Detailed Report - Nedbank Group Limited

DetailedReport1.OwnershipNedbank’sBEEdealwhichwasconcludedinAugustof2005,waswidelyapplaudedasthebestofbreedandhasbeenleadingthemarketeversince.ItembracesthespiritofBlackEmpowermentbybeingthefirstdealthatintroducedthebroadbasedapproachbyeffectivelyinvolvingadiversegroupofblackstakeholdersconsistingofemployees,clients,communityinterestgroups,nonexecutivedirectorsandstrategicBlackBusinessPartners(BBPs)withoutlengthylockinperiodsandbeingencumberedbymajordebt.IngeneraleachcomponentoftheNedbankdealgrewsinceinceptionataminimumof94%ormoreintheeconomicvalueaddedtoeachoftheparticipants.Thisismarketleadingperformancethatcannotbemirroredbymanydealswithinthefinancialorothersectorsintheeconomy.However,thedownsideisthatalthoughitisclassleadingandtruetothespiritandrequirementsoftheBBBEEActandtheCodesofGoodPractice,aswellasbeinginclusiveandaddingtremendouseconomicvalue,thematuringofsomeofthecomponentsiscostingthegroupastheyaresubjecttotheContinuedConsequence(runningout)clauseoftheCodes.Theownershipscorecardpresentsthissituation.Table1:OwnershipscorecardCategoryVotingrightsEconomicInterestRealisationpointsPossiblepointsDec 2011verified2010verified2009verifiedExercisablevotingrightsinthehandsofblack3 3.00 3.00 2.60peopleExercisablevotingrightsinthehandsofblackwomen2 1.97 0.65 0.95Economicinterestofblackpeople4 4.00 4.00 3.43Economicinterestofblackwomen2 1.80 0.77 0.74Economicinterestofblackdesignatedgroups1 1.00 1.00 1.00Realisationofownership 1 1.00 1.00 0.00Realisationofnetvalue 7 7.00 7.00 6.00Bonuspoints Involvementofblacknewentrants2 2.00 1.69 1.81Involvementofblackparticipants1 1.00 1.00 0.82Total 20+3 22.77 20.11 17.35BBBEElevel 1 1 2NedbankGroupTransformationReport2011–FinalDraft.8

BasedonthenetoftotalsharesonissuelesstreasurysharesaswellasthedilutionfromtheNedbankNamibiadeal,thefollowinganalysisispresented:Heldbyblackpeople Heldbyblackwomen HeldbyblackpeopleShareholdersCurrentInterest%VotingRightsEconomicInterestVotingRightsEconomicInterestBroadBasedEmployeeschemeNewEntrantBlackexecutivescheme 0.44% 0.44% 0.44% 0.00% 0.12% 0.00% 0.44% 0.44%Blackmanagementscheme 1.66% 1.11% 1.65% 0.55% 0.60% 0.00% 1.66% 1.66%Broadbasedemployeescheme 0.24% 0.08% 0.07% 0.00% 0.06% 0.00% 0.08% 0.12%Evergreenscheme 0.27% 0.27% 0.27% 0.13% 0.13% 0.27% 0.27% 0.27%Retailscheme 0.66% 0.45% 0.66% 0.00% 0.25% 0.13% 0.66%Corporatescheme 2.73% 2.56% 2.19% 0.68% 0.25% 0.49% Communityscheme 0.67% 0.67% 0.67% 0.45% 0.45% 0.67% 0.67%Nonexecutivescheme 0.16% 0.11% 0.11% 0.00% 0.09% 0.16%Wipholdconsortium 1.57% 1.57% 0.80% 1.57% 0.80% 1.57%BrimstoneConsortium 1.56% 1.08% 0.95% 0.21% 0.19% 0.26%AKACapital 0.35% 0.24% 0.18% 0.00% 0.00% 0.35%Taquanta 0.00% 0.00% 0.00% 0.02% 0.02% 0.00%TOTAL 10.32% 8.58% 7.99% 3.61% 2.96% 1.55% 2.45% 6.17% Excl.mandatedinvestments 13.27% 11.78% 10.48% 4.62% 3.78% 5.56% 3.20% 7.93%Table1a:OwnershipanalysisTheCodesprovidefortheexclusionofMandatedInvestmentsthat,ingeneral,willincludeshareholdingbyGovernment,StateOwnedEnterprises,etc.,overwhichNedbankhasnocontrolandwhoseownershipisdifficulttodetermine.Table2aputsNedbank’sdirectBlackOwnershipat10.3%,whichislowerthanthereported11.5%ofNedbankSApostissueofnewsharesatthetimeofthedealduetothevestingoftheRetail,Broadbasedemployee,CorporateandNonexecutiveDirectorschemes.ThevestingoftheAKAtrustduring2011alsofurtherdilutedtheblackownership.However,applyingtheexclusionofMandatedInvestments(i.e.excludingtheirshareholdingfromthetotalbase)aspertheCodes,thedirectauditedshareholdingrisesto13.3%.TheCodesalsoprovidefortheflowthroughofdirectownershipfromaholdingcompanyintoasubsidiarycompany.AsOldMutualSA’sBEEdealwasdoneatOMPlclevel,NedbankcanclaimaflowthroughoftheirdirectownershipproportionatetotheirholdinginNedbank,whichwastakenas51.8%asatDecember2011.FlowthroughBEEcomponentattributablefromOldMutualBlackshareholdingas%ofSAbusiness 29.48%InterestheldbyOldMutualinNedbank 51.77%Effectiveblackshareholding 15.26%NedbankclaimedvotingrightsEffectiveblackshareholding 25.58%ExcludingMandatedinvestments 28.53%TheBlackdirectshareholdinginOldMutualatthetimeofmeasurementwasverifiedas29.48%.BasedonOldMutual’sshareholdingof51.8%,Nedbankhastherighttoclaimadirectflowthroughof15.26%.ThisentitlesNedbanktoclaimadirectownershipof25.58%directblackownershipor28.53%excludingMandatedInvestments. NedbankGroupTransformationReport2011–FinalDraft.9

ValuecreatedThefollowingtabledepictstheeconomicvaluethatwascreatedbythevariousschemes/truststhroughmeansofdividendspaidorthesaleofsharesasaresultoftheschemes/truststhathavevested.ShareholdersTotalDividendspaidOptionsexercisedTotalBlackexecutivescheme R49226826 R29986635 R79213461Blackmanagementscheme R159213202 R93796151 R253009352Broadbasedemployeescheme R33157385 R33157385Evergreenscheme R25068735 R25068735Retailscheme R126815614 R126815614Corporatescheme R150383235 R295577480 R445960715Communityscheme R40959226 R40959226Nonexecutivescheme R10599566 R221106 R10820672Wipholdconsortium R100029868 R100029868BrimstoneConsortium R98883624 R98883624AKACapital R42137740 R50849559 R92987299TOTAL R836475022 R470430930 R1306905952Table1b:ValueaddedanalysisRelationshipsbetweenourBBPs,(theBrimstoneandWipholdConsortia)continuetobevalueaddingandbeneficialforbothparties.Variousopportunitieshavebeencreatedincluding:participationofourBBPsinNedbank’sAppliedAcademicProgrammes,insightprovidedtotheNedbankBoardTransformationandSustainabilityCommittee,revenuegeneratedthroughreferralsfromandtotheBBPs.GoodprogresswasalsomadewithreferencetoaccessandfinancialeducationandthesuccessfulimplementationofImbizosinCentaniandDutywa.NedbankGroupTransformationReport2011–FinalDraft.10

2.ManagementControlThemanagementandcontrolelementreflectsthemakeupoftheNedbankBoardaswellasthetransformationthattakesplaceatGroupExecutivelevel.NedbankhasmademajorstridesinbecomingtheleaderintheFinancialMailTopEmpowermentsurveyinthiselement.AtBoardlevelwenowexceedthetargetssetfor2016.SimilarlyatExecutivelevel,althoughweareexceedingthe2016target,thelowscoreinBlackFemaleperformancedirectlyinfluencesouroverallscorethroughtheapplicationoftheAdjustedRecognitionforGender(ARfG)principleoftheCodes(50%gendertargetoftheoveralltarget).Table3depictsourscoreinthiselement.Table2:ManagementandControlscorecardCategoryPossiblepointsDec 2011verified2010verified2009verifiedExercisablevotingrightsin3 3.00 2.82 2.67Board thehandsofblackpeopleparticipation BlackExecutiveDirectors2 1.67 1.67 1.50usingtheARfG5 3.52 3.13 4.16Bonuspoints BlackIndependentNon1 1.00 1.00 1.00ExecutiveBoardMembersTotal 10+1 9.19 8.62 9.33TopBlackTopManagementusingManagement theARfGBBBEElevel 2 2 2BoardofDirectorsName TypeofDirectorship Race Gender Citizenship Dateappointed AgeBoardman,TA NonExecutive Male White SA 01Mar10 61Brown,MWT Executive Male White SA 17Jun04 44Chikane,TCP IndependentNonExecutive Female African SA 01Nov06 45Dempster,GW Executive Male White SA 05Aug09 55deLFigaji,B IndependentNonExecutive Male Coloured SA 25Nov02 66EnusBrey,MA IndependentNonExecutive Male Indian SA 16Aug05 56Hope,DI# IndependentNonExecutive Male White NonSA 01Dec09 54Khoza,RJ Executive Male African SA 16Aug05 61KnotCraig,AC IndependentNonExecutive Male White SA 01Jan09 58LucasBull,WE NonExecutive Female White SA 01Aug09 57Makwana,PM IndependentNonExecutive Male African SA 17Nov11 41Mnxasana,NP NonExecutive Female African SA 01Oct08 54Morathi,RK Executive Female African SA 01Sep09 41Netshitenzhe,JK IndependentNonExecutive Male African SA 05Aug10 54Roberts,JVF* NonExecutive Male White NonSA 01Dec09 53Serobe,GT NonExecutive Female African SA 16Aug05 51Wyman,MI* NonExecutive Male White NonSA 01Aug09 64*British–AppointedbyOldMutualPlc,#NewZealand–AppointedbyOldMutualPlcNedbankGroupTransformationReport2011–FinalDraft.11

Notes:IntermsofNedbankGrouppolicy,andinaccordanceofgoodgovernance,nonexecutivedirectorsandindependentnonexecutivedirectorsofwhohaveservedontheboardforlongerthannineyearsarerequiredtoretire.ExecutiveManagementName Portfolio Race Gender VoteAdams,T BalanceSheetManagement White Male 1Bestbier,J StrategicPlanning&Economics White Male 1Brown,MWT* ChiefExecutiveOfficer White Male 1Dempster,G* ChiefOperatingOfficer White Male 1Jali,T ChiefGovernance&ComplianceOfficer African Male 1Johnson,I NedbankRetail&BusinessBanking White Female 1Kennedy,B NedbankCapital White Male 1Macready,D NedbankWealth White Male 1Morathi,R* ChiefFinancialOfficer African Female 1Nkuhlu,M NedbankCorporate African Male 1Shabalala,S NedbankBusinessBanking African Male 1Sibeko,T Marketing,Communications&CorporateAffairs African Male 1Swanepoel,F ChiefInformationOfficer White Male 1Thomas,C ConsumerBanking African Male 1Wessels,P ChiefRiskOfficer White Male 1Thebyane,A HumanResources African Male 1*ExecutivememberoftheboardChallengesTopManagementreflectsNedbank’swillandabilitytotransform.ItisthereforeimportantthatcertainrulesagreedunderEmploymentEquityshouldalsobeappliedhereirrespectiveoflegislation.Casesinpointinclude:the“noregression”rule;workingtowardsachievingEconomicActiveRepresentation(EAP);andrecognitionforgenderandpeoplewithdisabilities.ThissetsthevisibleexamplefortherestofthegroupandhelpNedbanktoachieveitsobjectiveofleadingfortransformation.NedbankGroupTransformationReport2011–FinalDraft.12

3.EmploymentEquityRemunerationpractises–aspertherequirementsoftheEEActDuring2009,theDeptofLabour(DOL)conductedaninformalreviewofNedbank’sEmploymentEquityReportonincomedifferentials.Followingthereview,thebankembarkedonanexercise,followingannualsalaryincreases,toensurethattherearenodiscriminatorypaydisparitiesinthevariousoccupationallevelsandjobfamilies,aswellasrace and gender disparities. During midJuly 2011, the DoL also requested information from Nedbank that woulddemonstratethatthebankwasalignedtotheprincipleof“equalpayforworkofequalvalue”.Theinformationhasbeen shared with the Department and the bank will receive feedback on the findings of the department in midFebruary.Thissameanalysishasbeensharedwiththebank’stopmanagementtoensurethatwhereinstancesofdisparities exist, with no clear justification, these are rectified. Nedbank is committed to building Africa’s mostadmired bank, by our staff, clients, shareholders, regulators and communities, and therefore complied with allrequests from the DoL to minimise any risk of noncompliance. In addition, the bank’s total remuneration andreward philosophy is aimed at attracting and retaining motivated, high calibre people as well as contributing tomakingNedbankagreatplacetowork.EmployeedevelopmentOneofthepillarsofourtransformationeffortsisthedevelopmentofEmploymentEquityforummemberstoensurethattheyareproperlycapacitatedtofulfiltheirrolesasemployeerepresentativesonEEmatters.Capacitybuildingworkshopsareconductedonaquarterlybasisforthispurposeandadhocsessionsarealsoconductedonrequestfromvariousareasnationally.During2011,15suchsessionswereheldand269peopleweretrained.SessionswerealsoheldwithlineHRmanagerstocreateawarenessandsensitisethemtomattersaffectingpeoplewithdisabilities.Foursessionswereheld,attendedby55HRmanagers.ThesessionsarepartofthebiggerPWDstrategytoensurethatouremployeeswithdisabilitiesarereasonablyaccommodatedandthatNedbankisagreatplacetoworkforthemaswell.Disabilitytrainingworkshopswerealsoprovidedbytheemployeewellbeingserviceprovider,ICAS.Thetrainingwasaimedatcreatingawarenessandprovidingemployeeswiththenecessaryknowledgeandtoolstoengageconstructivelywhendealingwithdisabilitycases.Throughthistraining,employeesalsogainedindepthknowledgeontheavailablelegalinstrumentsthatguidedisabilityprogrammesintheworkplace.TheNedbankEmployeeWellbeingProgrammealsooffersemployeestheopportunityto‘AskaDisabilityExpert’aboutspecificPWDissues,andpresentcasebycasereferralsfortheverificationofdisabilitiesandtherelevantinformationonreasonableaccommodation.Duringtheyear,Nedbankalsoconducted20sexualharassmentawarenesssessionsaimedatallstaff.ThepurposeofthesesessionswastomakestaffawareoftheexistingNedbanksexualharassmentpolicyandescalationprocedure.Thesessionswereconductedinpartnershipwithouremployeewellbeingserviceprovider(ICAS),whoisalsoequippedtodealwiththepsychologicalimpactofsexualharassmentonaffectedemployees.TransformationdialoguesDuringthecourseoftheyear,Nedbankconductedvarioustransformationdialoguesessions.Aseriesoftalksbyinvitedguestspeakersandpanelsaddressedcurrenttransformationtopics.Theseincludedsessionsby:NedbankGroupTransformationReport2011–FinalDraft.13

