short-term securities                                                     3,8          94 226         90 741         92 775
Derivative financial instruments                                               49,8          28 058         18 727         29 904
Government and other securities                                                55,6          76 730         49 306         49 241
Loans and advances                                                              0,4         712 668        709 864        710 329
Other assets                                                                   >100          23 441         10 691         14 589
Current taxation assets                                                        >100             922            159            211
Investment securities(1)                                                       11,9          20 837         18 622         19 803
Non-current assets held for sale                                             (35,5)             382            592            388
Investments in associate companies(1)                                         (6,6)           3 103          3 323          3 553
Deferred taxation assets                                                       >100             341            145            189
Investment property                                                                                             21                 
Property and equipment                                                        (0,2)           8 630          8 644          8 902
Long-term employee benefit assets                                            (16,0)           4 675          5 563          5 924
Mandatory reserve deposits with central banks                                  10,4          21 596         19 556         19 222
Intangible assets                                                              15,4          12 184         10 562         11 384
Total assets                                                                    5,5       1 019 015        965 830        983 314
Equity and liabilities                                                                                                           
Ordinary share capital                                                          0,4             484            482            482
Ordinary share premium                                                          3,4          19 332         18 698         18 688
Reserves                                                                        5,9          62 285         58 824         62 653
Total equity attributable to equity holders of the parent                       5,3          82 101         78 004         81 823
Holders of preference shares                                                                  3 222          3 222          3 222
Non-controlling interest attributable to holders of additiona
tier 1 capital instruments                                                      0,5           2 634          2 622          2 635
Non-controlling interest attributable to ordinary shareholders                 23,9           1 005            811            859
Total equity                                                                    5,1          88 962         84 659         88 539
Derivative financial instruments                                               95,2          25 394         13 011         23 367
Amounts owed to depositors                                                      5,0         801 165        762 712        771 584
Provisions and other liabilities                                                3,7          25 638         24 728         23 292
Current taxation liabilities                                                   37,4             239            174            259
Deferred taxation liabilities                                                (29,8)             765          1 089            761
Long-term employee benefit liabilities                                       (21,0)           2 812          3 561          3 525
Investment contract liabilities                                                 5,2          18 316         17 405         18 134
Insurance contract liabilities                                               (19,9)           2 044          2 553          2 277
Long-term debt instruments                                                    (4,0)          53 680         55 938         51 576
Total liabilities                                                               5,5         930 053        881 171        894 775
Total equity and liabilities                                                    5,5       1 019 015        965 830        983 314

(1) During the period the group reviewed the classification of certain investments on the statement of financial position. As a result of this review the group's
    private-equity investments have been reclassified from investments in private-equity associates, associate companies and joint arrangements to investment
    securities better to reflect the measurement of these investments at fair value. To provide comparability the prior-period balances have been restated accordingly
    (30 June 2017: R2 642m; 31 December 2017: R3 169m). The investments in private-equity associates, associate companies and joint arrangements were renamed
    investments in associate companies.

    Condensed consolidated
    statement of changes in equity
                                                                                                  Non-
                                                                                           controlling
                                                                                              interest           Non-
                                                         Total equity                     attributable    controlling
                                                         attributable          Equity    to additional       interest
                                                            to equity    attributable   tier 1 capital   attributable
                                                           holders of   to preference       instrument    to ordinary
                                                           the parent    shareholders          holders   shareholders   Total equity
                                                                   Rm              Rm               Rm             Rm             Rm
Audited balance at 31 December 2016                            75 733           3 222            2 000            756         81 711
Additional tier 1 capital instruments issued                                                       600                           600
Dividend to shareholders                                      (3 109)                                            (12)        (3 121)
Additional tier 1 capital instruments interest paid                                              (101)                         (101)
Preference share dividend                                                       (175)                                          (175)
Issues of shares net of expenses                                  687                                                            687
Shares (acquired)/no longer held by group entities and
BEE trusts                                                       (61)                                                           (61)
Total comprehensive income for the period                       5 131             175              123             67          5 496
Share-based payment reserve movement                            (391)                                                          (391)
Other movements                                                    14                                                             14
Reviewed balance at 30 June 2017                               78 004           3 222            2 622            811         84 659
Dividend to shareholders                                      (2 971)                                                        (2 971)
Additional tier 1 capital instruments interest paid                                              (116)                         (116)
Preference share dividend                                                       (163)                                          (163)
Shares (acquired)/no longer held by group entities and
BEE trusts                                                       (10)                                                           (10)
Total comprehensive income for the period                       6 494             163              129             48          6 834
Share-based payment reserve movement                              326                                                            326
Other movements                                                  (20)                                                           (20)
Audited balance at 31 December 2017                            81 823           3 222            2 635            859         88 539
Impact of adopting IFRS 9, net of taxation                    (2 964)                                            (14)        (2 978)
Impact of adopting IFRS 15, net of taxation                     (254)                                                          (254)
Restated balance at 31 December 2017                           78 605           3 222            2 635            845         85 307
Dividend to shareholders                                      (3 347)                                                        (3 347)
Additional tier 1 capital instruments interest paid                                              (127)                         (127)
Preference share dividend                                                       (158)                                          (158)
Issues of shares net of expenses                                  628                                                            628
Shares (acquired)/no longer held by group entities and
BEE trusts                                                       (12)                                                           (12)
Total comprehensive income for the period                       6 423             158              126            160          6 867
Share-based payment reserve movement                            (191)                                                          (191)
Other movements                                                   (5)                                                            (5)
Unaudited balance at 30 June 2018                              82 101           3 222            2 634          1 005         88 962

Condensed consolidated
statement of cashflows
for the period ended
                                                                            30 June       30 June   31 December
                                                                               2018          2017          2017
                                                                        (Unaudited)    (Reviewed)     (Audited)
                                                                                 Rm            Rm            Rm
Cash generated by operations                                                 13 052        12 565        25 351
Change in funds for operating activities                                   (10 130)      (14 248)      (17 407)
Net cash from/(utilsed by) operating activities before taxation               2 922       (1 683)         7 944
Taxation paid                                                               (2 414)       (1 851)       (4 730)
Cashflows from/(utilised by) operating activities                              508        (3 534)         3 214
Cashflows utilised by investing activities                                  (2 576)       (3 543)       (6 119)
Cashflows (utilised by)/from financing activities                             (882)         1 081       (5 946)
Effects of exchange rate changes on opening cash and cash equivalents         (354)         (218)         (111)
Net decrease in cash and cash equivalents                                   (3 304)       (6 214)       (8 962)
Cash and cash equivalents at the beginning of the period(1)                  36 122        45 084        45 084
Cash and cash equivalents at the end of the period(1)                        32 818        38 870        36 122

(1) Including mandatory reserve deposits with central banks.

Notes to the unaudited condensed consolidated financial statements for the period ended
30 June 2018*

Significant accounting policies
CHANGE IN ACCOUNTING POLICIES: FINANCIAL INSTRUMENTS
IFRS 9: Financial Instruments (IFRS 9) was issued in July 2014 and has replaced IAS 39: Financial Instruments: Recognition and
Measurement (IAS 39). The standard was effective and was implemented by the group from 1 January 2018. This standard
incorporates amendments to the classification and measurement of financial instruments [see part (ii)], hedge accounting guidance
and the accounting requirements for the impairment of financial assets measured at amortised cost and fair value through OCI [see
part (iii)]. The group has elected to continue to apply the hedge accounting requirements of IAS 39 on adoption of IFRS 9.
For notes disclosures the consequential amendments to IFRS 7: Financial Instruments: Disclosures have also been applied only to the
current period. Notes disclosures for the comparative period repeat those disclosures made in the previous year. Set out below are
disclosures relating to the impact of the adoption of IFRS 9 on the group.