StatsSA,inresponsetoaprevioustalkbyanAdcorpLabourAnalyst,onthestateofunemploymentinSouthAfrica,andANationalPlanningCommissionpresentationbyoneoftheircommissioners,onthefirstdiagnosticreportreleasedbythecommissionearlierintheyear.OthertransformationdialoguestooktheformofoneononesessionswithpreselectedBoardmembers,allGroupEXCOmembersaswellasfocusgroupscomprisinga representativesampleofseniormanagers.The dialoguesallowedparticipantstogainanunderstandingofthelatestopinionsofdecisionmakersaboutthestateoftransformationatNedbank,andwillinformtheformulationofpositionstatementsontransformationforthenextthreeyears.ThedialogueswerealsonecessarytoprovideinputintothesecondthreeyearEEPlanfortheperiod20112013tosetanupdatedtransformationtone.Furthermore,followingtheappointmentofanewCEin2010,itwasnecessarytorevisitthetransformationjourneywiththenewGroupExcoteam,thusensuringrelevanceandalignmenttothelatestgroupstrategy,aswellasrenewedcommitmentfromthecurrentleadership.DiversityInitiatives–PeoplewithDisabilities(PWD)andWomenPeoplewithDisabilitiesIn2011Nedbank’scommitmenttobeingagreatplacetoworkforemployeeswithdisabilitieswasreinforcedfurther.InterventionsandplansinsupportofthiscommitmentincludedtheNedbankPWDCommunicationsplan,whichwaslaunchedinthefirstquarterof2011andiscloselyalignedtothenationalandinternationalcalendarofeventsforpeoplewithdisabilities(PWD’s).IntherunuptotheInternationalDayforPersonswithDisabilities2011,Nedbankincreaseditseffortsincreatingawarenessofdisabilitiesaswellasprovidingsupporttomanagers.Inordertobringthecommunicationsaliveforemployees,someemployeeswhohaddeclaredtheirdisabilitystatuswasusedasthefaceofthecampaigntoenhanceitscredibility.Thesloganfortheinitiativewas‘Mydisabilityhaslittletodowithmyability’.Thecampaignwasaimedatraisingawarenessamongallemployeesastothedifferenttypesofdisabilitiesandthechallengesfacingthosewithsuchdisabilities.ItalsoencouragedemployeestodeclaretheirdisabilitystatusinordertoensurethatNedbankGroupisbestabletoaccommodateitsemployeeswhohavedisabilities.WeencouragestafftodeclarebecauseweneedtoensurethatNedbankiswellequippedtoprovidereasonableaccommodationasbeingarequirementoftheEEActaswell(tocreateaninclusiveculturewhichcatersforallstaff).ThepercentageofdeclaredNedbankemployeeswithdisabilitieshasincreasedfrom0.21%(in2006)to2.76%attheendof2011,andmuchofthisincreasebetween2010and2011canbedirectlyattributedtothe2011awarenesscampaign.NedbankGroupTransformationReport2011–FinalDraft.14

NedbankGrWoThrestfemoppespparrelaincWebusofoPWDCaseMyDisabilitIntherunuawarenessoNedbankeminitiativewa0.21%2006TotalPWroupTransformomeninitiativeroughourstraablishedarelmalestaff,parportunities.Thpeciallyinareartnershiphasationship,AdcludingthepreehavealsoestsinesspartnerourcommitmstudytyhaslittletoptotheInterofdisabilitiesmployeeswhoas“Mydisabil%1.08%6 200WDRepresentamationRepores:ategicrelationationshipwithrticularlythoseheinvolvemeaswhereweaallowedustocorphasbeeneselectionprotablishedarer),andsponsoenttoprovidiodowithmynationalDayfaswellasproohaddeclaredityhaslittleto%1.587 200ation200620rt2011–FinalnshipwithWiphtheAfricanWeworkinginantwithAWCAarechallengedforgearelatinusedasthesocessesforthlationship,thoredanetworingsupporttoabilityforPersonswovidingsuppordtheirdisabiliodomyability8%1.7308 200011Draft.phold(oneofWomenChartareasofscarcAalsoassisteddtomeetourionshipwithAsupplierforahebursaryandroughtheBrirkingleadershowomeninarwithDisabilitierttomanageritystatuswasty”.3%2.209 20Nedbank’sblteredAccouneandcriticaldinpositioninremploymentAdcorp,aplacnumberoftadgraduateprmstoneConsohipeventwithreasofscarcesfor2011,Ners.Inordertousedasthef24%2.7010 20ackbusinesstants(AWCA)skills,withinfgNedbankastequitytargetementagencylentmanagemogrammes.ortium(NedbatheSAwomeandcriticalskedbankincreaobringthecomaceofthecam76%011partners),Ne),inordertopformalnetwosemployerofts.Inadditiony.Throughthmentacquisitiank’sotherbeninEngineerkills.aseditseffortsmmunicationsmpaign.Thes1dbankprovideourrkingchoicen,theisionprojects,lackring,aspartsincreatingsalivesloganofthe5

Thecampaignincludedthefollowinginitiatives,amongstothers:“LeaderConversationGuide”,aguidewhichtargetedatmanagerswithdirectreportscoveringthefollowingareas: tips on holding a 10minute meeting with employees, defining disability, a list of disabilities, andmore.InternalTVadvertisementwhichwasbroadcastedontheinternalTVchannel(N2N),promotionalbuttonsandarticlesoninternalcommunicationschannelsApromotionalaudiovisualthatwasairedoneveryemployee’scomputerscreenThePWDintranetsitewasupdatedtoensureitwasasuitableavenueofsupportandsourceofinformationforallemployeesandmanagers.By using Nedbank employees in the campaign, the message became more credible and helped to deal withsomeofthefearsthatemployeesmayhaveaboutdeclaringtheirdisabilities.NedbankcontinuestoencourageallemployeestodeclaretheirdisabilitystatussoastoensurethatNedbankisadequatelyequippedtoprovidereasonableaccommodationaspartofcreatinganinclusiveculturewhichcatersforallemployeesandtofulfilarequirementoftheEEAct.The declaration drive which is now in its third year since inception has shown a remarkable increase inemployees who have declared their disability status.The Nedbank percentage of Nedbank employees, whohavedeclaredtheirstatus,hasincreasedfrom0.21%(in2006)to2.36%attheendof2011.Nedbankbelievesthatitsexplicitcommitmenttopeoplewithdisabilitiesaswellasthemostrecentcampaign,hasprovidedtheimpetusintheincreaseindeclarations.Thebankisalsoconsideringhowfutureempowermentallocationswillbestructuredwiththeintentiontoretainblack people with disabilities. In addition, the bank is actively monitoring income differentials annually, toensure that there is no unfair discrimination in the way people are remunerated. Table 4 contains theEmploymentEquityscorecard.Table3:EmploymentEquityscorecardCategoryPossible 2011 2010 2009points verified verified verifiedBlackPeoplewithDisabilitiesusingtheARfG 2 1.52 1.15 0.89BlackSeniorManagementusingtheARfG 5 3.01 3.04 2.88BlackMiddleManagementusingtheARfG 4 3.41 3.23 3.00BlackMiddleManagementusingtheARfG 4 4.00 4.00 4.00Bonuspoints–meetingorexceedingEAP 3 0.00 0.00 0.00Total 15+3 11.94 11.42 10.77BBBEElevel 3 3 4ARfG:AdjustedRecognitionforGenderhasbeenincludedbythedtiCodestoensureproperrepresentationofblackwomeninpositionsofinfluence.Thisfactorensuresthatblackwomenmakeupatleast50%oftheoveralltargetssetforblackpeople.ThefollowinggraphsillustratethemovementinNedbankSAemploymentequityatthevariouslevelssince2007.NedbankGroupTransformationReport2011–FinalDraft.16

Thefollowinggraphsillustratetheprogress,byraceandgender,inemploymentequity atthevariouslevelssince2007(basedondticlassification):NedbankGroupTransformationReport2011–FinalDraft.17

NedbankGrEmploymenOccuTopManagemSeniorManagProfessionallySkilledtechniSemiskilledUnskilledExceptionspematchedTOTALPERMATemporaryemGRANDTOTAPeoplewithOccuTopManagemSeniorManagProfessionallySkilledtechniSemiskilledUnskilledExceptionspematchedTOTALPERMATemporaryemGRANDTOTAroupTransformtEquityaspeupationalLevelsmentgementyqualifiedcalermanentstaffnoANENTmployeesALdisabilitiesasupationalLevelsmentgementyqualifiedcalermanentstaffnoANENTmployeesALmationReporertheEEActaA68120364ot35739396sat31DecemA42ot78rt2011–Finalat31DecembeMaleC606521193713179549198001071 1385 19810869 1493 1mber2011MaleC003189421425500007829218030Draft.er2011IW09633856331645713656113740011152327708732316103093IW00214178123345120000471411648147AC141 1843 5137461841434 53026067291692 166759307AC001377 326 100116 53119 5FemaleI0011311969243136636272001010236164117742478FemaleI0000614372512900005548125650FoNatWMale1011229174490190031404300204163153255284418181FoNatWMale0061721931410000021233121541oreigntionalsTOFemale01088 7991315 3012132529 224227oreigntionalsTOFemale01320006068OTAL1776844418069809116201317OTAL0282243481350073520755

4.SkillsDevelopmentAlthoughmajorstrideshasbeenmadeduringtheperiodunderreview,NedbankisstillintheprocessofaligningandintegratingtheskillsdevelopmenteffortwiththerequirementsoftheTalentManagementplan,scareskillsanalysisperfunctionalarea,aswellasthesuccessionplanoftheorganisationaspartofourongoingjourney.Thisensurethatmoreinternaltalentbecomesupwardlymobilewithintheorganisationratherthanhavingtoseekopportunitieselsewhere.ItremainsourcommitmenttoensurethatNedbankcomplieswithalllegislationwhiledrivinghighqualityeducationandtraininginandfor,theworkplace.Thisisachievedthrough:Addressingtheskillsscarcityincriticalareas;BuildingtheEEpipelinethroughvariousinterventions,suchas; BusinessEducationProgrammes(BEP); ExecutiveDevelopmentProgrammes Learnerships; Coaching;and Internal/externalbursaries;TrainingandDevelopmentwithemphasisonblackpeople,toimprovetheoptionsavailabletothegroup(overandaboverecruitment)inattainingamorediverseworkforceforimprovedcompetitiveness;andEmpowermentofblackpeople,blackwomen,andpeoplewithdisabilitiestocompeteonanequalfooting.SkillsdevelopmentspendanalysisAnnualskillsdevelopmentspend 2007 2008 2009 2010 2011Totalbasicpayroll R5272015217 R5945444331 R5983112789 R6822729009 R7554797075Totalskillslevypaid¹ R52720152 R59454443 R59831128 R68227290 R75547971Totaltrainingspend R174481431 R263840903 R258382558 R244219000 R301283283Totaltrainingspendasa%ofbasicpayroll 3.31% 4.44% 4.32% 3.58% 3.99%TotalTrainingspendonBlackstaff R106550522 R170775317 R175702843 R174394049 R230148231Spendonblackstaffasa%ofbasicpayroll 2.02% 2.87% 2.94% 2.56% 3.05%TotalTrainingspendonBlackstaffusingARfGR106550522 R174569323 R177598114 R189537960 R228396072BlackMaledevelopmentandtraining n/a R74457739 R73712473 R69968958 R94773641BlackFemaledevelopmentandtraining n/a R96317578 R101990371 R104425091 R135374590BlackPWDdevelopmentandTrainingusingARfGTable4:HistoricalSkillspendanalysisn/a R1400291 R2192227 R2857870 R4014903Note:¹accordingtoacceptedaccountingpolicy,NedbankdoesnotoffsetgovernmentgrantsorlevyrepaymentsreceivedagainstitstrainingbudgetbutratheragainsttheLevies/Taxpaymentlines.Thetotal"Skillslevypaid"isthereforenotsubtractedfromthetotaltrainingspendonblackstaff.NedbankGroupTransformationReport2011–FinalDraft.19

NedbankGrTable4a:SkCategorySkillsExpendSkillsExpenddisabilitiesuNumberofbLearnershipusingARfG²TotalBBBEEleveNote: ¹Measu²EmployThefollowinroupTransformkillsDevelopmditureonblacditureonblacusingARfG.blackemployesorCategory²luredasa%ofleviyeesparticipatingnggraphsillusmationRepormentscorecarckemployeesckemployeeseesparticipatB,CandDPrableamount.ginlearnershipsstratetheachrt2011–FinalrdusingARfG¹withinginrogrammesorCategoryB,CievementsasDraft.Possiblepoints63615andDprogrammmeasuredun2011verified6.000.535.3011.833mesmeasuredasnderthedtico1d2ver03033a%oftotalemplodesinskillsd2010rified5.560.423.629.605loyees.development:22009verified5.930.374.0810.3840