The group's approach to transition is discussed and the resultant net impact on opening reserves on 1 January 2018 is provided in
part (i).

(i) Transition
As permitted by the transitional provisions of IFRS 9, the group has elected not to restate comparative figures. Any adjustments to
the carrying amounts of financial assets and financial liabilities at the date of transition have been recognised in the opening retained
earnings and other reserves at 1 January 2018. The following table illustrates the impact on opening reserves on transition to IFRS 9.
Further information relating to this impact is provided in part (ii) and part (iii).

                                                                   Balance at           IFRS 9         IFRS 15       Adjusted
                                                                  31 December     transitional    transitional   balance at 1
                                                                         2017      adjustments     adjustments   January 2018
Rm                                                                  (Audited)      (Unaudited)     (Unaudited)    (Unaudited)
Ordinary share capital and share premium                               19 170                                          19 170
Retained earnings                                                      60 546          (3 584)           (254)         56 708
Other reserves                                                          2 107              620                          2 727
Total equity attributable to equity holders of the parent              81 823          (2 964)           (254)         78 605
Holders of preference shares                                            3 222                                           3 222
Non-controlling interest attributable to holders of additional
tier 1 capital instruments                                              2 635                                           2 635
Non-controlling interest attributable to ordinary shareholders            859             (14)                            845
Total equity                                                           88 539          (2 978)           (254)         85 307

(ii) Classification and measurement
Financial assets are classified based on:
- the business model within which the financial assets are held and managed; and
- the contractual cashflow characteristics of the financial assets, ie whether the cashflows represent 'solely payments of principal
  and interest'.

Financial assets are measured at amortised cost if they are held within a business model of which the objective is to hold those assets
for the purpose of collecting contractual cashflows and those cashflows comprise solely payments of principal and interest (ie 'hold to
collect' business model).

Financial assets are measured at FVOCI if they are held within a business model of which the objective is achieved by both collecting
contractual cashflows and selling financial assets, and those contractual cashflows comprise solely payments of principal and interest
(ie 'hold to collect and sell' business model). Movements in the carrying amount of these financial assets are taken through OCI,
except for impairment gains or losses, interest revenue and foreign exchange gains or losses, which are recognised in profit or loss.
Where the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit
or loss.

The remaining financial assets are measured at fair value through profit or loss (FVTPL). All derivative instruments that are either
financial assets or financial liabilities will continue to be classified as held for trading and measured at FVTPL.
For equity investments that are held neither for trading nor for contingent consideration the group may irrevocably elect to present
subsequent changes in fair value of these equity investments in OCI. Where the equity investment is derecognised, the cumulative
gain or loss previously recognised in OCI is not reclassified from equity to profit or loss. However, it may be reclassified in equity.
Alternatively, where the group does not make the abovementioned election, fair-value changes are recognised in profit or loss. This
election is made on an investment-by-investment basis. On initial recognition the group may irrevocably designate a financial asset
otherwise meeting the requirements for measurement at amortised cost or FVOCI, as FVTPL, if doing so eliminates or significantly
reduces an accounting mismatch that would otherwise arise.

The accounting for financial liabilities is largely unchanged, except for financial liabilities designated at FVTPL. Changes in the fair
value of these financial liabilities that are attributable to the group's own credit risk are recognised in OCI. Where the financial liability
is derecognised, the cumulative gain or loss previously recognised in OCI is not reclassified from equity to profit or loss. However, it
may be reclassified in equity.

On the initial application of IFRS 9 an entity may revoke its previous designation of financial assets and financial liabilities measured
at FVTPL (fair-value option), with the loans being reclassified in amortised cost or FVOCI, depending on the entity's business model
for the asset.

The following table facilitates a measurement category comparison between IAS 39 and IFRS 9:
                                                                                                                                          IFRS 9 measurement categories
                                  Carrying                         IFRS 9:                                                                     FVOCI                          FVTPL
                                    amount    IFRS 9: ECL   Classification                                      Carrying                                                                                   Non-financial
                               31 December     remeasure-     and measure-                       IFRS 15:         amount                          Debt         Equity    Mandatory at    Designated at  assets, liabili-
                                      2017           ment             ment     IFRS 9: ETI       Revenue  1 January 2018  Amortised cost   instruments    instruments      fair value       fair value   ties and equity
Rm                             (Unaudited)    (Unaudited)      (Unaudited)     (Unaudited)    (Unaudited)    (Unaudited)     (Unaudited)   (Unaudited)    (Unaudited)     (Unaudited)      (Unaudited)       (Unaudited)
Amortised Cost                     731 952        (2 785)               54                                       729 221         705 638        18 583                          5 000                                    
FVTPL                              201 036                           (258)                                       200 778          61 580                                      135 415            3 783                  
Available for sale                  19 775                                                                        19 775           3 454        14 263            923           1 135                                  
Non-financial assets                30 551            855               60           (780)                        30 686                                                                                         30 686
Total assets                       983 314        (1 930)            (144)           (780)             –         980 460         770 672        32 846            923         141 550            3 783           30 686

Financial liabilities at
amortised cost                     759 004            205            (112)                                       759 097         759 097                                                                                
FVTPL                              127 369                                                                       127 369          59 655                                       67 406              308                   
Non-financial liabilities            8 402                              31                           254           8 687                                                                                          8 687
Equity                              88 539        (2 135)             (63)           (780)         (254)          85 307                                                                                         85 307
Total equity and liabilities       983 314        (1 930)            (144)           (780)             –         980 460         818 752              –              –         67 406              308           93 994

The following table illustrates the original assessment categories under IAS 39, the new measurement categories under IFRS 9 for each class of the group's financial assets at 1 January 2018 and
the reclassifications between the IAS 39 measurement categories and the IFRS 9 measurement categories:

                                                                                                                                                IFRS 9 reclassification to:
                                     Carrying                         IFRS 9:                                                                     FVOCI                           FVTPL
                                       amount     IFRS 9: ECL  Classification                                        Carrying
                                  31 December      remeasure-    and measure-                        IFRS 15:          amount     Amortised           Debt          Equity   Mandatory at     Designated at    Non-financial
                                         2017            ment            ment     IFRS 9: ETI         Revenue  1 January 2018       cost(1) instruments(2)   instruments    fair value(3)       fair value           assets
Rm                                (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)    (Unaudited)      (Unaudited)   (Unaudited)    (Unaudited)   (Unaudited)      (Unaudited)       (Unaudited)      (Unaudited)
Financial assets                                                                                                                                                                                                    
Cash and cash equivalents              16 900             (1)                                                          16 899        16 899                                                                                 
Other short-term securities            92 775             (8)                                                          92 767        26 105         14 264                         51 907               491                 
Derivative financial 
instruments                            29 904                                                                          29 904                                                      29 904                                    
Government and other 
securities                             49 241             (8)              39                                          49 272       37 314                                         11 835               123                 
Loans and advances                    710 329         (2 752)           (504)                                         707 073      656 248          18 582                         32 243                                    
Other assets                           14 589            (16)                                                          14 573       14 573                                                                                   
Investment securities                  19 803                             261                                          20 064          311                           923           15 661             3 169                 
Investments in associate 
companies                               3 553                                            (780)                          2 773                                                                                         2 773
Mandatory reserve deposits 
with central banks                     19 222                                                                          19 222       19 222                                                                                  
Current and deferred 
taxation assets                           400             855              60                                           1 315                                                                                         1 315
Other non-financial assets             26 598                                                                          26 598                                                                                        26 598
Total assets                          983 314         (1 930)           (144)            (780)             –          980 460      770 672         32 846             923         141 550             3 783          30 686
  
Financial liabilities                                                                                                                                                                                                       
Derivative financial 
instruments                            23 367                                                                          23 367                                                      23 367                                   
Amounts owed to depositors            771 584                           (112)                                         771 472      752 816                                         18 452              204                  
Provisions and other 
liabilities                            23 292             205                                            347           23 844       14 464                                          7 453                             1 927
Investment contract 
liabilities                            18 134                                                                          18 134                                                      18 134                                  
Long-term debt instruments             51 576                                                                          51 576       51 472                                                             104                 
Current and deferred 
taxation liabilities                    1 020                              31                           (93)              958                                                                                           958
Other non-financial liabilities         5 802                                                                           5 802                                                                                         5 802
Equity                                 88 539         (2 135)            (63)            (780)         (254)           85 307                                                                                        85 307
Total equity and liabilities          983 314         (1 930)           (144)            (780)             –          980 460       818 752              –              –          67 406              308           93 994
 
(1) Macro fair-value hedge accounting solution – Nedbank has adopted a macro fair-value hedge accounting solution that accounts for changes in the fair value of interest rate risk.
(2) Held for distribution (FVOCI) – In light of the business model requirements certain instruments have been reclassified from amortised cost to FVOCI.
(3) Held for sale (FVTPL) – In light of the business model requirements certain instruments have been reclassified from amortised cost to FVTPL.

The following table illustrates the IFRS 9 classification and measurement transitional impact:

                                                                                        FVTPL
                                                                                     business        Review of
                                                                          FVOCI     model and        effective   Classification
                                                               Hedge   business   contractual    interest rate              and
                                                       accounting(1)   model(2)  cashflows(3)         guidance      measurement
Assets                                                                                                                         
Cash, government and other securities, and derivative
financial instruments                                             39                                                         39
Loans and advances                                             (297)        820         (369)            (658)            (504)
Current and deferred taxation assets                              72      (227)            31              184               60
Investment securities                                                                     261                               261
Total assets                                                   (186)        593          (77)            (474)            (144)
Total equity                                                   (105)        593          (77)            (474)             (63)
Amounts owed to depositors and other liabilities               (112)                                                      (112)
Current and deferred taxation liabilities                         31                                                         31
Total liabilities                                               (81)          –             –                –             (81)
Total liabilities and equity                                   (186)        593          (77)            (474)            (144)

(1) Macro fair-value hedge accounting solution – Nedbank has adopted a macro fair-value hedge accounting solution that accounts for changes in the fair value of
    interest rate risk.
(2) Held for distribution (FVOCI) – In light of the business model requirements certain instruments have been reclassified from amortised cost to FVOCI.
(3) Held for sale (FVTPL) – In light of the business model requirements certain instruments have been reclassified from amortised cost to FVTPL.

On initial application of IFRS 9 on 1 January 2018 the group elected to revoke the existing designation of R58bn of loans classified
in FVTPL and R60bn of amounts due to depositors classified at FVTPL under the fair-value option of IAS 39, and reclassified the
underlying assets and liabilities in amortised cost.

(iii) Impairments
Impairments in terms of IFRS 9 are determined based on an ECL model, as opposed to an incurred loss model in terms of IAS 39.
The ECL model applies to financial assets measured at amortised cost and debt instruments at FVOCI, lease receivables and certain
loan commitments as well as financial guarantee contracts.

Under IFRS 9 loss allowances are measured on either of the following bases:

- twelve-month ECLs: these are ECLs that result from possible default events within the 12 months after the reporting date; and
- lifetime ECLs: these are ECLs that result from all possible default events over the expected life of a financial instrument.

The group is required to recognise an allowance for either 12-month or lifetime ECLs, depending on whether there has been a
significant increase in credit risk (SICR) since initial recognition. Indicators of a SICR in the retail portfolio may include any of
the following:

- Short-term forbearance.
- Direct debit cancellation.
- Extension to the terms granted.
- Previous arrears within the past months.
Indicators of a significant increase in credit risk in the wholesale portfolio may include any of the following:
- Significant increase in the credit spread.
- Significant adverse changes in business, financial and/or economic conditions in which the client operates.
- Actual or expected forbearance or restructuring.
- Significant change in collateral value.
-  Early signs of liquidity and cashflow problems, such as a delay in the servicing of trade creditors/loans.

Measurement of ECLs
The measurement of ECLs reflects a probability-weighted outcome, the time value of money and the entity's best available
forward-looking information. The abovementioned probability-weighted outcome considers the possibility of a credit loss occurring
and the possibility of no credit loss occurring, even if the possibility of a credit loss occurring is low. Credit losses are measured as the
present value of all cash shortfalls (ie the difference between the cashflows due to the entity in accordance with the contract and the
cashflows that the group expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

The assessment of the ECL of a financial asset or portfolio of financial assets entails estimations of the likelihood of defaults
occurring and of default correlations between counterparties. The group measures ECL using probability of default (PD), exposure at
default (EAD) and loss given default (LGD). These three components are multiplied together and adjusted for the likelihood of default.
The calculated ECL is then discounted using the original effective interest rate of the financial asset.

The assessment of SICR and the calculation of ECL both incorporate forward-looking information. The group has performed historical
analyses and identified the key economic variables impacting credit risk and ECL for each portfolio. These economic variables and
their associated impact on the PD, EAD and LGD vary by financial instrument. The group's economics unit provides a forecast of
economic variables and an overview of the economy quarterly or more often if necessary. Significant judgement and estimates are
applied in this process of incorporating forward-looking information into the SICR assessment and ECL calculation.

Credit-impaired financial assets
At each reporting date the group assesses whether financial assets carried at amortised cost and debt securities at FVOCI are credit-impaired. A financial asset is credit-impaired when one or
more events that have a detrimental impact on the estimated future cashflows of the financial asset have occurred. The group's definition of credit-impaired is aligned to our internal definition
of default.

Presentation of impairment
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets, and the amortised cost is presented on the face of the statement of
financial position.

For debt securities at FVOCI the loss allowance is recognised in OCI, instead of reducing the carrying amount of the asset.
For off-balance-sheet exposures, such as financial guarantee contracts, the loss allowance is presented in 'Provisions and other liabilities' on the face of the statement of financial position.
The following table illustrates the closing specific and portfolio impairment allowances in terms of IAS 39 and the opening impairment allowances in terms of IFRS 9:

                                                               IAS 39 impairment provisions
                                                                   at 31 December 2017                                            IFRS 9 ECL provision at 1 January 2018
                                                                                                                                         Stage 2: Lifetime
                                                                                                                              Stage 1:     ECL allowance –  Stage 3: Lifetime
                                                            Portfolio       Specific    Total IAS 39   Reclassification   12-month ECL      not credit-im-   ECL allowance –      Total ECL on  
                                                           impairment     impairment       provision           in FVTPL      allowance              paired   credit-impaired    1 January 2018      ECL impact
Rm                                                          (Audited)      (Audited)       (Audited)        (Unaudited)    (Unaudited)         (Unaudited)       (Unaudited)       (Unaudited)     (Unaudited)
Financial assets                                                                                                                                                                                          
Loans and advances                                              4 921          7 081          12 002              (545)          2 693               3 821             7 695            14 209         (2 752)
 Home loans                                                       469          1 269           1 738                               274                 639             1 505             2 418           (680)
 Commercial mortgages                                             495            319             814                               314                 210               320               844            (30)
 Properties in possession                                                         27              27                                 2                   1                25                28             (1)
 Credit cards                                                     140          1 245           1 385                               421                 509             1 236             2 166           (781)
 Overdrafts                                                       144            596             740                               131                 144               602               877           (137)
 Other loans to clients                                         2 149          2 404           4 553              (501)            845               1 410             2 433             4 688           (636)
 Net finance lease and instalment debtors                       1 434          1 209           2 643                               680                 855             1 574             3 109           (466)
 Preference shares and debentures                                  90             12             102               (44)             26                  53                                  79            (21)
Cash and cash equivalents                                                                          –                                 1                                                       1             (1)
Other short-term securities                                                                        –                                 7                   1                                   8             (8)
Government and other securities                                                                    –                                 8                                                       8             (8)
Other assets                                                                                       –                                15                   1                                  16            (16)
                                                                                                                                                                                                           