PeopleDevelopmentOurphilosophyInNedbankwedeveloppeopleto: Getindividualstofullperformanceintheircurrentjobs. Prepareindividualsforlarger/morecomplex/broaderjobsinfuture. Supportindividualstoreachtheirfullpotential(continuouspersonaldevelopment).Thisisfacilitatedthroughvarioustrainingprogrammesusingdifferentcombinationsoflearningmethodstoensureeffectivenessoftraining.Besidetheshortcourseswhichsawemployeesspendingonaveragefivedaysonaverageperpersonin2011(2in2010),wealsosupportourstafftoobtaintransferablequalificationsthroughdifferentprogrammesandinitiativesasstatedbelow.1. BusinessandExecutiveEducationProgrammesNedbankinpartnershipwithaleadingbusinessschoolinSouthAfrica,TheGordonInstituteofBusinessScience(GIBS)offersSouthAfricanQualificationsAuthority(SAQA)accreditedBusinessEducationProgrammes(BEP).Thepurposeoftheprogrammesistodevelopknowledge,skillsandvalues(KSV’s)tointegratedifferentmanagementdisciplinesatthemanageriallevelandtohaveaholisticviewoncorecompetenciesrequiredatnewmanagerlevelandbuildingbenchmarkcompetenciestoprogressthroughvariousmanagementlevelswithinthebankingsector.TheprogrammeshavebeendesignedtoaligntoNedbank’sstrategicfocusareasandmanagementaccountabilitiesacrosstheCareerChoicesModel.TherearethreeBusinessEducationProgrammesbeingtheJuniorManagementProgramme,theMiddleManagementProgrammeandtheSeniorManagementProgramme.Atahigherlevel,thereareExecutiveEducationProgrammesofferedbyvariousinstitutions,bothlocallyandinternationally.Theobjectivesoftheseprogrammesaretoprovideseniormanagersandexecutiveswithadeepglobalperspectiveenablingtheparticipantstobecomegloballeaderswhoareabletoleadinacomplexworldandtoleadcollaboratively,understandinghowtodisseminateandexecutestrategyandunderstandingthedriversandopportunitiesforinnovationandgaininsightstotheleadingthinkingthatishappeningnow,thatwillshapethefutureofbusiness;andupdatetheirknowledgeandskillonthefunctionalaspectsofmanagementwithanopportunitytoengagewithotherleadersfromdifferentcompanies.In2011atotalof429(1sponsoredbyNedbankfromBMFmakingit430intotal)employeesparticipatedinBusinessEducationProgrammeswith70%beingBlackemployees(35%ofwhichbeingBlackfemaleemployees),while58employeesparticipatedinExecutiveEducationProgrammeswith48%beingblackand19%Blackfemaleemployees.African Coloured Indian Total black WhiteProgrammeMale Female Male Female Male Female Male Female Male FemaleTotalSMP 35 40 20 21 21 22 76 83 20 26 205MMP 20 19 10 13 15 17 45 49 23 20 137JMP 10 9 7 2 12 8 29 19 28 11 87Total65 68 37 36 48 47 150 151 71 57 42915.2% 15.9% 8.6% 8.4% 11.2% 11.0% 35.0% 35.2% 16.6% 13.3% 100.0%PWDs 0 0 0 0 1 0 1 0 1 0 2Table4b:2011BusinessEducationProgrammeanalysisNedbankGroupTransformationReport2011–FinalDraft.21

2. LearningProgrammesa) NedbankGraduateProgrammeAtNedbankwebelievethatgreatthingsbeginwithgreatPeopleand,westrivetoattractandretainSouthAfrica'stopgraduatestobuildthefutureleadershipandspecialistpipelinesofourorganisationthatallowustoremaincompetitive.ItiswiththisinmindthatNedbankembarkedonajourneyofestablishingagraduateflagshipprogramme.Forthefirsttimeever,Nedbankofferedgraduatestheopportunitytochoosetheircareerfromtheverystart.So,whetheranindividualisinterestedinbeginningacareerjourneyinspecialistfieldssuchasaccounting,risk,informationtechnology,investmentbankingorquantitativeanalysisorwouldratherfirstexploreotherareasinbankingtobecomeawellroundedmanager,thegraduateflagshipprogrammemeetstheirneeds.Thejourneykickedoffwithasuperinductionthatprovidedgraduateswithanindepthinsightintotheworldofbankingandhowlargeorganisationsarestructuredtoworktogetherasaunit.Opportunitiesarethengiventoembarkonalearningjourneyinaspecialisedfield,ortoparticipateinarotationalprogrammethatallowedforexposurewithinvariousareasofthebankduringthefirstyear.Thisenabledforvaluableexperienceshouldapersonwishtomoveintoamanagerialpositioninfuture.Nedbankhasaproudcultureofcontinuouslearninganddevelopment.Theblendedlearningapproachesofferedwilldemandtheapplicationofpracticallearningindaytodayworkactivities.Learningisfocusedondevelopingpersonalmastery,technicalcompetenceandbusinesscompetenceaswellassocialresponsibility.NedbankisacaringbankthataspirestobecomeaGreatPlacetoWorkforallitsemployees.ThroughourCoachingForGrowthprogramme,graduateshaveaccesstoprofessionalcoacheswhoaretheretoassistinenhancingtheiroverallcapacity.Inaddition,developmentassessmentsanddebriefingsessionshavebeendesignedtoallowthemtheopportunitytoreflectontheirlearningandperformanceintheworkplacetoallowthemtoremainmotivatedandtosustainthemontheprogramme.ThepurposeoftheNedbankGraduateDevelopmentProgrammeistoprovideeachparticipantwithfasttracked, experiential and applied learning opportunities to be fit for employment. A holistic learningmodelwasadoptedandgraduatesareexposedtovariousmodulesthatareprovidedeitherinhouseorbyexternal training providers. In 2011 a total of 119 (109 count towards BEE) (201080) unemployedgraduatesparticipatingintheNedbankGraduateProgrammesNedbankGroupTransformationReport2011–FinalDraft.22

) LearnershipsNedbank embraces lifelong learning and development of our staff. In this regard we offer a variety oflearnerships which focuses on scarce skills as identified in the sector skills plan also addressing thebusinessneeds.WealsoensurethatwedeliveronthetransformationstrategyofthecountrybygrantingemploymentopportunitiestotheunemployedyouththroughparticipatinginthesectorinitiativessuchastheLetsemaandKuyasaLearnerships.Wehad699learnersparticipatingindifferentlearnershipsin2011,109ofthemwereunemployedlearnerswith89%ofthelearnerswhoparticipatedinalllearnershipsbeingblacklearners.ProgrammeAfrican Coloured Indian Totalblack WhiteMale Female Male Female Male Female Male Female Male FemaleTotalBankingServiceAdviceCertificate62 109 9 25 14 18 85 152 3 10 250BankingServicesAdvice(FAIS) 9 13 3 9 1 3 13 25 3 4 45CATrainingProgramme(TOPP)4 7 1 0 0 1 5 8 10 5 28ContactCentre 11 13 4 5 2 4 17 22 1 1 41ForexLearnership 4 5 1 5 2 3 7 13 0 2 22ITBLP 3 2 0 1 1 0 4 3 0 0 7Kuyasa 11 10 0 0 0 0 11 10 0 0 21Letsema 27 47 1 6 0 6 28 59 1 0 88NationalCertificateinBanking 23 27 0 1 3 0 26 28 0 0 54NationalCertificateinBanking(CoreBankingCompliance)NationalCertificateinBanking(CoreBankingEyethuTrustNedbankGraduateProgramme*1 8 1 4 0 6 2 18 0 4 240 3 1 7 0 1 1 11 0 0 1241 43 4 2 5 4 50 49 7 3 109NISSProgramme 1 1 1 0 1 5 3 6 4 11 24PropertyFinanceAcademy 6 8 2 5 2 2 10 15 9 10 44RhodesUniversityInternshipProgrammeSoftwareDevelopmentInternshipProgramme1 3 0 0 0 0 1 3 0 1 51 7 2 0 0 0 3 7 0 0 10SystemSupport 9 11 3 1 0 0 12 12 0 0 24Total214 317 33 71 31 53 278 441 38 51 80826.5% 39.2% 4.1% 8.8% 3.8% 6.6% 34.4% 54.6% 4.7% 6.3% PWDs 5 7 1 1 1 0 7 8 1 0 16Table4c:2011LearnershipsprogrammesanalysisNote:*Atotalof119Graduatesparticipatedwith109contributingtowardsBBBEEreporting.NedbankGroupTransformationReport2011–FinalDraft.23

3. EducationAssistancea) Internalbursariesenablebusinessclusterstooptimallyplananddistributebursaryallocationstopermanentemployeestoaddressidentifiedpriorityskillsrequirements.OccupationallevelsSeniormanagementMiddlemanagementJuniormanagementAfrican Coloured Indian Totalblack WhiteMale Female Male Female Male Female Male Female Male Female1 2 0 0 2 1 3 3 2 3 1143 75 16 48 34 48 93 171 50 57 37195 137 36 82 35 75 166 294 48 60 568Semiskilled 12 24 4 14 5 9 21 47 4 6 78Nonpermanent 0 0 0 0 1 0 1 0 0 0 1Total151 238 56 144 77 133 284 515 104 126 102914.7% 23.1% 5.4% 14.0% 7.5% 12.9% 27.6% 50.0% 10.1% 12.2% PWDs 3 2 2 1 2 3 7 6 3 6 22Cost(Rm) R2198817 R2471027 R644021 R1069953 R1234369 R1272443 R4077207 R4813423 R1552386 R1160219 R11603235Table4d:2011Educationassistanceanalysesb) ExternalbursariesarefundedbyNedbankandadministeredbytheNationalStudentFinancialAidScheme[NSFAS]throughapublicprivatepartnership.ExternalbursariesformpartofNedbank’stalentpipelinetoattractanddevelopgraduatesaspartofNedbank’sthreeyearskillsplan.UniversityCentralUniversityofTechnologyDurbanUniversityofTechnologyAfrican Coloured Indian Totalblack WhiteMale Female Male Female Male Female Male Female Male Female1 0 0 0 0 0 1 0 0 0 10 1 0 0 0 1 0 2 0 0 2FORTHARE 1 1 0 0 0 0 1 1 0 0 2NMMU 1 2 0 0 0 0 1 2 3 2 8NorthWestUniversityNorthWestUniversity(Mafikeng)0 4 0 2 0 0 0 6 1 1 81 0 0 0 0 0 1 0 0 0 1NWU(Vaal) 0 0 0 0 0 0 0 0 1 0 1RhodesUniversity 2 4 0 0 0 1 2 5 1 0 8Stellenbosch 0 0 1 0 0 0 1 0 1 2 4TUT 1 0 0 0 0 0 1 0 0 0 1UNISA 2 3 0 0 0 0 2 3 1 2 8UniversityofCapeTownUniversityofFreeStateUniversityofJohannesburgUniversityofKwaZuluNatalUniversityofLimpopo9 2 0 1 2 2 11 5 5 1 224 6 1 0 1 0 6 6 8 26 469 25 0 1 1 1 10 27 1 1 395 3 0 0 5 12 10 15 0 0 257 8 0 0 0 0 7 8 0 0 15TotalTotalNedbankGroupTransformationReport2011–FinalDraft.24

UniversityofPretoria8 8 0 0 0 0 8 8 7 3 26UniversityofVenda 12 14 0 0 0 0 12 14 0 0 26UniversityofWesternCapeUniversityofZululandWalterSisuluUniversity0 1 1 0 0 0 1 1 0 0 25 4 0 0 0 0 5 4 0 0 95 5 0 0 0 0 5 5 0 0 10WITS 5 12 1 0 5 4 11 16 2 2 31Total78 103 4 4 14 21 96 128 31 40 29526.4% 34.9% 1.4% 1.4% 4.7% 7.1% 32.5% 43.4% 10.5% 13.6% Totalcost R3326455 R4302076 R166058 R182285 R583456 R814888 R4075969 R5299249 R1327456 R1559114 R12261787Table4e:ExternalBursaryanalysesc) StudyGrantsareofferedtoprovidefinancialassistancetopermanentstafftofundthefulltimestudyoftheirchildren/dependentsatuniversitylevel.OccupationallevelsTopmanagementSeniormanagementMiddlemanagementJuniormanagementAfrican Coloured Indian Totalblack WhiteMale Female Male Female Male Female Male Female Male Female0 0 0 0 0 0 0 0 1 0 10 1 0 0 0 1 0 2 12 0 144 9 8 10 16 26 28 45 48 49 1703 36 5 19 13 21 21 76 8 49 154Semiskilled 1 6 1 2 1 5 3 13 0 7 23Unmatched 1 0 0 0 0 0 1 0 0 0 1Pensioners 2 0 0 0 1 1 3 1 5 1 10TotalTotal11 52 14 31 31 54 56 137 74 106 3732.9% 13.9% 3.8% 8.3% 8.3% 14.5% 15.0% 36.7% 19.8% 28.4% PWDs 1 1 0 1 1 3 2 5 1 3 11Cost R94955 R588105 R148350 R364740 R396570 R517736 R639875R1470581R873015R1113564R4097036Table4f:2011StudygrantsassistanceanalysesEAFNoofstaffd) EducationAssistanceFundGrantsareofferedtoprovidefinancialassistancetopermanentstaffwhosechildren/dependantsstudyatprimaryandsecondaryschoollevel.EducationAssistanceFundGrantsareonlyawardedtoeligiblestaffwhosetotaltaxableannualearningsfallwithinR100000asprescribedbySARS.African Coloured Indian Totalblack WhiteMale Female Male Female Male Female Male Female Male Female40 267 9 98 10 38 59 403 1 38 5018.0% 53.3% 1.8% 19.6% 2.0% 7.6% 11.8% 80.4% 0.2% 7.6% Cost R40322 R275550 R9560 R105265 R12700 R43370 R62582 R424185 R1000 R56000 R543767Table4g:2011EducationassistanceanalysesTotalNedbankGroupTransformationReport2011–FinalDraft.25