Financial liabilities                                                                                                                                                                                      
Provisions and other liabilities                                                                   –                               82                   63                60               205           (205)
Total                                                           4 921          7 081          12 002              (545)         2 806                3 886             7 755            14 447         (2 990)
Total ECL recognised on FVOCI loans and advances                                                   –                               23                  144                                 167               
Total ECL allowance per statement of financial position                                            –                            2 783                3 742             7 755            14 280                
Total                                                               –              –               –                  –         2 806                3 886             7 755            14 447               –

A reconciliation between the opening balances of the IFRS 9 ECL allowance and the closing balances at 30 June 2018 is provided below:

                                                              Not credit-impaired           Credit-impaired 
                                                                                                Subject to
                                                                                                  lifetime
                                                             Subject to       Subject to     ECL – credit-
                                                           12-month ECL     lifetime ECL          impaired          Total
Rm                                                          (Unaudited)      (Unaudited)       (Unaudited)    (Unaudited)
Beginning of the period – 1 January 2018                          2 806            3 886             7 755         14 447
New financial assets originated or purchased                      1 028               53                51          1 132
Financial assets derecognised/written-off                          (37)             (47)           (2 303)        (2 387)
Repayments                                                        (238)              149             (132)          (221)
Transfers to 12-month ECL (stage 1)                                 196            (552)             (170)          (526)
Transfers to lifetime ECL (not credit-impaired – stage 2)         (302)            1 511             (352)            857
Transfers to lifetime ECL (credit-impaired – stage 3)             (548)          (1 204)             3 362          1 610
Foreign exchange and other movements                               (44)             (79)              (93)          (216)
End of the period – 30 June 2018                                  2 861            3 717             8 118         14 696

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
                                                 2018          2017       2017        2018         2017       2017      2018         2017      2017         2018         2017       2017
                                          (Unaudited)    (Reviewed)  (Audited) (Unaudited)   (Reviewed)  (Audited)  (Unaudited) (Reviewed) (Audited) (Unaudited)   (Reviewed)  (Audited)
                                                   Rm            Rm         Rm          Rm           Rm         Rm         Rm          Rm         Rm          Rm           Rm         Rm
                                                    Total assets                     Total liabilities                 Revenue(1)              Headline earnings/(losses)
Nedbank Corporate and Investment
Banking                                       497 796       479 359    487 632     464 671     448 288      457 195      7 407      6 997     14 380       3 296        3 211      6 315
Nedbank Retail and Business Banking           337 549       311 490    326 225     309 621     284 075      298 413     15 181     14 780     30 102       2 581        2 544      5 302
Nedbank Wealth                                 69 778        66 621     66 832      65 662      62 857       62 947      2 229      2 150      4 393         519          519      1 068
Rest of Africa                                 39 540        35 623     37 487      33 018      28 835       31 042      1 301      1 201      2 471         245      (1 092)      (810)
Centre                                         74 352        72 737     65 138      57 081      57 116       45 178        124        150        341          55           89       (88)
Total                                       1 019 015       965 830    983 314     930 053     881 171      894 775     26 242     25 278     51 687       6 696        5 271     11 787

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

Due to the group's strategic investment in ETI being in an associate company that the group does not control, the group's managed
operations exclude ETI-related assets, funding, equity-accounted earnings and associated after-tax funding costs. The Group EXCO
therefore separately reviews the performance of the group's managed operations and, on this basis, the total assets are R1 016 143m
(June 2017: 962 747m; December 2017: R979 994m), total liabilities are R928 122m (June 2017: R880 185m; December 2017: R892 919m),
revenue is R26 398m (June 2017: R25 418m; December 2017: R52 008m) and headline earnings is R6 562m (June 2017: R6 433m;
December 2017: R12 762m). ETI forms part of the Rest of Africa segment, whose segmental information on a managed-operations
basis include total assets of R36 675m (June 2017: R32 540m; December 2017: R34 167m), total liabilities of R31 094m (June 2017:
R27 849m; December 2017: R29 186m), revenue of R1 457m (June 2017: R1 341m; December 2017: R2 792m) and headline earnings of
R111m (June 2017: R70m; December 2017: R165m).

Headline earnings reconciliation
for the period ended

                                                    30 Jun         30 Jun        30 Jun       30 Jun       31 Dec      31 Dec
                                                      2018           2018          2017         2017         2017        2017
                                               (Unaudited)    (Unaudited)    (Reviewed)   (Reviewed)    (Audited)   (Audited)
                                       Change           Rm             Rm            Rm           Rm           Rm          Rm
                                                                   Net of                     Net of                   Net of
                                          (%)        Gross       taxation         Gross     taxation        Gross    taxation
Profit attributable to equity
holders of the parent                    27,0                       6 658                      5 244                   11 621
Non-trading and capital items            40,7           54             38            31           27          224         166
IAS 16: (Profit)/Loss on disposal of
property and equipment                                 (2)            (2)            16           12           47          35
IAS 38: Impairment of property,
equipment and intangible assets                         56             40                                     163         117
IAS 39: Loss on disposal of
available-for-sale financial assets                                                  15           15           14          14

                                         27,0                       6 696                      5 271                   11 787

Contingent liabilities and commitments
CONTINGENT LIABILITIES AND UNDRAWN FACILITIES
                                                                                30 June            30 June        31 December
                                                                                   2018               2017               2017
                                                                            (Unaudited)         (Reviewed)          (Audited)
at                                                                                   Rm                 Rm                 Rm
Guarantees on behalf of clients                                                  29 601             20 839             28 402
Letters of credit and discounting transactions                                    2 938              3 545              3 225
Irrevocable unutilised facilities and other                                     137 860             95 273            103 562
                                                                                170 399            119 657            135 189

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 be foreseen at present.

COMMITMENTS
Capital expenditure approved by directors
                                                                                30 June            30 June        31 December
                                                                                   2018               2017               2017
                                                                            (Unaudited)         (Reviewed)          (Audited)
at                                                                                   Rm                 Rm                 Rm
Contracted                                                                          348                402                463
Not yet contracted                                                                2 446              2 320              2 433
                                                                                  2 794              2 722              2 896

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

Investments in associate companies
                                                                                30 June            30 June        31 December
                                                                                   2018               2017               2017
                                                                            (Unaudited)         (Reviewed)          (Audited)
at                                                                                   Rm                 Rm                 Rm
Listed associates(1)                                                              2 865              3 083              3 320
Unlisted associates(2)                                                              238                240                233
                                                                                  3 103              3 323              3 553

(1) The group's investment in ETI is recorded under listed associates.
(2) During the period the group reviewed the classification of certain investments on the statement of financial position. As a result of this review the group's
    private-equity investments have been reclassified from investments in private-equity associates, associate companies and joint arrangements to investment
    securities better to reflect the measurement of these investments at fair value. To provide comparability the prior-period balances have been restated accordingly
    (30 June 2017: R2 642m; 31 December 2017: R3 169m). The investments in private-equity associates, associate companies and joint arrangements have been renamed
    investments in associate companies.

Listed associates: ETI                                                                                                                                            
Carrying value                                                                    2 865              3 083               3 320
Fair value of investment(1)                                                       4 643              3 045               3 597

(1) Based on the official USD/NGN exchange rate. Based on the NAFEX rate, the fair value is R3 983m (31 December 2017: R3 047m).

Cashflow information
                                                                                                                        30 June            30 June       31 December
                                                                                                                           2018               2017              2017
                                                                                                                    (Unaudited)         (Reviewed)         (Audited)
for the period ended                                                                                                         Rm                 Rm                Rm
Acquisition of property and equipment, computer software and development costs and
investment property                                                                                                     (1 765)            (1 193)           (3 299)
Issue of additional tier 1 capital instruments                                                                                                 600               600
Issue of long-term debt instruments                                                                                       4 503              7 080             7 540
Redemption of long-term debt instruments                                                                                (2 370)            (3 218)           (8 067)
Dividends to ordinary shareholders                                                                                      (3 347)            (3 109)           (6 080)
Preference share dividends paid                                                                                           (158)              (175)             (338)
Additional tier 1 capital instruments interest paid                                                                       (126)              (123)             (217)


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 valuation techniques. 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, a 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 those of 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
                                             2018          2017         2017       2018          2017         2017        2018          2017         2017       2018          2017         2017       2018          2017         2017
                                      (Unaudited)    (Reviewed)    (Audited) (Unaudited)   (Reviewed)    (Audited) (Unaudited)   (Reviewed)    (Audited) (Unaudited)   (Reviewed)    (Audited) (Unaudited)   (Reviewed)    (Audited)
                                               Rm           Rm            Rm          Rm           Rm           Rm          Rm           Rm           Rm          Rm           Rm           Rm          Rm           Rm           Rm
Cash and cash equivalents                  32 818       38 870        36 122      32 818       38 870       36 122                                                                                                                 
Other short-term securities                94 226       90 741        92 775      30 497       27 811       25 193                       33                   63 729       62 897       67 582                                      
Derivative financial instruments           28 058       18 727        29 904                                                24          103                   28 034       18 596       29 903                       28           1
Government and other securities            76 730       49 306        49 241      49 385       29 046       28 862      22 818        8 918       5 173        4 527       11 342       15 206                                      
Loans and advances                        712 668      709 864       710 329     676 319      625 987      632 156         591        2 550          78       35 758       81 205       78 062                      122          33
Other assets                               23 441       10 691        14 589      14 298        6 887        9 619       9 143        3 804       4 970                                                                            
Investment securities(1)                   20 837       18 622        19 803                                               508           31          37       14 109       14 766       15 184       6 220        3 825       4 582
                                          988 778      936 821       952 763     803 317      728 601      731 952      33 084       15 439      10 258      146 157      188 806      205 937       6 220        3 975       4 616

(1) During the period the group reviewed the classification of certain investments on the statement of financial position. As a result of this review the group's private-equity investments have been reclassified from investments in private-equity
    associates, associate companies and joint arrangements to investment securities better to reflect the measurement of these investments at fair value. To provide comparability the prior-period balances have been restated accordingly
    (30 June 2017: R2 642m; 31 December 2017: R3 169m). The investments in private-equity associates, associate companies and joint arrangements have been renamed investments in associate companies.

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
                                            2018          2017        2017       2018          2017         2017       2018          2017         2017       2018          2017         2017       2018          2017         2017
                                     (Unaudited)   (Reviewed)    (Audited) (Unaudited)   (Reviewed)    (Audited) (Unaudited)   (Reviewed)    (Audited) (Unaudited)   (Reviewed)    (Audited) (Unaudited)   (Reviewed)    (Audited)
                                              Rm           Rm           Rm          Rm           Rm           Rm          Rm           Rm           Rm          Rm           Rm           Rm          Rm           Rm           Rm
Derivative financial instruments          25 394       13 011       23 367                                                17           53                   25 377       12 958       23 367                                      
Amounts owed to depositors               801 165      762 712      771 584     765 981      689 397      693 621                                            35 184       73 315       77 963                                      
Provisions and other liabilities          23 601       23 191       21 712      14 498       11 533       14 259       8 506       11 264        6 983         145                        35         452          394          435
Investment contract liabilities           18 316       17 405       18 134                                                                                  18 316       17 405       18 134                                      
Long-term debt instruments                53 680       55 938       51 576      53 528       55 649       51 124                                               152          289          452                                      
                                         922 156      872 257      886 373     834 007      756 579      759 004       8 523       11 317        6 983      79 174      103 967      119 951         452          394          435

LEVEL 3 RECONCILIATION
                                                                                         Gains
                                                                                   relating to
                                                                                   investments
                                                                                     in equity
                                                                                   instruments
                                                                                      at FVOCI
                                                                  Losses in           and debt
                                                               non-interest        instruments
                                              Opening            revenue in        at FVOCI in                                                                     Closing
                                           balance at        profit for the        OCI for the       Purchases           Sales and                            balance at
                                                1 Jan                period             period       and issues        settlements         Transfers in           30 Jun
30 June 2018 (Unaudited)                           Rm                    Rm                 Rm               Rm                 Rm                  Rm                Rm
FINANCIAL ASSETS                                                                                                                                                         
Investment securities                           5 457                 (149)                  4            1 020                (135)                 23             6 220
                                                5 457                 (149)                  4            1 020                (135)                 23             6 220
                                                                                                                                                            
FINANCIAL LIABILITIES                                                                                                                                                     
Provisions and other liabilities                  435                   17                                                                                             452
                                                  435                   17                   –                 –                   –                  –                452

                                                                                      Gains in
                                                                                    fair-value
                                                                    Gains/         adjustments
                                                               (Losses) in       on available-
                                                              non-interest            for-sale
                                              Opening           revenue in           assets in                                                                    Closing
                                           balance at       profit for the         OCI for the        Purchases           Sales and                            balance at
                                                1 Jan               period              period       and issues         settlements         Transfers in           30 Jun
30 June 2017 (Reviewed)                            Rm                   Rm                  Rm               Rm                  Rm                   Rm               Rm
FINANCIAL ASSETS                                                                                                                                                         
Derivative financial instruments                   37                    9                                                      (18)                                   28
Loans and advances                                 77                   45                                                                                            122
Investment securities(1)                        3 449                 (52)                   2              523                (112)                  15            3 825
                                                3 563                    2                   2              523                (130)                  15            3 975

(1)  During the period the group reviewed the classification of certain investments on the statement of financial position. As a result of this review the group's private-equity 
     investments have been reclassified from investments in private-equity associates, associate companies and joint arrangements to investment securities better to reflect the 
     measurement of these investments at fair value. To provide comparability the prior-period balances have been restated accordingly (30 June 2017: R2 642m; 31 December 2017: R3 169m). 
     The investments in private-equity associates, associate companies and joint arrangements have been renamed investments in associate companies.
                                                                                                                                                            
FINANCIAL LIABILITIES                                                                                                                                                     
Provisions and other liabilities                  330                   64                                                                                             394
                                                  330                   64                   –                 –                   –                  –                394

                                                                                                       Gains in
                                                                                                    non-interest
                                                                                     Opening          revenue in                                                   Closing
                                                                                  balance at      profit for the          Purchases          Sales and          balance at
                                                                                       1 Jan                year         and issues        settlements              31 Dec
31 December 2017 (Audited)                                                                Rm                  Rm                 Rm                 Rm                  Rm
FINANCIAL ASSETS                                                                                                                                                        
Derivative financial instruments                                                          37                  18                                   (54)                  1
Loans and advances                                                                        77                  45                                   (89)                 33
Investment securities(1)                                                               3 449                  81              1 747               (695)              4 582
                                                                                       3 563                 144              1 747               (838)              4 616