AcademiesandCoachingforGrowtha) Academieso Adecisionwastakenin2011toestablishjobfamilyrelatedlearningacademiesthatwilladdressthefunctional requirements of prioritised jobs. The job family approach allows staff to be developedwithintheircurrentorfutureaspiredrolesopeningupnewcareeropportunities.TheAcademiesareunderpinnedbyclearlydefinedjobprofilerequirements,athoroughpreandpostassessmentprocess,andinterventionsthatcoverbothformalandinformallearning.TwosuchAcademieswerelaunchedin2011 namely the Human Resource and Risk Academies. More Academies are in the pipeline to belaunchedin2012andbeyond.o BelowissomefeedbackfromstaffthatparticipatedintheHRAcademy:- “IwillgivetheHRAcademyanA.Iamfascinatedbythejourney”–OldjohnMothupi,HRManagerPersonalLoans- “AftergoingthroughPhase1oftheHRAcademy,InowrealisethatIamtheCEOofmyownlife”–AnvithaSahadeo,HRManagerSBS- “GreattimeandefforthasgoneintobuildingtheHRAcademy.ThankyouforstartingtheAcademyjourneywithus”–WilnaJensen,HRManagerCorporateSharedService.b) CoachingforGrowthMajor progress was made during 2011 to ensure the successful introduction of coaching as animportantcapabilitytoenhancetheapplicationoflearningbackintheworkplace;toassistwithcareertransition; and to entrench desired leadership behaviours. More than 500 line managers were upskilledtoimprovetheapplicationoflearningoftheirstaff,and22internalcoacheswereaccreditedtoassistmanagerswithcareertransitionsandleadershipbehaviourdevelopments.SuccessesandChallengesa) Successeso 109graduatesparticipatedintheNedbankGraduateDevelopmentProgrammein2011with99beingrepresentedbyblackpeople.o RolloutofCoachingCapabilityacrossthegroup,whichsaw22linemanagers(9black)participatinginanInternationalCoachingFederation(ICF)accreditedcoachingprogramme,andmorethan500linemanagersupskilledtoimproveonthejobcoachingofwhich409wereblackemployees.o Morethan450linemanagersparticipatedinBusinessandExecutiveEducationProgrammes(BEPandEDP),morethan60%ofwhomwereblackemployees.o Nedbank’sFAISexaminationpassratesconsideredthehighestintheindustryo 75HRManagersparticipatedintheHRAcademytoimprovefrontlineHRcapabilities.o 25 employees obtained Property Finance qualifications through the Nedbank Property FinanceAcademy, and more than 50 employees graduated from the Business Banking Talent Academy –therebybuildingthegroup’screditandsalespipelineo 699delegatesparticipatedinvariousLearnerships.o 81%ofparticipantsinallBCDprogrammeswereblackpeopleb) Challengeso Rapidchangingbusinessenvironment;o Slowerthanexpectedgrowthinalllevelsofemploymentequity(black).NedbankGroupTransformationReport2011–FinalDraft.26

5.PreferentialProcurement1. IntroductionTheNedbankgroup(thegroup)hasadoptedtransformationintoitscultureandtransformationisnowanormalpartofitsoperations.Thisisparticularlytrueinitsprocurementpolicies,wheretransformationisemphasizedandresultsaremonitoredverycloselythroughrigorousreportingandmanagementinformationbystructuresthatspanacrossthegroup.Thegroupstrivestoachievebroadbasedempowermentinitstruespiritandintention.Thegroup’sprocurementpolicyexiststoensurethatsoundprocurementpracticesareemployedtoimprovethegroup’sperformance.Thisisachievedthroughrigorousadoptionofbestpracticestrategicsourcingandprocurementprinciples,toenhanceoverallefficiency,whilstatthesametimestrivingtoexceeditstransformationtargets.Procurement,withinthegroup,isseparatedintotwodistinctprocessesthosethatarecentrallyledandthosethatlendthemselvestobedecentralised.Theunderlyingprincipleisthatonlypurchasesthatcanbemadeforbusinesspurposesfromaregisteredvendorandwithinethicalguidelineswillbeallowed.Procurementdecisionsarebasedonthefollowingprimarycriteria:BBBEE(specialemphasisandhigherweightingonSMEandBlackWomenOwnedSuppliers)Price,ProductorService(qualityandfitforpurpose),Availability,LocalcontentversusForeigncontent(newlyintroduced)andEnvironmentalpragmatism.2. GroupPerformancePreferentialProcurementThepreferentialprocurementperformanceoftheGroupfor2011hasexceededexpectations.TheBBBEEoverallspendstandsat99.58%.Inthesubcategories,thesmallandmediumenterprise(SME)spendstandsat32.33%againsta15%target;theBlackOwned(BO)spendis10.47%againsta9%targetandtheBlackWomenOwned(BWO)spendis4.50%againsta6%target.Theseresultstranslateintoaverycredibleachievementof19.50pointsonthepreferentialprocurementscorecardoutofapossible20points.DespitetheunderachievementinBWOspend,theGroupremainscommittedtoimprovingthisperformanceandhasintroducedanumberofmeasurestoaddressthisin2012.ThechallengeremainstheunavailabilityofBWOSupplierswhoareabletosupplytheGroupwithgoodsandservicesinthesignificantspendcategories,inasustainablemanner.TheaboveachievementswouldnothavebeenpossiblewithoutthecooperationofthevariousClusterswithintheGroupandtheireffortsarehighlycommendableandappreciated.PreferentialProcurementfor2011thereforeremainsasolidcontributortotheGroup’sBBBEEscorecard.NedbankGroupTransformationReport2011–FinalDraft.27

NedbankGr3. SMThemesettSMma600wooutclot4. LoTheprosupTable5:PreCategoryBBBEEProcSpendfromSpendfromownedSpendfromwomenownTotalBBBEEleve¹QSE:Qualifyin²EME:ExemptroupTransformMEsvs.LargeeSMEdatabaeansthatSMEtlementtermE’sarealreadintenance,pl0SMEsproviduldbethecamtsideofoursuthing.ocalProcuremeGrouphascooductsandserpplies.ThereseferentialProccurementspeQSE¹orEME²suppliersthasuppliersthanedlngSmallEnterpriedMicroEnterprmationReporSupplierOrgsewithinthesform52.1%sandasaruledyprovidingseumbingservicdingtheseservmpussiteat1upplychainfomentAccordommencedwrviceshaslocasultsshouldbcurementscondfromallsu²tare50%blactare30%blacsesrisert2011–FinalganisationsGroupisquiteoftheSupplieearesettledwervicesextensces,officemovicesacrossth135RivoniaRdorexamplecofwithananalysialcontent.ThereportedonorecarduppliersckckDraft.esignificantwerdatabasewwithin7days.sivelyinourBovesandgenehecountry.Ind,wehaveanffeeshops,drisofourSuppheinitialresultninsubsequenPossiblepoints1233220with3201SMwithintheGro.BranchNetworalmaintenannsomeofournumberofSMrycleaning,calierbasetodetsindicatehigntreports.2011verified12.003.003.001.5019.502Esutilisedduup.SMEsalsorkandcampunce.TheGroumajorcampuMEsprovidingaarwash,floweeterminewhaghlevelsofloc1d2ver0 10000 12uring2011.Thoenjoyprefeussitesforrepuphasapproxiussites,atypiadditionalserers,hairsalonatproportioncalcontentby2010rified12.003.003.001.7519.7522iseffectivelyrentialpairsandimately1calexamplervicessandoftheiryour2009verified12.003.003.000.7918.7928

Table5a:ProvincialProcurementprovincialachievementsProvinceSpendfrom Spendfrom Spendfrom Spendfromallsuppliers QSE¹orEME² 50%blackowned30%blackwomenownedEasternCape 79.95% 45.42% 18.87% 2.39%FreeState 70.27% 37.58% 14.68% 4.57%Gauteng 102.21% 32.34% 9.72% 4.05%KwaZuluNatal 93.75% 34.56% 14.02% 9.13%Limpopo 70.91% 48.47% 5.64% 4.51%Mpumalanga 68.55% 25.74% 23.45% 9.15%NorthernCape 98.16% 6.81% 0.79% 2.07%NorthWest 76.37% 39.60% 10.59% 5.59%WesternCape 72.42% 26.40% 18.77% 9.03%Note:Challenges¹MeansQualifyingSmallEntitywithaturnoverofbetweenR5andR35million.²MeansanentitywithanannualturnoveroflessthanR5(five)million.a) BlackWomenOwnedSuppliers(BWO)TheaboveissueispartofanindustryandnationwideoneduetoalackoflargeBWOsuppliersintheeconomy,partofwhichishistorical.TheotherpartisthatthefewBWOcompaniesthatarestartingtoemergearenotnecessarilyinoursupplychain.Butwearecontinuouslyworkingatembracingthefewthatareavailable,helpestablishnewones,andincreasingspendwiththoseonourbooks,asalreadyindicated.b) Landlords&BondOriginatorsThereluctanceofsomethebiglandlordstocomplywithBBBEEposesaconcerntoourBEEspendtargetsaswespendasubstantialamountofourtotalspendtowardspropertyrentals.Aswiththelandlords,thebigbondoriginatorshavealsoshownsomeresistancetowardsbecomingBEEcompliant.Thecombinedtotalspendonthesetwocategoriesofsuppliersisclosetoonefifthofabillionrandsayear.However,thegroupcontinuestoapplypressureandtoconsideraltenatives.NedbankGroupTransformationReport2011–FinalDraft.29

6.EnterpriseDevelopmentEnterpriseDevelopmentisafundamentalpillarintheeffortstocreateemploymentopportunitiesintheSouthAfricaneconomyandtogrowourownclientbase.Thebarrierstoentryforbusinesssuccessarelegionandincludeanarrayofaspectssuchasaccesstofinance,educationoftheentrepreneursandthelevelofgeneralbusinessacumen.Nedbank’sapproachismultifacetedandincludesamixoffunding,transactionalandsupportproductsandservicesthatprovideflexibilityandadaptabilityacrossallindustries.Thisallowsfortheconfigurationofuniquesolutions,inlinewiththediverseneedsofentrepreneursandbusinesses.Regionalteams,withspecialistandexpertsupportsuchasthenationalagricultureteam,continuetodrivethebusinessimperativeoftransformingourclientbaseandsupportingemergingbusinesses.Someofthekeyactivitiesincludenetworkingandlobbyinggovernment,organisedagriculture,agribusinesses,keyindividualsandpursuingprivate/publicsectorpartnershipswiththeobjectiveofprovidinganenablingenvironmentthatiseasytodobusiness.InfurthersupportofenterprisedevelopmentNedbankalsoofferbusinessseminarsthroughourretailarmwhicharespecificallydesignedtofocusonsmallbusinessownersinthestartupphaseofbusinessnamelybusinessyoungerthan2years.Thesearehostedtwiceperannuminmajormetropolitanareasaswellasotheroutlyingareas.Theyareopentoanysmallbusinessownerwantingtoattendtheobjectiveistoaddvalueandgrowthesuccessofbusinessownersspecificallyinthestartupphase.Topicsareverypracticalrangingfromcashflowandfinancetomarketingandsalesandthesearepresentedbyexpertsintheirfields.Wewereinour7thyearofrunningthesesuccessfulseminarsduring2011.2011PerformanceTable6:EnterpriseDevelopmentscorecardCategoryPossiblepoints2011verified2010verified2009verifiedAverageannualvalueofallEnterpriseDevelopment15 15.00 15.00 15.00ContributionsasapercentageofnetprofitaftertaxBBBEElevel 1 1 1NedbankdeliversEnterpriseDevelopmentthroughthesedistinctbusinessareaswhichincludeBusinessBanking,RetailSmallBusinessesServicesandProcurement.Nedbankassistedmanyqualifyingbusinessesacross2011.Significantsuccessesforwere:BusinessBankingLaundryCooperative–KwaZuluNatalThislaundrycooperativeconsistsof30membersandissituatedinruralKZN.ThecooperativeprovideslaundryservicestovariouscampsitesandlodgesinandaroundtheGiant’sCastlearea.Nedbankprovidedgrantassistancetothecooperativein2010andadditionalloanassistancein2011fortheprocurementofequipment.PoultryCooperative–KwaZuluNatalApoultrycooperativelocatedintheNuladistrict,KwaMavundlaTribalAuthorityPortShepstonewasassistedwithenterprisedevelopmentassistance.Thecooperativeconsistsofonemaleandninefemalemembers.TheNedbankGroupTransformationReport2011–FinalDraft.30

membersarehandsonoperatorsandhavegrownthebusinessoperationssteadilysinceinception.NedbankBusinessBankingprovidedaninnovativesolutionoffinancialassistanceandtrainingtothecooperative.Thisassistancewillenablethecooperativetoincreaseproductionfrom600birdspersixweekcycleto4000birdspersixweekcycle.Sustainabilityisfurtheraugmentedthroughthemembers’diversificationintomanufactureuniquecraftsandmaintainingavegetablegarden,tosupplementandgrowthepoultryoperations.Nonprofitorganisationsthatfacilitateemploymentopportunitiesforruralcommunities.Nedbankviewstheroleofnonprofitorganisationsasakeyroleplayerinthequestforjobcreationinthecountry.AnexampleofasuccessfulinterventionistheassistanceprovidedtoanonprofitorganisationthatfocusesondevelopmentandsupportacrossruralKwaZuluNatal.Theirkeyfunctionistofacilitatemarketaccessthroughcreatingpartnershipswithruralandothermarginalisedcommunities.Thisinitiativedemonstratesavaluechainapproachtointegratingcommunityskillsintosustainableemploymentandincomegenerationopportunities.Nedbankprovidedfundingfortheintervention.Trainingandsupportwillbeprovidedastheentrepreneursandthesitesevolveandgrowacrossthebusinesslifecyclestages.520beneficiarieswillbeimpactedthroughthisinterventionwith316jobssupportedandcreated.SMEIncubatorsNedbanksupportsandhasarrangementswithvariousSMEincubatorprogrammesthatfocusonempoweringbusinessestobecomesustainable,jobcreatingenterprises.Onesuchexampleofsuchpartnershipsisanincubatorthatwasimplemented.NedbankpartneredwithacorporatetoimplementanEntrepreneurialTrainingandDevelopmentInitiativein2010.Theprogrammefocusesoncreatingsustainableenterprisesbyprovidingrelevantentrepreneurialknowledge,skillsandmentorship.Nedbankprovidedfundingandfinancialmanagementtraining.Additionalassistancewasprovidedfortheprogrammefor2011intheformofnonrecoverablefundingtoenablemoreentrepreneurstoparticipateintheprogrammein2011.CapacityBuilding,Training,Mentorship,BusinessToolsNedbankofferscustomisedtrainingsolutionsthroughleadingaccreditedtraininginstitutesandserviceprovidersinvariousareasofexpertiseforthepurposeofempoweringtheentrepreneurtorunthebusinessefficiently.Thisextendstocapacitybuilding,training,mentorshipandspecialistassistance.Mentorshipisaimedatguiding,counsellingandprovidingspecialistandtechnicaladvicetotheentrepreneur,throughtheassistanceofinformedandexperiencedbusinessmentors.Clientswereabletoaddressproblemsthroughsuchmentorshipandtraininginterventions.PublicsectorprogrammesNedbankparticipatesinvariousprogrammesthatarestructuredtoaddresscriticalgapsthroughtrainingandcapacitybuilding.Variousinterventionsweresuccessfullyimplementedwithpublicsector/governmentdepartmentsthroughSMEsupportanddevelopment.Theprogrammeswereimplementedtoofferholisticsolutionsforqualifyingbusinessesandentrepreneurs.Theinterventionsofferedbusinessskillstraining,mentorshipandtransferofacumentoensurethattheorycanbepracticallyappliedintotherespectivebusinesses.Theobjectivesoftheinterventionsweretoassistentrepreneurstounpackbusinessopportunities/strengths,understandbarrierstoentry,operational,infrastructureandfinanceissues.NedbankGroupTransformationReport2011–FinalDraft.31

RetailFreeBusinessManagementSeminars–SmallBusinessServicesTheBusinessSeminarsarespecificallydesignedtofocusonsmallbusinessownersinthestartupphaseofbusinessnamelybusinessyoungerthantwoyears.Thesearehostedtwiceperannuminmajormetropolitanareasaswellasotheroutlyingareas.Theyareopentoanysmallbusinessownerwantingtoattendtheobjectiveistoaddvalueandgrowthesuccessofbusinessownersspecificallyinthestartupphase.Topicsareverypracticalrangingfromcashflowandfinancetomarketingandsalesandthesearepresentedbyexpertsintheirfields.In2011atotalof28seminarswereheldaroundthecountryin16distinctareas(seetablebelow),someplaceswereonlyvisitedonce.Theseminarsaregenerallyoversubscribed.ProvinceNoofseatsbookedFirstphaseMay SecondphaseOct TotalTotalCostEasternCape 300 300 600 R310499FreeState 300 300 R155250Gauteng 2000 2200 4200 R2173495KZN 600 600 1200 R620999Limpopo 0 R0Mpumalanga 200 300 500 R258749NorthWest 0 R0NorthernCape 0 R0WesternCape 600 600 1200 R620999Total 4000 4000 8000 R4139990Table6a:SmallBusinessSeminarsconductedBusinessEnablerTheproductisaimedatclientswhoareeithernotaccustomedtobusinessbankingorwhotraditionallywouldnotqualifyforafullyfledgebusinessbankingaccountwithoverdraftfacilitatesandaccesstochequebooksandcards.Theofferingofsolutionstoourclientsbasedon“Iknowyou”philosophycapabilitywithintheRetailclustertoservehouseholdsaswellasentrepreneursandbusinessonanintegratedclient–centredbasis.SmallBusinessServices’focusareaistoensurethattheRetailRelationshipBankingisimplementedwhichisthecombinationofbusinessservicesandprivatebankingconcept.‘FixMyBiz’Nedbankpartneredwith‘FixMyBiz’oneTV.‘FixMyBiz’exposessmallbusinessesthatareexperiencingchallengesincertainareastoexpertadvice.Throughthehelpofbusinessconsultants,theshowgavepracticaladviceonfixingtheirbusinesswhichwillhelpmakethemmoresuccessful.Throughtheshowviewerswhowanttostartabusinessorcurrentbusinessowners,aregivenpracticalpointerskeytorunningasuccessfulbusiness–thereforegrowingbusinessskill,competenceandconfidence.ExtendedPublicWorksProgrammeTheextendedpublicworksprogramme(EPWP)isaninitiativeoftheDepartmentofPublicWorks.AspartofthisinitiativethedepartmenthaslaunchedtheVuk’UphileLearnershipProgramme.Nedbankhasbeenappointedasthefinancialproviderfortheimplementationofthisprogramme,furthertothisNedbankhassignedaMemorandumofAgreement(MOA)withthedepartmentofPublicWorks.NedbankGroupTransformationReport2011–FinalDraft.32

TheprimaryaimoftheExtendedPublicWorksProgrammeis: TodevelopemergingEntrepreneursandassistwithJobcreation. TobridgethegapbetweenthefirstandsecondeconomywithintheSouthAfricanlandscape.Thementorsprovideassistancewithclassroomlearningandonsitetraining. Toplayanactiveroleasapartnertoachievethegovernment’sjobcreationandpovertyalleviationdrivewithintheprescribedtimeframes. Tominimisetherisksassociatedinlendingtothismarket,thusallowingthebanktoextendshortcreditfacility,providedthattheemergingcontractorhasattendedandpassedtheclassroomlearningandhasamentorappointed.Performancetodate:eThekwiniMunicipality(SmithStreet)LearnershipprocessstartedinDecember2010withatotalof34applicantsbeingassessedand28approvedaspertheMOAsignedon04March2011.ATrainingproviderwasintroducedtotheMunicipalityinJulywhoimplementedclassroomtrainingforthedurationof40daysUmsobomvuMunicipality–NorthernCape:ColesburgTheLearnershipprocesscommencedFebruarywith30Learnershavingapplied(15contractorsand15Supervisors).20LearnersweresuccessfullyapprovedasperMOA(10contractorsand10supervisors)whostartedwithonsitetraininginJuly.NedbankGroupTransformationReport2011–FinalDraft.33

NedbankGr7.SocIntermsoftscorecard,wcontributetandtheNedIn20111,8%million),weprovinces.Table7:SocCategoryAverageannDevelopmenBBBEEleveThetablebeProvince/CategoryArts&CultureDevelopmentEducationEnvironmentHealthHIV/AidsSportWelfareOtherTotalroupTransformcioEcotheBBBEECowehavetospetothistotalindbankExterna%ofNedbanknttowardssucioEconomicnualvalueofSntasapercenlelowillustrateECR0.00tR0.35R1.46tR0.00R0.05R0.00R0.00R0.53R0.00R2.40mationReporonomicdes,forNedbendatleast1cludespendinalBursaryFunGroup’s2010upporting448DevelopmenSocioEconomntageofnetpesthequalifyiFSGAR0.00R0.0R0.00R2.1R1.90R9.8R0.00R0.0R0.10R0.4R0.30R0.0R0.00R0.0R0.00R1.4R5.08R0.0R7.39R13.8rt2011–FinalcDevebanktoqualify%ofthe2010ngbytheNedd.0NPAT,orR7socioeconomtscorecardmicrofitaftertaxngSEDcontriKZN00R0.0011R1.2387R2.1900R0.0045R0.1000R0.0100R0.0042R0.5700R0.0085R4.10Draft.lopmeyforthefullfi0SANPAT,whdbankFoundat8million(R89micdevelopmPossiblepointsx5bution(Rm)bLIMPR0.00R0R0.03R0R1.65R1R0.00R0R0.00R0R0.00R0R0.00R0R0.06R0R0.00R0R1.74R1entivepointswithichequatesttionTrusts,BO9millionincludmentorsocials2011verified5.001byprovincefoPNAT0.00 R0.830.03 R10.421.13 R16.540.00 R8.710.00 R0.030.00 R0.000.05 R2.700.00 R0.050.00 R1.131.20 R40.42hintheSEDcotoR44,6millioOETrusts,TrudingtheCommsustainability1d2ver01orthe2011reNWNR0.00RR0.43RR0.89RR0.00RR0.00RR0.05RR0.00RR0.00RR0.00RR1.36Romponentofon.Theamouust,NedbankAmunityTrust)objectivesin2010rified5.001portingperioNCWCR0.00R0.00R0.28R0.62R0.30R3.43R0.00R0.00R0.00R0.02R0.00R0.01R0.00R0.00R0.00R1.13R0.00R0.00R0.58R5.213thentsthatAffinities(2010:R79allnine2009verified5.001d:Total0R0.832R15.483R39.380R8.712R0.751R0.370R2.753R3.770R6.221R78.264

NedbankGrNedbankFTheNedbanintoneedycThefundswEduHeaComSkiThephilosophenceacareThegeograpfor2011areNote:theprojeCommentsEasfolloffEaswhEducationThefinanciamakessensethatbasicedInlinewithoallocationfoNedScieroupTransformoundationTnkFoundationcommunitiesawillbechanneucation,alth,mmunitydevellsdevelopmephyoftheNeefulassessmephicalspreadeasfollows:ectsdepictedintssternCapeistowedbyLimpfundsasbenesternCapeanichisapilottalservicesseceforustopayducationinstiourownbusinor2011.TheNdbankFundisenceteachersmationReporrustsn,theGroup’sandworthyplledintothegelopment,andent.edbankFoundentofallpotenofqualifyingphegrapharethothepoorestprpopo,whichheficiariesforodLimpopospakingplacecutorisoneofmyspecialattentutionsprodunessprioritiesNedbankFounaMathsandSsaswellasprrt2011–Finalprimarycorprojectsacrossgroup’scorefodationistosupntialprojectsprojectshonosehonoureddurrovince,beinghastwo.Accourprojects.endingisalsourrentlyinonmanysectorsntiontoeducauceasuperiorsaswellasnandationsuppoScienceProgrovidestutoriaDraft.poratesocialinsSouthAfricaocusareas:pportprojectsisundertakenouredbytheNringthereportingghometosixordinglytheseoskewedbythlythosetwopaffectedbythationneedsarqualityofstuationalimperaortednolesstammeakeyalsupporttolnvestmentarmduring2011.swhichhaveanbeforecommNedbankFoungperiodasprescrofthetoptenetwoprovinceheNedbankFprovinces.hechronicshocrossthecouudents.atives,educatthan21projecyprogrammelearnersinGrm,ivestedappameaningfulamittingtothendationaspreribedqualifyingcnpoorestmuneshavereceivundisaMathsortageofskillsntry.Thiswillionreceivedtctsnationally,launchedin20ade10and11proximatelyRandlonglastiem.escribedbythcriteriaofthedtinicipalitiesinvedthehighess&SciencePrsandasamajgoalongwaythelionshare,including011thattrain1.Atotalof443R34,9millioningimpactedtiCodesCodes.thecountry,stallocationrogramme,jorplayer,ityinensuringofthensMathsand4teachers5

NedbankGroupTransformationReport2011–FinalDraft.36and600studentswereenrolledintheprogramme,inthetwoprovinceswiththelowestperformanceineducation,EasternCapeandLimpopo.NedbankMatricRevisionProgrammerunningmuchneededMatricrevisionsessionsforGrade12learners,spanningacrossfiveprovincesandcoveringatotalof25schoolsandinexcessof2000learners.TheprogrammeisrunfromLoveLifecentresandprovidessupportinMathematics,PhysicalScience,MathsLiteracyandTechnology.Initssecondyear,thisprogrammehasbeenextendedtherebyprovidingsupporttothelearnersthefullacademicyear.MobileLaboratorieslackofaccesstolaboratoryequipmentrequiredtorunpracticalexperimentswhicharecriticalintheunderstandingofPhysicalSciencehavebeenidentifiedasoneofthekeybarrierstoproducingstudentswhoexcelinthisarea.NedbankFoundation,throughitspartnershipswithTracSouthAfricaandSangarihasbeenabletoprovidethismuchneededequipmenttoruralareasacrosssixdifferentprovinces.EarlyChildhoodDevelopmentisessentialinlayingthefoundationforfuturelearning,andNedbankFoundationhasallocatednolessthanR1.5mtowardsvariousprojects,includingthedistributionofNedbankEdutainersandECDresources,aswellastrainingofECDPractitioners.HealthThestateofthepublichealthcarefacilitiesinthecountryposesaparticularchallengewhichisnotbeingaddressedbygovernmentatpresent.In2011weprovidedR414000fortheestablishmentofadedicatedpaediatricunitwithintheemergencyandaccidentunitofLeratongHospitalintheWestRand,whichisfullyequippedwiththelateststateoftheartdiagnosticandmonitoringequipment.Thisunitallowsthehospitaltheabilitytoattendtochildrenwhocometotheemergencyandaccidentunitintheirowndedicatedunit,whenpreviouslytheyhadtobetreatedintheadultunit.HIV/Aidsalsoremainsanareaoffocus,wheretheNedbankFoundationsupportseffortsaimedatalleviatingtheplightofthoselivingoraffectedbyHIV/AIDS.ThisisachievedthroughsupportinginitiativessuchastheRegencyFoundation,adonationforthephaseonebuildingofIsiphephelohomebasedcarefacility,andR300000supportforLeboneVillagewhichisacentrecaringforchildrenaffectedbyHIV/Aids.InFebruarywehandedoverthefinishedextensionsoftheHopetownPrimaryHealthcareClinic,averypoorcommunityinNorthernCapejustoutsideofOrania.TheR250000worthofextensionshaveenabledtheclinictoattendtoHIVcounsellingandtestinginprivate,akeycomponentofmanagingHIV/Aids.Thetrainingofhealthprofessionals,particularlythosewithspecialisedskillsisimportanttoimprovingthelevelofexpertiseavailablewithinthehealthsector.In2011wecontributedR400000totheCollegeofMedicineinSAwhichistheschoolthatprovidesspecialisttrainingformedicaldoctors.WealsoprovidedR230000forthetrainingofhomebasedcaregiversforLesediHospiceinFreeState.CommunityDevelopmentForacorporatetobesuccessfulinSouthAfrica,itisimportantthatitplaysavisiblerolewithinthecommunitiesitserves.Someofthemajorcommunityrelatedinitiativesin2011were:TheNedbankHippoWaterRollerProject,whichwaslaunchedin2010hasbeenextendedwithanadditionalR3.5millionbeingcommittedtowardsthis.DistributionoftheHippoWaterRollershadbeenextendedtoKurumanintheNorthernCape,LusikisikiintheEasternCapeandruralKwaZuluNatal.R500000wascommittedtotheNedbankWinterCampaign,forthedistributionofblanketsacrossthecountry,primarilybenefitingvulnerablegroupsofwomen,children,theelderlyandthedisabled.Variousmediapartnerswereused,e.g.SAFM,JacarandaFMandRadio702.Wehavealsocommittedsupportforvariousprogrammesforpeoplelivingwithdisabilitiesandsupportfororphanedandvulnerablechildren:oR592000totheNationalInstitutefortheDeaf,supportingthetrainingofhearingdiasbledlearnersinOfficeAdministrationoR500000totheJohannesburgChildwelfare

oooR100000forMasibambaneHomefortheDisabledR100000totheFreeStateChildWelfareR50000toeachofthefollowingorganisations:ActionfortheBlind,AutismSA,BoksburgChildWelfare,ChildWelfareKwaDukuzaSkillsDevelopmentWherepossible,projectsfundedintheskillsdevelopmentandjobcreationfocusareahavebeenlinkedwithEnterpriseDevelopmentatNedbankforfurtherassistance.SupportwasprovidedtotheHoldingHandsprojectintheNorthWestProvince,asewingprojectaimedatcreatingemploymentfortwentywomenintheCastelloarea.TheR380000fundingprovidedwasusedtopurchaseadditionalsewingequipmentfortheproject.In2010weprovidedfundingtoIntshangaTrainingInstitutioninKwaZuluNatal,forthedevelopmentofmaterialrequiredfortheinstitutiontoobtainaccreditationforqualificationsinplumbing,electricalengineeringandbricklaying.In2011wehavecommittedR513000towardsthetrainingof15learnersinelectricalengineeringand12learnersinplumbing.NedbankExternalBursaryprogrammeNedbankinpartnershipwiththeNationalStudentFinancialAidSchemeadministerexternalbursariesacrossSouthAfrica.ExternalbursariesformpartofNedbank’stalentpipelinetoattractanddevelopgraduatesaspartofNedbank’sthreeyearskillsplan.BursariesgrantedincludefundingtowardsstudentsinForteHare,NelsonMandelaMetropolitan,UniversityofLimpopo,UniversityofVenda,WalterSisuluUniversity,NorthWestUniversitytomentiononlyafew.UniversityAfrican Coloured Indian Totalblack WhiteMale Female Male Female Male Female Male Female Male FemaleTotalCUT 1 0 0 0 0 0 1 0 0 0 1DurbanUniversityofTechnology0 1 0 0 0 1 0 2 0 0 2FORTHARE 1 1 0 0 0 0 1 1 0 0 2NMMU 1 2 0 0 0 0 1 2 3 2 8NorthWestUniversityNorthWestUniversity(Mafikeng)0 4 0 2 0 0 0 6 1 1 81 0 0 0 0 0 1 0 0 0 1NWU(Vaal) 0 0 0 0 0 0 0 0 1 0 1RhodesUniversity 2 4 0 0 0 1 2 5 1 0 8Stellenbosch 0 0 1 0 0 0 1 0 1 2 4TUT 1 0 0 0 0 0 1 0 0 0 1UNISA 2 3 0 0 0 0 2 3 1 2 8UniversityofCapeTownUniversityofFreeStateUniversityofJohannesburgUniversityofKwaZuluNatal9 2 0 1 2 2 11 5 5 1 224 6 1 0 1 0 6 6 8 26 469 25 0 1 1 1 10 27 1 1 395 3 0 0 5 12 10 15 0 0 25NedbankGroupTransformationReport2011–FinalDraft.37