(1) During the period the group reviewed the classification of certain investments on the statement of financial position. As a result of this review the group's private-equity 
    investments have been reclassified from investments in private-equity associates, associate companies and joint arrangements to investment securities better to reflect the 
    measurement of these investments at fair value. To provide comparability the prior-period balances have been restated accordingly (30 June 2017: R2 642m; 31 December 2017: R3 169m). 
    The investments in private-equity associates, associate companies and joint arrangements have been renamed investments in associate companies.
                                                                                                                                                                                                                                     
FINANCIAL LIABILITIES                                                                                                                                                                                                                               
Provisions and other liabilities                                                         330                105                                                        435
                                                                                         330                105                    –                  –                435

EFFECT OF CHANGES IN SIGNIFICANT UNOBSERVABLE ASSUMPTIONS TO REASONABLE POSSIBLE ALTERNATIVES
The fair value of financial instruments is, 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. When performing the stress testing, appropriate levels for the unobservable-input parameters are chosen so that
they are consistent with prevailing market evidence and in line with the group's approach to valuation control. The following information is intended to illustrate the potential impact of the relative
uncertainty in the fair value of financial instruments for which valuation is dependent on unobservable-input parameters and which are classified as level 3 in the fair-value hierarchy. However, the
disclosure is neither predictive nor indicative of future movements in fair value.

                                                                                                                                            Value per
                                                                                                                                            statement            Favourable        Unfavourable
                                                                                  Significant                       Variance in          of financial        change in fair      change in fair
                                                       Valuation technique        unobservable input                 fair value              position                 value               value
30 June 2018 (Unaudited)                                                                                                      %                    Rm                    Rm                  Rm
FINANCIAL ASSETS                                                                                                                                                                                     
                                                       Discounted
                                                       cashflows, adjusted
                                                       net asset value,
                                                       earnings multiples,         Valuation multiples,
                                                       third-party                 correlations,
                                                       valuations, dividend        volatilities and credit         Between (10)
Investment securities                                  yields                      spreads                               and 13                 6 220                  787                (636)
Total financial assets classified as level 3                                                                                                    6 220                  787                (636)
   
FINANCIAL LIABILITIES                                                                                                                                                             
                                                       Discounted                                                       Between
                                                       cashflows, earnings         Discount rates,                   (10,0) and
Provisions and other liabilities                       multiples                   forecasts                               10,0                 (452)                  45                 (45)
   
                                                                                                                                            Value per
                                                                                                                                            statement          Favourable         Unfavourable
                                                                                     Significant                    Variance in          of financial           change in       change in fair
                                                      Valuation technique            unobservable input              fair value              position          fair value                value
30 June 2017 (Reviewed)                                                                                                       %                    Rm                  Rm                   Rm
FINANCIAL ASSETS                                                                                                                                                                          
                                                      Discounted                     Discount rates,                    Between
                                                      cashflows                      earnings before             (11,5) and 9,0
                                                                                     interest, tax and   
                                                                                     depreciation and   
Derivative financial instruments                                                     amortisation                                                  28                   3                  (3)
                                                      Discounted                     Credit spreads and                 Between
Loans and advances                                    cashflows                      discount rates              (11,5) and 9,0                   122                  11                 (14)
                                                      Discounted                     Valuation multiples,               Between
                                                      cashflows, adjusted            correlations,               (11,5) and 9,0
                                                      net asset value,               volatilities and credit   
                                                      earnings multiples,            spreads   
                                                      third-party   
                                                      valuations, dividend   
Investment securities(1)                              yields                                                                                   3 825                  348                (439)
Total financial assets classified as level 3                                                                                                   3 975                  362                (456)

(1) During the period the group reviewed the classification of certain investments on the statement of financial position. As a result of this review the group's private-equity investments have 
    been reclassified from investments in private-equity associates, associate companies and joint arrangements to investment securities better to reflect the measurement of these investments 
    at fair value. To provide comparability the prior-period balances have been restated accordingly (30 June 2017: R2 642m; 31 December 2017: R3 169m). The investments in private-equity associates, 
    associate companies and joint arrangements have been renamed investments in associate companies.

                                                                                                                            Value per
                                                                                                                            statement        Favourable             Unfavourable
                                                                         Significant                   Variance in       of financial         change in           change in fair
                                               Valuation technique       unobservable input             fair value           position        fair value                    value
30 June 2017 (Reviewed)                                                                                          %                 Rm                Rm                       Rm
                                                                                                                                                                
FINANCIAL LIABILITIES                                                                                                                                                           
                                               Discounted                                                  Between
                                               cashflows, earnings       Discount rates,                    (10,0)
Provisions and other liabilities               multiples                 forecasts                        and 10,0              (394)                39                     (39)

                                                                                                                            Value per
                                                                                                                            statement        Favourable             Unfavourable
                                                                         Significant                   Variance in       of financial         change in           change in fair
                                               Valuation technique       unobservable input             fair value           position        fair value                    value
31 December 2017 (Audited)                                                                                       %                 Rm                Rm                       Rm
FINANCIAL ASSETS                                                                                                                                                                
                                               Discounted                Discount rates,              Between (12)
Derivative financial instruments               cashflows                 Ebitda                              and 9                  1                (1)                     (1) 

                                               Discounted                Credit spreads and           Between (12)
Loans and advances                             cashflows                 discount rates                      and 9                 33                 3                      (4)
                                               Discounted                Valuation multiples,         Between (12)
                                               cashflows, adjusted       correlations,                       and 9
                                               net asset value,          volatilities and credit
                                               earnings multiples,       spreads
                                               third-party
                                               valuations, dividend
Investment securities(2)                       yields                                                                           4 582               428                    (538)
Total financial assets classified as level 3                                                                                    4 616               432                    (541)

(1) Represents amounts less than R1m.
(2) During the period the group reviewed the classification of certain investments on the statement of financial position. As a result of this review the group's private-equity investments 
    have been reclassified from investments in private-equity associates, associate companies and joint arrangements to investment securities better to reflect the measurement of these 
    investments at fair value. To provide comparability the prior-period balances have been restated accordingly (30 June 2017: R2 642m; 31 December 2017: R3 169m). The investments in 
    private-equity associates, associate companies and joint arrangements have been renamed investments in associate companies.

FINANCIAL LIABILITIES                                                                                                                                                                                                                                 
                                              Discounted cashflow, Discount rates,                       Between (10)
Provisions and other liabilities              earnings multiples   forecasts                                  and 10                    (435)                 36                (43)

UNREALISED GAINS
The unrealised gains arising on instruments classified as level 3 include the following:

                                                                                              30 June        30 June   31 December
                                                                                                 2018           2017          2017
                                                                                           (Unaudited)    (Reviewed)      (Audited)
                                                                                                   Rm            Rm             Rm
Private-equity (losses)/gains                                                                     (149)            2           144

SUMMARY OF PRINCIPAL VALUATION TECHNIQUES — LEVEL 2 INSTRUMENTS (UNAUDITED)
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 rates 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 models             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 rates 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 (UNAUDITED)
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 and are measured 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:

                                                             Carrying
Rm                                                              value      Fair value        Level 1        Level 2         Level 3
30 June 2018 (Unaudited)                                                                                                           
Financial assets                                              756 201        751 766          24 679         54 758         672 329
 Other short-term securities                                   30 497         30 457                         30 457                 
 Government and other securities                               49 385         48 980          24 679         24 301                 
 Loans and advances                                           676 319        672 329                                        672 329
Financial liabilities                                          53 528         55 042          20 758         34 284               –
 Long-term debt instruments                                    53 528         55 042          20 758         34 284                 

                                                             Carrying
Rm                                                              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                