UniversityofLimpopoUniversityofPretoria7 8 0 0 0 0 7 8 0 0 158 8 0 0 0 0 8 8 7 3 26UniversityofVenda 12 14 0 0 0 0 12 14 0 0 26UniversityofWesternCapeUniversityofZululandWalterSisuluUniversity0 1 1 0 0 0 1 1 0 0 25 4 0 0 0 0 5 4 0 0 95 5 0 0 0 0 5 5 0 0 10WITS 5 12 1 0 5 4 11 16 2 2 31Total 78 103 4 4 14 21 96 128 31 40 295Totalcost R3326455 R4302076 R166058 R182285 R583456 R814888 R4075969 R5299249 R1327456 R1559114 R12261787NedbankAffinitiesGreenTrustTheGreenTrustfocusesoncommunitybasedconservation,recognisingthatlittlewillbeachievedunlessallSouthAfrica’scitizensareinvolvedintheconservationofournaturalheritage.InconjunctionwithWWFSA’sConservationDivisionandadvisersfromrespectedconservationorganisationsinSouthAfrica,projectsareselectedaccordingtostrictcriteria.ExamplesofprojectsfundedbyTheGreenTrustrangefromenvironmentaleducationtotreeplantingandfoodgardeninginpoorerurbanenvironmentsTheSportsTrustEstablishedin1995asajointventurewithwhomallwithasharedgoalofprovidingopportunitiesforallSouthAfricanstoplaysport.TheSportsTrusthasprovidedsportingequipmentandupgradestosportingfacilitiesinoutlyingorpreviouslydisadvantagedareasNelsonMandelaChildren’sTrustThevisionoftheNMCFistochangethewaythesocietytreatsitschildrenandyouth.ThefivekeystrategicprogrammeareassupportedbytheNMCFarethewellbeingofachild,leadershipandexcellence,educationanddevelopment,disabilityand‘goelama’(wellbeing).SincethelaunchoftheNedbankChildren’saffinity,NedbankGrouphasdonatedoverR15mtotheNMCF.During2011,NedbankdonatedR6,5m.TheArts&CultureTrustTheArts&CultureTrustisauniquealignmentofagenciesinvolvedinthedevelopmentofcultureandthefosteringofcreativityinSAthroughsupportofarts,cultureandheritageprojects.During2011,NedbankdonatedR0,8m.SPONSORSHIPSNedbankGroupTransformationReport2011–FinalDraft.38

WhiletheprimaryaimofNedbankGroupSponsorshipsistoprovideaplatformonwhichtoprofiletheNedbankbrand,thegroupisalsocommittedtoharnessingitssponsorshipstomakeadifferenceinthelivesofpeoplefromthevariouscommunitiesinwhichitoperates.Thiscommitmentisclearlydemonstratedthroughthestrongdevelopmentalfocusofallsponsorshipopportunities.NedbankGroup’sportfolioofsponsorshipsspecifictotheWesternCape,currentlyinclude;CapeWinemakersGuild(CWG)NedbankGroup’ssponsorshipoftheCWGenablesthegrouptobehighlyinvolvedinthecountry’swineindustryandsupportiveofitstransformation.EstablishedbyNedbankGroupandtheCWGin1999,theNedbankCapeWinemakersGuildDevelopmentTrustiswhollyfundedbydonationsandproceedsraisedthroughsilentandcharityauctionsatvariousNedbank/CWGeventsthroughouttheyear.ThetrustinvestedmorethanR500000insocialupliftment,scholarshipandmentorshipprogrammesforaspiringwinemakersin2010.Thetrustalsoprovidesfinanceforinfrastructuralprojectsatlocalschools,schooltuitionfeesandbursariesforpotentialprotégéprogrammestudents.OtherSponsorshipsVariousexamplesofthesesponsorshipsinclude;NedbankDisabledGolfOpen–Langebaanfor2011and2012.NedbankCup:Variousgamesasperknockoutrounds–2008/09/10.RoadRunning:NedbankCapeTownCityMarathon2007/2008NedbankOldMutualBudgetSpeechCompetition–ongoingCONSUMEREDUCATIONNedbankConsumerEducationLearningTheNedbankConsumerEducationlearningmaterialwasfirstdesignedanddevelopedin2008asaresultofanundertakingmadebythebankwiththeBankingAssociationofSouthAfrica.Theaimofthelearningmaterialwastoprovideclientsandpotentialclientsaccurateandrelevantinformationthatwouldassisttheminmakinginformeddecisionsregardingtheirfinancialwellbeing.Thelearningprogrammedevelopedin2008consistedofthreemainmodulesnamely:BankingProductsandServices,BuyingonCreditandPersonalBudgeting.ThesemodulesweredesignedatNQFLevel1and2toaddresspersonsearningbetweenR1500–R7500permonth.Inpartnershipwithsomeofitscorporateandgovernmentclients,NedbankConsumerEducationbusinessunitsuccessfullyrolledoutthelearningprogrammenationallytothestaffmembersofparticipatingorganisations.Positivefeedbackwasreceivedfromthesesessionsandafurtherneedwasidentifiedtodevelopsimilarprogrammesthatwouldaddressstaffmemberswithahigherincome.Theneedforthismaterialwasbasedonobservationsmadebyboththebankandtheparticipatingorganisationsthathigherincomeearnersweremoreexposedtobeingindebted.NedbankGroupTransformationReport2011–FinalDraft.39

In2011theexistingmaterialwasreviewedandupdatedandadditionalmaterialwasdevelopedtomeettheneedthatwouldaddresshigherincomeearners.ThismaterialwasdevelopedattheNQFLevel5andthefollowinglearningthemeswereaddressedinthematerial:BankingProductsandServices,BuyingonCreditPersonalBudgeting,InsuranceandAssuranceRegion/ProvinceBankingServicesNumberofattendeesBudget Credit TotalAmountEasternCape 904 2033 1581 4518 R399748FreeState 270 607 473 1350 R119447Gauteng 1474 3315 2579 7368 R651913KwazuluNatal 3406 7664 5962 17032 R1506973Limpopo 837 1885 1466 4188 R370550Mpumalanga 1367 3075 2392 6834 R604665NorthWestProvince 145 325 253 723 R63970NorthernCape 180 405 315 900 R79631WesternCape 1125 2531 1969 5625 R497694Total 9708 21840 16990 48538 4294589ConsumerFinancialEducationdemandhasincreasedfrominternalandexternalstakeholders,asaresultithasbeenrecognisedasrelevant,effectiveandanecessarytooltotransformconsumersbehaviour,attitudesandanenablertomakeinformedpersonalfinancialdecisionsTodatewehavereachedjustunder30000delegatesacrossthecountrywithKZNleadingallotherprovincesandtheFreeStateandNorthernCapecominglast(excludesTCTSSA);Nedbankmadegreaterinroadsinanumberofmunicipalitiesduringnewbranchlaunches,inthatbeforeabranchislaunchedwedeveloprelationshipswithlocalleadersandempowercommunitieswithFinancialliteracyprogrammes;NewbranchesthatwerelaunchedandConsumerEducationrolledoutincluded:o VendaPlaza,Thohoyandou;o PhilaniPlaza,UmlaziDurban;o EsikhaleniPlaza,Esikhawini,RichardsBay;o MalloftheNorth,Polokwane;o ModjadjiPlaza,Limpopo;o KurumanintheNorthernCape,o KwaMashuPlaza,Durban;o NquthuPlaza,KZN;o MitchellsPlain,2branchesCapeTown;o MountFrere,EasternCapeando Edendale,Pietermaritzburg.(thesebranchesexcludenoninterestbranchesthatwerealsolaunched)Nedbank@workNedbankGroupTransformationReport2011–FinalDraft.40

Corporatecompaniesrequireconsumerfinancialeducationtoaddresstheneedsfortheiremployeesandthisisdeliveredincollaborationwithcompanies,organisedlabourmunicipalitiesandgovernmentdepartments.TeachChildrenToSaveSA(TCTSSA)Thisyearwehavereachedjustunder20000learners,142schoolsand254NedbankstaffvolunteersacrossthecountryEnvironmentSustainabilityCEoffersustainabilityeducationtrainingtobothlearnersandadultsnominatedtobenefitfromtheprogramme.Thisprogrammealsoofferscommunitiestrainingonhowtosustainprojects,povertyalleviationandjobcreation,schoolsandcommunitiesareidentifiedwithintheproximityofthenewbranchtobelaunched.ImbizoConsumerfinancialeducationsupportsImbizobrancheswithfinancialliteracytrainingaspartoftheirtargetmarketwhichisruralandmostlyunbanked.Currentlytheyarefivesitesinplace,oneinMpumalanga,threeinEasternCapeandoneinGauteng.PublicSectorNedbankisrunningfinancialliteracyprogrammesincollaborationwithvariousgovernmentdepartments,inprovincesandmunicipalities,aspartofthetenderprocessconsumerfinancialeducationisofferedasavalueadd.ThroughthistrainingprogrammeNedbankhasbeenabletoaddresstheperceptionofhighbankchargesastheprogrammeisgearedtoassistconsumerstochooseandusetherightproductsandservicesfortheirpersonalneedsCharitableDonationsAspartofservingthecommunityweoperateinNedbankPropertyServicesdonatedarangeofofficeequipmentto68NGO’sandNPO’sthroughouttheGauteng,KwaZuluNatalandWesternCapeprovinceswhichincludedvariousschools,daycarecentres,welfareorganisations,churchesandhomes.TheestimatedvalueofthedonationsamountedtoR160k.NedbankGroupTransformationReport2011–FinalDraft.41

8.AccesstoFinancialServicesAlthoughnotpartoftherequirementsoftheDTIscorecard,thissectionreflectsNedbank’scommitmenttodeliverbeyondmerecomplianceaswellasourcommitmentontheentrenchmentoftheprincipalsandrequirementsonthenowdefunctFinancialSectorCharter.Nedbankretainedtheprocessofsettinganddeliveringoninternaltargetstoensurethatwecontinueandexpandthetransformationofourbusinessservicesandourclientbase.BywayofrealisingitsgoalofbeingabankforallSouthAfricans,NedbankGroupcontinuestoinvestinmakingbankingservicesandaccountsmoreaccessibletoallmembersofSouthAfrica’spopulation.Nedbank’sdistributionfocusuntil2005wasprimarilyinthebranchnetwork,sincethenanumberofmergersandintegrations(Perm,FBCFidelity,NBS,BoE,PEP,PeoplesBank&OMBBank)tookplaceresultinginsomebranchoptimisationsoverthepast10years.Itisappropriatetonotethattheabovementionedacquisitionsandmergersresultedinanumberofclosuresofbrancheswhereduplicationexisted,howeverthecostsavingsenabledNedbanktoextenditsfootprintwithregardstoreachinotherareas.AsoftheendofDecember2011,theexistingNationalbranchfootprintof465(169NedbankinRetailerOutlets,61PersonalLoanBranches,385PersonalLoansKiosksand35PrivateBankSuites)comparesfavourablywiththatofthecompetitionifonetakesrelativeoverallmarketshareintoaccount.ThisdoesnottakepropercognisanceofNedbank’slocationsrelativetothecompetitionbutitdoessuggestthatinabsolutetermsthereisnoshortageoffootprintasNedbankhasatotalof1080NationalNedbankbrandedstaffedpointsofpresence(PoP).IncludedinthenumbersisNedbank’saggressiveapproachtogrowitsfootprintinthenontraditionalbranchspacewithnewinnovationsincludingBranchintheBox,Mobilebranches,InRetailerOutlets(NiR),PersonalLoanBranchesandPersonalLoanKiosks.Theseinnovationsbringamuchmorecostefficientoptionforaddingfootprintandarefastprovingtheirpopularityinnewmarkets.TheSelfServiceChannelStrategyhasenjoyedanaggressiveexpansionplanoverthelastthreeyears.ThisintotalgivesNedbankabaseof2272selfownedATM’s,549OutsourcedATMsandSelfServicesDevices(SSDs),385SelfServiceTerminals(SSTs)and6198CashbackPointofSale(POS)devicesasattheendofSeptember2011.Nedbankhasidentifiedtheexpansiontoaccesstocashasapriorityoverthenextthreeyearstoclosethegap.Table8:AccesstoFinancialServicesCategory2011 2010 2009verified verified verifiedAccesstofinancialservices– Products(Mzansi)¹ 290,950 315,024 317,286Origination:Affordablehousing(Rm)¹ R3,253 R1,772 R841BlackAgricultureLoans(Rm)¹ R164 R70 R20BlackSMEFinancing(Rm)¹ R3,916 R2,099 R759ConsumerEducation² 0,56% 0.27% 0.29%¹Cumulativesince1January2009²Measuredagainstannualtargetof0.2%netprofitaftertaxofRetailNPAT.BankingtheUnbankedNedbankGroupTransformationReport2011–FinalDraft.42

Nedbank@WorkTheNedbank@WorkbusinessUnit,whichfallswithinourNedbankRetailDivision,wasspecificallyreengineeredwiththepurposeofdevisingemployeeofferingstoourmostvaluedCorporateandBusinessBankingclients.Nedbank@Workseekstoprovideaservicetocompanyemployeesaimingtoaccompanythemontheirfinancialjourney.Wehavethereforefocusedourvaluepropositionontheproductsetwebelievetheywouldutiliseonadailybasis,whichistheirtransactionalorsalaryaccount.Indoingthis,weensurethattheSouthAfricanworkforceunderstandtheirbankingproductsandselectthecorrectproductfortheirneeds,whichinturnleadstoawinwinsituationforallparties.Weaimtoofferemployeesofcompaniesabsolutechannelofchoice,meaningthattheywouldhavetheabilitytotakeupourofferthroughanyoneofthefollowingchannels:Approximately450NedbankBranches,nationally;Theinternet(onwww.nedbank.co.za)OurNedbank@WorkContactCentre(0860102192)orthroughadesignatedKeyAccountRelationshipManager.Mzansi–ActiveaccountanalysisNedbankinitiallyadoptedtheindustrystandardMzansiExemption17productinfavourofintroducingitsownsimilarproduct.TheMzansiproductwaslaunchedwhichisacardbased,entrylevelproductwithsavingsandtransactionalcapabilitiesandasimplifiedpricingstructure.NedbankRetailhasimplementedMobileSalesTeams(MSTs),togointoruralsettlementstohelpeducateresidentsinfinancesandopenMzansiaccounts,thustakingNedbanktothepeople.ThishasbeenakeydriverinhelpingNedbank'sMzansiaccountacquisition.ThetablebelowillustratesthenumberofopenandactiveMzansiaccountssince1January2009. 2011verified2010verified2009verifiedTotalActiveaccounts 290,951 315,024 317,28603months 35479 95,515 105,83412months+(2trxs) 196655 14,796 412months(1trax) 58817 204,713 211,452TotalInactiveAccounts 400,168 53,362 24,06412months+(

NedbankKeYonaNedbankunderstandsthatkeytomakingbankingaccessibletoallinSouthAfrica,beginswiththeupliftmentofcommunitiesandcreatinganenvironmentofinclusiveness.Nedbankcontinuestoengagewithvariouscommunitiestolistenandunderstandthefinancialneedsofourclientsandsocietyatlarge.Throughlisteningtocommunitieswehavegainedgreatinsightintotheirspecificneeds.Assuch,theyear2011sawgreaterfocusinentrylevelbankingwiththelaunchofNedbank‘KeYona’offering.TheNedbank‘KeYona’offeringcomprisesofthePayAsYouUse(PAYU)transactionalaccount,FuneralCover,PersonalLoan,JustSaveaccountandthemoneytransfersolutionVodacommpesaenablingclientstotransact,borrow,saveandinsure.Since2005,throughtheImbizoinitiative,NedbankcontinuestogrowitsfootprintacrossSouthAfricainareasitwaspreviouslynotrepresented,includingcommunitiessuchasNgqeleni,Centane,Acornhoek,Idutywa,Thohoyandou,MountFrereandKuruman.Nedbankhasalsoinvestedinbuildingitsinnovative,alternatedistributionoutletsthroughitspartnershipwithPicknPayandBoxerStoresforthepastsixyears.Thesealternativeoutletsnowat169,addtotheexistingnetworkof465branchesand446NedbankPersonalLoanKiosks,whichincludeNedbankpresenceinCashBuildandBuildItaswellastheNedbankMobileSalesteamsincommunitiesacrossthecountry.Nedbankcontinuestogrowitsclientbaseofover3millionentrylevelbankingclientsincludingtheyouth.Reach 2011 2010 2009 2008 2007verified verified verified verified verifiedBranches 465 452 438 445 422ATMs 2,279 1,980 1,847 1,746 1,557BranchesbyProvince EasternCape 38 36 36 38 33FreeState 12 12 11 11 10Gauteng 160 161 151 154 149KwaZuluNatal 86 83 87 88 83Limpopo 28 25 24 24 23Mpumalanga 20 20 19 19 17NorthernCape 5 4 4 12 12NorthWest 14 11 12 4 4WesternCape 102 100 94 95 91 465 452 438 445 422BranchesopenonSundaysapilotstartedinNovember2010provedthattherewasmeritinextendingbusinesshourstoSundaywhichresultedinNedbanknowtradingfrom10amto14pmonaSundayacrossaselectionof33branches.FSCSitesInanefforttoincreaseaccesstofirstorderretailfinancialservicestoagreatersegmentofthepopulation,Nedbankincollaborationwithotherfinancialinstitutions,identified32ruralFSCSitesindesperateneedofrepresentationwithin10kilometresof80%oftheLSM15population.Nedbankreacheditsagreedtargetattheendof2008andstillcontinuesitssupportintheseareas.NedbankGroupTransformationReport2011–FinalDraft.44

Sitename Province 2011verified2010verified2009verified2008verified2007verifiedTotal 8 8 8 8 8Shiluvana Limpopo 1 1 1 1 1Monsterlus Mpumalanga 1 1 1 1 1Dimbaza EasternCape 1 1 1 1 1JerusalemTrust Mpumalanga 1 1 1 1 1Modimolle Mpumalanga 1 1 1 1 1GaMogatlane Limpopo 1 1 1 1 1Ngqeleni EasternCape 1 1 1 1 1Highflats KwaZuluNatal 1 1 1 1 1AgricultureFinanceNedbankAgriBusinessdevisesanddeliverstailoredsolutionsfortheagriculturalindustry.Ourempoweredregionalteamsincludeagriculturalspecialists.Theyprovideguidanceandsupportonallagriculturerelatedrequests,andensurecontinuity,accessibility,andquickerdecisionmaking.Partnershipswithleadingacademicinstitutionskeepusabreastofthelatestresearchdevelopmentsandemergingtrendsintheindustry.Nedbank’sagriculturefocustargetsthethreesubsectorsofagriculturenamelyhorticulture,livestockandfieldcrops;incorporatingtheentirevaluechain(primaryandsecondaryagriculture).Clientshaveaccesstoafocusedrangeofproductsandaccesstospecialistagricultureeconomistsinregionalofficesthroughoutthecountry.Solutionsextendtoaccesstofinanceandcapacitybuildingormentorship.Variousemergingblackfarmersandcooperativesbenefittedfromaccesstofinance,supplementedwithadditionalbusinessskillstrainingandspecialistadvisoryservices.Thisensuredthatrelevantupskillingwasprovidedinlinewithgrowthandexpansionofthefarm.LocalisationAlthoughtheAgricultureUnitcoordinatesandmanagesagrirelatedactivities,theactualexecutivedecisionsareallmadeonaregionallevel.Wecurrentlyhave68regionalofficeswhichensurethattheclientsbusinessbenefitsfromadedicatedregionalteamwithplentyoflocalknowledge.EachteamoperateswiththefullsupportoftheAgriculturalUnit,whichlendsadeeperunderstandingofthedynamicsofthelocalagrimarket.AlocalAgriBusinessManagerheadsupateamthatinterfacesbetweentheclientandNedbank’sextensivenetworkoffinancialandagriculturalspecialists.NedbankGroupTransformationReport2011–FinalDraft.45

NedbankGroupTransformationReport2011–FinalDraft.46RegionalteamsareallfullyempoweredtomakedecisionswithouthavingtoreverttoHeadOffice.Thisensurescontinuityandaccessibility,whilemaintainingquickturnaroundtimesonrequests.Italsoenablesustoprovideafastandefficientresolutiontoallfinancialqueriesandconcerns.SpecialisationOuragrispecialistsareseasonedprofessionalswithathoroughunderstandingofourclient’sbusinessandtheirrequirements.Theyarewellawareofwheretheagriclientispositionedwithintheagrisectorandhowtheirneedscanbestbemet.Theyalsofullyappreciatethevariableandcyclicalnatureofagri–businessesandhowthisimpactsontheclient.Basedonthiskeeninsight,cultivatedthroughyearsofexperience,wehavetailoredcosteffectivefinancepackagesthatcaterspecificallyfortheagrisector.Nedbankapproachesblackeconomicempowerment(BEE)transactionswithflexiblesolutions.Theseareunderpinnedbyoursupportforenterprisedevelopmentasameansofensuringsustainablegrowthofblackownedagrirelatedbusinesses.Ourspecialistindustryknowledgeisalignedtotheneedsofboththeprimaryandsecondaryproductionofthreemainmarketsectors(aswellasitsvaluechain).Theseare:agronomyhorticulturelivestockproductionCustomisationAtNedbankwespecialiseinputtingtogetherflexible,relevantandcosteffectivefinancepackages.Weoffertotalsolutionsthattakeintoaccounttheclientsagribusiness’presentpositionandfuturegoals.NedbankBusinessBankingisaleadingprovideroftailormadeagriculturalfinancialsolutionsoffering:oSuperiorelectronicbankingcapabilitiesoAstraightforwardprofessionalapproachtoservice,andoAhighlycompetitive,individuallystructuredpricingplan(basedontheclientsindividualriskprofileandthetrackrecordoftheirbusiness).Ouragriculturefinancialsolutionsinclude:oLendingsolutionsoInvestmentsolutionsoTransactionalbankingsolutionsoValueaddedsolutionsInitiativeswithintheagriculturalsectorinincluded;InvolvementwiththeWWFSustainableAgricultureProgrammeasmainsponsor.TheGreaterPaarlareapartnershipwithWellingtonPreparatorySchoolonaneducationallevelwherebythebankhadaninteractiveeducationalsessionwiththeGrade1toGrade7learnerstotalling150teachingthemthebasicsaboutsaving.Wearealsoerectingasustainable"gardentunnel"attheschooltofurthertherecyclinginitiativeswherebyfreshproducewillbecultivatedinthetunnel&thensoldatamarketdayattheschool.

Involvementwiththewineindustryincludes;o SponsorshipofVinproInformationday,attendedby500delegates.o SponsorshipofSAWITconference.o SponsorshipofCapeWinemakersGuilde.o SponsorshipoftheNedbankGreenWineAwards.SponsorshipoftheWesternCapeFarmerandNewFarmersoftheyearawardfunction.InvolvementwitheducationandtrainingprogrammesinpartnershipwithCENCE.InvolvementwithyouthprogrammesthroughthesponsorshipofyouthshowsinpartnershipwithAgriExpo.NedbankGroupTransformationReport2011–FinalDraft.47

AgricultureDevelopmentprovincialtableanalysisAgricultureDevelopment:Valueofloansoriginatedasof1January2009 to31December2011Province LoanSize Turnover05m 5m 10m 10m 15m 15m 20m >20m UnknownEasternCape0500k2375972 133942 500k1mil3367305 660512 720392 1mil2mil1753508 >2mil7923521 13617025 FreeState0500k 500k1mil 1mil2mil >2mil3187113 Gauteng0500k376543 149365 6970 500k1mil 1mil2mil >2mil5273630 7675220 KwaZuluNatal0500k991086 372284 222732 63800 500k1mil1468721 1mil2mil1091082 >2mil2849913 Limpopo0500k480 11333 500k1mil 839731 1mil2mil1772353 >2mil Mpumalanga0500k322034 500k1mil 886010 1mil2mil >2mil7809952 NorthWest0500k 5082 143380 500k1mil 1mil2mil 1037489 >2mil NorthernCape0500k413907 500k1mil581553 1mil2mil >2mil WesternCape0500k1260236 61258 116515 1222421 500k1mil1264422 872797 1253845 1mil2mil6800317 3193495 >2mil19556087 8754411 51070007 Total0500kR5740258 R572565 R149365 R339247 R1447904 R0500k1milR6682001 R1758807 R0 R660512 R2813967 R01mil2milR11417260 R0 R1037489 R0 R3193495 R0>2milR46600217 R8754411 R0 R0 R72362252 R0R163529750NedbankGroupTransformationReport2011–FinalDraft.48

BlackSMEFinancingSMEsplayacriticalroleinjobcreation,incomegenerationandtheeconomicgrowthofthecountry.NedbankisawareofthechallengesthatrestrictthegrowthanddevelopmentofSMEs.Asabankwearecommittedtocreatinganenablingenvironmentthatprovidesopportunityforbusinessestobecomesustainable,jobcreatingenterprisesinthecountry.Nedbank’ssupporttoSMEsextendstolocallybasedteamssituatedinmorethan70regionalofficesacrossthecountry.SMEshaveaccesstoadedicatedskilledbanker,whoissupportedbyateamofspecialists.Solutionsarecustomisedfromasuiteofproductsandservicetomeettheindividualbusinessneed.ThisisfurtheraugmentedwithacomprehensiveEnterpriseDevelopmentproposition.Thepropositionoffersenterprisesandentrepreneurseasieraccesstofinanceunderpinnedbytraining,mentorship,specialistadvisoryservicesandcapacitybuilding.3304entrepreneursreceivedassistanceintheformoftraining,mentorship,fundingorparticipationinincubators.Thesewereall100%blackownedbusinesses,locatedinKZN,FreeState,Mpumalanga,Gauteng,WesternandNorthernCape.NedbankBusinessBankingimplementedvariousinitiativessupportingSMEdevelopment.Thisincludedthefollowing:GovernmentparticipationNedbankBusinessBankingfacilitatedvariousinitiativeswithvariousMunicipalitiesandProvincialGovernment.Government’seconomicdevelopmentplansarehamperedbylegaciesofskillsshortages,pooreducationandunemployment.Afterextensiveengagement,initiativeswereselectedforthepotentialtodevelopsustainableSMEsintoprofitablebusinesses.Theseinterventionswerebasedonthecommonobjectivesofsupportingentrepreneursandcreatingsustainablejobs.Itincludedtheprovisionoftrainingwithindepthcoachingandmentoring.Otherinitiativesentailedcapacitybuildingforpotentialandexistingsuppliers;andbusinessskillstrainingforemergingentrepreneurs.SMEIncubatorsNedbanksupportsandhavearrangementswithvariousSMEincubatorprogrammesthatfocusonempoweringbusinessestobecomesustainable,jobcreatingenterprises.NedbankBusinessBankingpartneredacorporateinanEntrepreneurialTrainingandDevelopmentInitiativein2010.Theprogrammefocusesoncreatingsustainableenterprisesbyprovidingrelevantentrepreneurialknowledge,skillsandmentorship.NedbankprovidedgrantfundingaswellasFinancialManagementtraining.Additionalnonrecoverablefundingwasprovidedfortheprogrammefor2011.CapacitybuildingandmentorshipVariousclientsreceivedmentorshiptoaddressspecificskillsgapandtransferofacumeninparticularfacetsofthebusiness.Thisincluded:specialistsectorexpertise,corporategovernance,marketingandstrategicplanningtogrowandexpandthebusiness.Workshops,seminarsandnetworkingeventsAspartofNedbankBusinessBanking’songoingsupport,businessseminarswerehostedforSMEsacrossvariousindustries.Seminarsarestructuredaroundissuesthatarerelevanttotheentrepreneur.SMEswereexposedtotalksonrelevanttopicsandhadopportunitytointeractwithkeyindustryplayers.Entrepreneursalsobenefittedfromnetworkingopportunitiesandcouldsourceandconnectwithpotentialbuyersandsuppliers.NedbankGroupTransformationReport2011–FinalDraft.49