                                                             Carrying
Rm                                                              value     Fair value         Level 1        Level 2         Level 3
31 December 2017 (Audited)                                                                                                          
Financial assets                                              686 211        681 307          23 993         29 962         627 352
 Other short-term securities                                   25 193         25 130                         25 130                
 Government and other securities                               28 862         28 825          23 993          4 832                
 Loans and advances                                           632 156        627 352                                        627 352
Financial liabilities                                          51 124         52 018          23 975         28 043               –
 Long-term debt instruments                                    51 124         52 018          23 975         28 043                 

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

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 disposal 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 IFRS 9 expected
credit losses, 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 (PD) and loss given defaults (LGDs) for the
periods 2019 to 2021 (2017: for periods 2018 to 2020) are based on the latest available internal data and is applied to the projected
cashflows of the first three years. 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              Total
                                                                                                                                         unweighted            weighted
                                                                                                                                           value(1)            value(2)
Rm                                                                                                                                        (average)           (average)
                                                                                                                                                                      
Total high-quality liquid assets                                                                                                                                148 675
Cash outflows                                                                                                                                                         
Retail deposits and deposits from small-business clients                                                                                    177 418              17 570
    Stable deposits                                                                                                                           3 442                 172
    Less stable deposits                                                                                                                    173 976              17 398
Unsecured wholesale funding                                                                                                                 251 871             129 708
    Operational deposits (all counterparties) and deposits in institutional networks of cooperative banks                                   119 797              29 949
    Non-operational deposits (all counterparties)                                                                                           131 285              98 970
    Unsecured debt                                                                                                                              789                 789
Secured wholesale funding                                                                                                                    24 566                   
Additional requirements                                                                                                                     109 936              20 453
    Outflows related to derivative exposures and other collateral requirements                                                                1 553               1 553
    Credit and liquidity facilities                                                                                                         108 383              18 900
Other contingent funding obligations                                                                                                        174 816               8 960
Total cash outflows                                                                                                                         738 607             176 691
                                                                                                                                                                      
Cash inflows                                                                                                                                                          
Secured lending (eg reverse repurchase agreements)                                                                                            9 318                  20
Inflows from fully performing exposures                                                                                                      56 103              37 498
Other cash inflows                                                                                                                            5 291               5 144
Total cash inflows                                                                                                                           70 712              42 662

                                                                                                                                                                  Total
                                                                                                                                                               adjusted
                                                                                                                                                                  value
Total HQLA                                                                                                                                                      148 675
Total net cash outflows(3)                                                                                                                                      139 043
Liquidity coverage ratio (%)                                                                                                                                     106,9%


(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 2018 for Nedbank Limited and the
simple average of the month-end values at 30 April 2018, 31 May 2018 and 30 June 2018 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.

Net stable funding ratio
                                                                      Unweighted value by residual maturity
                                                                                           > 6 months to                  Weighted
Rm                                                           No maturity   <= 6 months            1 year       > 1 year      value
Available stable funding                                                                                                         
  Capital                                                         87 790              –               –              –      87 790
    Regulatory capital                                            83 654                                                    83 654
    Other capital instruments                                      4 136                                                     4 136
  Retail deposits and deposits from small-business
  clients                                                              –        214 581           13 539        23 194     228 664
    Stable deposits                                                               3 259                1                     3 096
    Less stable deposits                                                        211 322           13 538        23 194     225 568
  Wholesale funding                                                    –        414 557           67 715       132 057     324 415
    Operational deposits                                                        135 063                                     67 532
    Other wholesale funding                                                     279 494           67 715       132 057     256 883
  Other liabilities                                               11 218          6 793                –        11 061       7 478
    Net stable funding ratio (NSFR) derivative liabilities                                                       9 560             
    All other liabilities and equity not included in the
    above categories                                              11 218          6 793                          1 501       7 478

  Total ASF                                                                                                                648 347
                                                                                                                                 
Required stable funding                                                                                                          
  Total NSFR high-quality liquid assets (HQLA)                                                                              12 582
  Performing loans and securities                                      –        188 916           70 329       474 866     489 702
    Performing loans to financial institutions secured
  by level 1 HQLA                                                                11 834                                      1 183
    Performing loans to financial institutions secured
    by non-level 1 HQLA and unsecured performing 
  loans to financial institutions                                                51 624            7 393        26 013      37 453
    Performing loans to non-financial corporate clients,
    loans to retail and small-business clients and loans
    to sovereigns, central banks and public sector
  enterprises, of which                                                         112 246           57 239       314 330     349 065
      with a risk weight of less than or equal to 35%
      under the Basel II Standardised Approach for
      credit risk                                                                                               14 291       9 289
    Performing residential mortgages, of which                                    9 083            2 489       120 615      86 511
     with a risk weight of less than or equal to 35%
     under the Basel II Standardised Approach for 
     credit risk                                                                  9 083            2 489       108 990      76 629
    Securities that are not in default and do not qualify
    as HQLA, including exchange-traded equities                                   4 129            3 208        13 908      15 490
  Other assets                                                     8 642             89                –        53 822      44 362
    Physical traded commodities, including gold                       49                                                        41
    NSFR derivative assets                                                                                       9 489             
    NSFR derivative liabilities before deduction of
    variation margin posted                                                                                      9 561         956
    All other assets not included in the above categories          8 593             89                         34 772      43 365
  Off-balance-sheet items                                                                                      292 486      10 240
  Total required stable funding                                                                                            556 886
  NSFR (%)                                                                                                                  116,4%

The figures above reflect the quarter ending June 2018 , based on regulatory submissions to SARB, where applicable. This section on
the net stable funding ratio has not been audited or reviewed by the group's auditors.

Definitions

Assets under administration (AUA) (Rm) Market value of assets held in custody on behalf of clients.
Assets under management (AUM) (Rm) Market value of assets managed on behalf of clients.

Common-equity tier 1 (CET1) capital adequacy ratio (%) CET1 regulatory capital, including unappropriated profit, as a percentage
of total risk-weighted assets.

Credit loss ratio (CLR) – banking advances (%) Impairments charge on loans and advances in the consolidated statement of
comprehensive income as a percentage of daily average gross loans and advances. 

Default Default occurs in respect of a particular client in the following instances:

- When the bank considers that the client is unlikely to pay its credit obligations to the bank in full without the bank having
  recourse to actions such as realising security (if held).
- When the client is past due for more than 90 days on any material credit obligation to the bank. Overdrafts will be
  considered as being past due if the client has breached an advised limit or has been advised of a limit smaller than the
  current outstanding amount.
- In terms of Nedbank's Group Credit Policy, when the client is placed under business rescue in terms of the Companies Act,
  71 of 2008, and when the client requests a restructure of his facilities as a result of financial distress.

Defaulted loans and advances (non-performing defaulted advances) Any advance or group of loans and advances that has
triggered the Basel III definition of default criteria and is in line with the revised SA banking regulations. For retail portfolios
this is product-centred and a default would therefore be specific to a client or borrower account (a specific advance). For all
other portfolios, except specialised lending, it is client- or borrower-centred, meaning that should any transaction within a
borrowing group default, all transactions within the borrowing group would be treated as having defaulted.

At a minimum a default is deemed to have occurred where a material obligation is past due for more than 90 days or a client
has exceeded an advised limit for more than 90 days. A specific impairment is raised against such a credit exposure due to a
significant perceived decline in the credit quality. 

Diluted headline earnings per share (DHEPS) (cents) Headline earnings divided by the weighted-average number of ordinary
shares, adjusted for potential dilutive ordinary shares.

Dividend cover (times) Headline earnings per share divided by dividend per share.

Economic profit (EP) (Rm) Headline earnings less the cost of equity (total equity attributable to equity holders of the parent, less
goodwill, multiplied by the group's cost-of-equity percentage).

Effective taxation rate (%) Direct taxation as a percentage of profit before direct taxation, excluding non-trading and
capital items.

Efficiency ratio (%) Total operating expenses as a percentage of total income, being net interest income, non-interest revenue and
share of profits or losses from associates and joint arrangements.

Earnings per share (EPS) (cents) Earnings attributable to ordinary shareholders, divided by the weighted-average number of
ordinary shares in issue.

Gross operating income growth rate less expenses growth rate (jaws ratio) (%) Measure of the extent to which the total income
growth rate exceeds the total operating expenses growth rate.

Headline earnings (Rm) The profit attributable to equity holders of the parent, excluding specific separately identifiable
remeasurements, net of related tax and non-controlling interests.

Headline earnings per share (HEPS) (cents) Headline earnings divided by the weighted-average number of ordinary shares in issue.

Life insurance embedded value (Rm) The embedded value (EV) of the covered business is the discounted value of the projected
future after-tax shareholder earnings arising from covered business in force at the valuation date, plus the adjusted net worth.

Life insurance value of new business (Rm) A measure of the value added to a company as a result of writing new business. Value of
new business (VNB) is calculated as the discounted value, at the valuation date, of projected after-tax shareholder profit from
covered new business that commenced during the reporting period, net of frictional costs and the cost of non-hedgeable risk
associated with writing new business, using economic assumptions at the start of the reporting period.

Net asset value (NAV) (Rm) Total equity attributable to equity holders of the parent.

Net asset value (NAV) per share (cents)  NAV divided by the number of shares in issue, excluding shares held by group entities at
the end of the period.

Net interest income (NII) to average interest-earning banking assets (AIEBA) (%) NII as a percentage of daily average total assets,
excluding trading assets. Also called net interest margin (NIM).

Non-interest revenue (NIR) to total income (%) NIR as a percentage of operating income, excluding the impairments charge on
loans and advances.

Number of shares listed (number)  Number of ordinary shares in issue, as listed on the JSE.

Ordinary dividends declared per share (cents)  Total dividends to ordinary shareholders declared in respect of the current period.
Performing defaulted loans and advances (Rm) Loans that would otherwise not be in default, but are classified as defaulted due to
regulatory requirements, ie directive 7 and the new curing definition.

Portfolio coverage (%) Portfolio impairments in the statement of financial position as a percentage of gross loans and advances,
excluding defaulted advances.

Portfolio impairments (Rm) Impairment for latent losses inherent in groups of loans and advances that have not yet been
specifically impaired. 

The standard portfolio represents all the loans and advances that have not been impaired. These loans and advances have not
yet individually evidenced a loss event, but there are loans and advances in the standard portfolio that may have an impairment
without the bank being aware of it yet.

A period of time will elapse between the occurrence of an impairment event and objective evidence of the impairment
becoming evident. This period is generally known as the emergence period. For each standard portfolio an emergence period is
estimated as well as the probability of the loss trigger and the loss given events occurring. These estimates are applied to the
total exposures of the standard portfolio to calculate the portfolio impairment.

Preprovisioning operating profit (PPOP) (Rm) Headline earnings plus direct taxation plus an impairments charge on loans and
advances.

Profit attributable to equity holders of the parent (Rm) Profit for the period less non-controlling interests pertaining to ordinary
shareholders, preference shareholders and additional tier 1 capital instrument noteholders.

Profit for the period (Rm) Income statement profit attributable to ordinary shareholders of the parent, before non-controlling
interests. 

Return on equity (ROE) (%) Headline earnings as a percentage of daily average ordinary shareholders' equity.

Return on equity (ROE) (excluding goodwill) (%) Headline earnings as a percentage of daily average ordinary shareholders' equity
less goodwill.

Return on tangible equity (%) Headline earnings as a percentage of daily average ordinary shareholders' equity less
intangible assets.

Risk-weighted assets (RWA) (Rm) On-balance-sheet and off-balance-sheet exposures after applying prescribed risk weightings
according to the relative risk of the counterparty.

Specific impairments (Rm) Impairment for loans and advances that have been classified as total defaults and specifically impaired,
net of the present value of estimated recoveries.

Specific coverage (%) Specific impairments in the statement of financial position as a percentage of total defaulted advances.
Tangible net asset value (Rm) Equity attributable to equity holders of the parent, excluding intangible assets.

Tangible net asset value per share (cents) Tangible net asset value (NAV) divided by the number of shares in issue, excluding shares
held by group entities at the end of the period.

Tier 1 capital adequacy ratio (CAR) (%) Tier 1 regulatory capital, including unappropriated profit, as a percentage of
total risk-weighted assets.

Total capital adequacy ratio (CAR) (%) Total regulatory capital, including unappropriated profit, as a percentage of
total risk-weighted assets. 

Value in use (VIU) (Rm) The present value of the future cashflows expected to be derived from an asset or cash-generating unit.

Weighted-average number of shares (number) The weighted-average number of ordinary shares in issue during the period listed on
the JSE.

Abbreviations and acronyms

AFR available financial resources
AIEBA average interest-earning banking assets
AIRB Advanced Internal Ratings-based
AUA assets under administration
AUM assets under management
BBBEE broad-based black economic empowerment
BEE black economic empowerment
bn billion
bps basis point(s)
CAGR compound annual growth rate
CAR capital adequacy ratio 
CET1 common equity tier 1 
CIB Corporate and Investment Banking
CLR credit loss ratio
COE cost of equity
CPI consumer price index
CPF commercial-property finance
CVP client value proposition
DHEPS diluted headline earnings per share
D-SIB domestic systemically important bank
ECL expected credit loss
EP economic profit
EPS earnings per share
EV embedded value
ETI Ecobank Transnational Incorporated
FVOCI Fair value through other comprehensive income
FVTPL Fair value through profit or loss
GDP gross domestic product
GOI gross operating income
group Nedbank Group Limited
HE headline earnings
HEPS headline earnings per share
HQLA high-quality liquid asset(s)
IAS International Accounting Standard(s)
ICAAP Internal Capital Adequacy Assessment Process
IFRS International Financial Reporting Standard(s)
ILAAP Internal Liquidity Adequacy Assessment Process
JIBAR Johannesburg Interbank Agreed Rate
JSE JSE Limited
LAP liquid-asset portfolio
LCR liquidity coverage ratio
LIBOR London Interbank Offered Rate
m million
MFC Motor Finance Corporation (vehicle finance lending division
of Nedbank)
MRC minimum required capital
NCA National Credit Act, 34 of 2005
NCOF net cash outflows
NGN Nigerian naira
NII net interest income
NIM net interest margin
NIR non-interest revenue
NPL non-performing loan(s)
NSFR net stable funding ratio
OM Old Mutual
plc public listed company
PPOP preprovisioning operating profit
qoq quarter on quarter
R rand
RBB Retail and Business Banking
Rbn South African rands expressed in billions
Rm South African rands expressed in millions
RoA Rest of Africa (cluster name)
ROA return on total assets
ROE return on equity
RORWA return on risk-weighted assets
RRB Retail Relationship Banking
RWA risk-weighted assets
SA South Africa
SADC Southern African Development Community
SAICA South African Institute of Chartered Accountants 
SARB South African Reserve Bank
SDGs Sustainability Development Goals
SICR Significant increase in credit risk
TTC through the cycle
UK United Kingdom
US United States
VAF vehicle and asset finance 
VaR value at risk
VIU value in use
VNB value of new business
yoy year on year
ytd year to date
ZAR South African rand (currency code) 
Date: 07/08/2018 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Email this JSE Sens Item to a Friend.

Share This Story