BlackSMEprovincialtableanalysis:Valueofloansoriginatedasof1January2009to31December2011Province LoanSize Turnover05m 5m 10m 10m 15m 15m 20m >20m UnknownEasternCape 0500k R21416321 R1819080 R1798223 R1749214 R21416321500k1mil R21665134 R8384491 R2423322 R3308568 R216651341mil2mil R36281273 R2813128 R11489580 R5309683 R19169566 R36281273>2mil R2912442 R257104 R893790 R20388 R1517392 R2912442FreeState 0500k R3115746 R902151 R103649 R3115746500k1mil R7097371 R70973711mil2mil R173949661 R526642 R5446821 R28638132 R173949661>2mil R50965318 R2760870 R5051258 R4738017 R7752279 R50965318Gauteng 0500k R54989741 R17309678 R13552152 R6256159 R10973224 R54989741500k1mil R72268591 R21818952 R6613817 R17323514 R23289734 R722685911mil2mil R593466058 R120356961 R114018645 R24681770 R200686230 R593466058>2mil R53344901 R6888837 R1269830 R1976252 R3484612 R53344901KwaZuluNatal 0500k R62496163 R10012686 R3850804 R6404968 R8720943 R62496163500k1mil R73837857 R41137272 R15392275 R10062894 R16326950 R738378571mil2mil R570114918 R83059115 R43427663 R104279031 R159683371 R570114918>2mil R21416321 R1819080 R1798223 R1749214 R21416321Limpopo 0500k R12134431 R1335314 R1257933 R196556 R544620 R12134431500k1mil R10571235 R4667658 R762960 R1213846 R608585 R105712351mil2mil R11035085 R9932915 R1335596 R11035085>2mil R89841924 R25191356 R16099652 R3126793 R32529919 R89841924Mpumalanga 0500k R13045343 R376501 R441306 R663431 R642845 R13045343500k1mil R12944321 R580988 R1461800 R1794238 R730051 R129443211mil2mil R19631823 R2838383 R1718385 R1754388 R1050848 R19631823>2mil R64329159 R5012658 R8902129 R31176982 R9861334 R64329159NorthWest 0500k R2297954 R40189 R242198 R130000 R2297954500k1mil R2445171 R489965 R800768 R400000 R2413808 R24451711mil2mil R2032021 R400000 R2032021>2mil R10996271 R2352269 R10996271NorthernCape 0500k R1688682 R56660 R18239 R191668 R2535 R1688682500k1mil R1447004 R962380 R14470041mil2mil R247765 R1014585 >2mil R2105333 R12888647 R2105333WesternCape 0500k R25314210 R3343518 R621535 R1784158 R1688928 R25314210500k1mil R24350957 R5934712 R1870578 R2491911 R3213060 R243509571mil2mil R51332304 R5894422 R3137161 R1955551 R10073380 R51332304>2mil R179082887 R12754995 R14798270 R23833163 R31660300 R179082887Other 0500k R4443898 R147348 R324508 R179713 R4443898500k1mil R1201231 R12012311mil2mil R1066604 R1066604>2mil R2214212 R2214212Total 0500k R187840582 R17231758 R9970775 R10099651 R16017694 R187840582500k1mil R194977891 R40814767 R25961816 R19613986 R26659671 R1949778911mil2mil R259966791 R89854201 R30620556 R31096347 R55064065 R259966791>2mil R1722381696 R251540482 R209262581 R197854243 R495117498 R1722381696R3891947051NedbankGroupTransformationReport2011–FinalDraft.50

AffordableHousing–MortgagesTheenvironmentformortgagelendingintheaffordablehousingmarketcontinuedtobetoughin2011.Althoughdemandforcreditremainedrelativelystrong,thecontinuedrestrictivelendingpoliciesinresponsetotheongoingglobaleconomiccrisisledtorelativelyhighdeclinerates.This prudent policy has resulted in only good risk, well priced loans being written although with the result thatmarketsharehassuffered.ThevalueofloansoriginatedfromJanuary2011toDecember2011declinedby31%whencomparedtothesameperiodin2010.Poorcredithistoryandaffordabilitycontinuetobethebiggesthurdlesforclientapprovals.ThecostofanentrylevelhouseisintheregionofR300000,whichrequiresamonthlyincomeofaroundR10300toqualifyfora20yearmortgage.InthiscasethemonthlyhomeloaninstalmentwouldbeR3100amonth.Therearethesignsthatthesupplyofnewhousingmaybeimproving.Thisisdemonstratedbythe13.9%increaseinhousesbuiltthatarelessthan80m2,agoodproxyfortheaffordablehousingactivity,whencomparingSeptember2011yeartodatetothesameperiodfor2010.Fortunatelyclientscontinuetobeassistedbythelowinterestrateenvironmentandthenumberofclientsinarrearsreducedfurtherin2011.Theexpectationoflimitedinterestrateincreasesin2012maynegativelyimpactonthispositive trend and may also dampen demand. High unemployment levels continued to have an impact on theAffordableHousingbusiness,bothintermsofdefaultsandintermsofimpactedcreditrecordsfornewapplicants.Despite the significant efforts being made to increase the levels of mortgage lending for affordable housing weexpectthedifficulttradingconditionstocontinueinto2012.DevelopmentFinanceNedbankacknowledgesthegrowingneedforfocused,specialisedfundingofnewaffordablehousingdevelopmentstoincreaseaccesstohousingforthebroadsegmentofSouthAfricanswhoareinthelowerincomesegments.Inthisregard the Affordable Housing division within the Property Finance Division has leveraged on the momentumachieved in this business during 2009/10 to provide further funding of more than R297M during 2011 for newaffordablehousingdevelopmentsinthemajormetrosacrossSouthAfrica.InthisfundingapproachwehavealsoacknowledgedthefactthatincomeearnersbelowR12,000permonthareunable to afford entry level affordable housing. Taking this into regard Nedbank has supported by way of aresponsivefundingapproachitsaffordablehousingdeveloperclients,whichenabledthemtoproducerentalstockthatcaterforthoseinthislowerincomesector.NedbankGroupTransformationReport2011–FinalDraft.51

9.EmpowermentFinancingConsistingoftwoelements,TargetedInvestmentsandBEETransactionFinance,thisisthesecondpillarofouradditionalfocusareasaspartoftotaltransformationofourbusiness.Table9:EmpowermentFinancingCategory¹2011verified2010verified2009verifiedTargetedInvestments(Rm) R10,590 R5,681 R2,319TransformationalInfrastructure R2,781 R1,906 R559AffordableHousing R3,729 R2,033 R982BlackAgricultureloans R164 R70 R20BlackSMEFinancing R3,916 R1,672 R759BEETransactionFinancing(Rm) R7,349 R6,570 R1,362Note:¹2011measurementscompliestorecommendedstandardsdevelopedaspartoftheFSCodeTransformationalInfrastructureGautengOnline(“GOL”)istheimplementationofanetworksolution,providingInternetServiceProtocol(ISP)to2,200schoolsinGauteng.Eachschoolwillhave25learners.Itisafiveyearcontractthatincludestheimplementationoftheschoolcomputerlabs,theITinfrastructureandmobileeducationfacilities.TheaimofGOListoempowerlearnersandeducatorsintermsoftheGautengDepartmentofEducation’sguidelinesoneLearning.TheseguidelinesareincludedintheWhitePaperoneEducation.CityofJohannesburgMetropolitanMunicipalityAlllongtermfundingfortheCityisgenerallyforinfrastructurepurposesaspertheMFMA.Theloansweremainlyrequiredforthesoccerworldcup(i.e.completion/paymentsrelatedtostadiums–SoccerCityandEllisPark),waterandsanitationinfrastructure,electricityandroad/transportinfrastructureliketheBRTetc.Allofthefollowingloansqualify:R570mil–purchaseofbonds(matures2015)R1bil–longtermloanR315mil–longtermloanuMhlathuzeR188m,10yeartermThisloanwasutilisedsolelyforcapitalprojectsaspartoftheongoingIntegratedDevelopmentPlantomeettheinfrastructureservicedeliveryprogrammefortheMunicipality.AspertheIDP,thegeographicalbreakdownofspendwas24%oneconomicdevelopmentnodes(RichardsBayIndustrialDevelopmentZone),59%inpoorlyservicedsubregionalanddistrictnodes(basicallyruralandsemirural)and17%inthedevelopedareasofRichardsBayandEmpangeni.AfurtherbreakdownofthisspendfromtheIDPfor2010showsthat10%isintendedforstormwaterandroadsinfrastructure,25.5%forwaterinfrastructure,25%forelectricityinfrastructure,11%forsewageinfrastructure,19.5%foranewciviccentre,2.5%formunicipalvehiclesandassociatedequipmenttoensureserviceprovision.Theremaining6.5%iscategorizedunder“other”butincludesitemslikerefurbishmentofhostels,anewfirestation,cemeteryextensionandSMMEdevelopment.eThekwiniR500m,5yearterm(KwaZuluNatal)NedbankGroupTransformationReport2011–FinalDraft.52

NedbankGroupTransformationReport2011–FinalDraft.53Thisloan,asstatedintheRFPwasutilisedsolelyfortheacquisitionofmotorvehicles,plantandequipmentaspartoftheongoingIntegratedDevelopmentPlantomeettheinfrastructureservicedeliveryprogrammefortheMunicipality.Thetypesofvehiclesandequipmenttobeprocuredincludesitemslikeemergencyresponsevehicles,firefightingvehiclesandequipment,policevehiclesincludingsecurityvehicles,mobilehomesandmobilealcoholtestingequipment,publictransportvehicleslikebuses,roadmaintenancevehiclesandequipment(e.g.steamrollersandtarringmachinery),electricityvehiclesandequipment(eg.highreachtrucksandcranes)andcityfleet.eThekwiniR500m,7yearterm(KwaZuluNatal)ThisloanwasutilisedsolelyforcapitalprojectsaspartoftheongoingIntegratedDevelopmentPlantomeettheinfrastructureservicedeliveryprogrammefortheMunicipality.Intermsofabreakdownofthisthespendoncapitalprojects,pleaseseebelow:Housingprovision20.8%electricityinfrastructure16.2%waterinfrastructure15.3%sanitation10.1%wasteremoval2%general(includeseconomicdevelopment,ratesandgeneralandtourismdevelopment)35.4%CityofTshwaneisoneofthesixMetropolitanMegacityMunicipalities.(Gauteng)Itseconomyisbasedonfourmajorsectors,Government(24%),Finance(23%),Transport(19%)aswellasManufacturing&Trade(28%).TheyissuedaRequestforProposal(RFP)fortheprovisionofaR1.081bnlongtermfundingfortheirapproved2009/10CapitalExpenditureprogramme.NedbanksubmittedaproposalofR720mtobepaidover10years,whichwaswithdrawnintwotranchesofR360meach(MayandJune2010).CoThashoweverconfirmedthattheyusedtheirownfundsfortheirCapexprogrammes(i.e.nottheR720m),sothesefundswillbeusedtosupplementtheircashflows.R3.7bnRefinancingofBakwenaTollRoadProject(Mpumalanga)NedbankCapitalannouncedthefinancialclosureontherefinancingoftheBakwenaN1/N4TollRoadProjecttothevalueofR3.7billion,resultinginthelargestrefinancingofaninfrastructureprojectyetcompletedinSouthAfrica.NedbankCapitalwastheMandatedLeadArrangerofallfacilitiesintherefinancingandisthelargestsinglelendertotheproject.NedbankCapitalTriumphsatAfricainvestorInfrastructureAwardsNedbankCapitalwaspresentedwithawardsfor"TransportDealoftheYear"andthe“ICT/TelecomsDealoftheYear”foritsroleasMandatedLeadArrangerintheR3.7bnrefinancingoftheBakwenaTollRoadProjectandtheR4.4bnNeotelexpansionfinancingrespectivelyandwastheonlyrecipientoftwoawardsattheAfricainvestorInfrastructureAwards.TheBakwenatransactionisthelargestrefinancingofaninfrastructureprojectyetcompletedinSouthAfricaandNedbankCapitalisthelargestsinglelendertotheprojectaswellashavingexecutedamajorCPIhedgeaspartofthetransaction,againdemonstratingthebenefitsofcollaborativebehaviour.TheNeoteltransactionisthelargestprojectfinancingyetcompletedinSouthAfricaofagreenfieldstelecommunicationsproject.NedbankCapitalisalsoamajorlender,isthecorporatebankerandhasprovided

significanthedgingfacilitiestoNeotel,whichwillallowthetelecommunicationsgianttoexpanditsnextgenerationnetwork,creatingafootprintacrossSouthAfrica.NedbankCapitalconcludesNeotelrestructureNedbankCapitalannouncedtheconclusionofarestructuringdealforNeotelwithfinancialclosebeingcompleted.Theprocesstookjustoverninemonthstocompletewithalargeamountofworkrequiredtostructureandnegotiate.TheconsequenceofthisistoplaceNeotelonasoundfinancialfootingwhichisabigstepinpositioningthebusinesstoachieveitsobjectiveofplayingameaningfulroleintheSouthAfricantelecommunicationslandscapeinthecomingyears.TheprocessincludedtherecapitalisationofNeotelbyTataCommunicationsLimitedandtherestructuringofthebankdebt.BEETransactionFinancingNedbankProvidesR1.5bnforRichardsBayMineralsBEETransaction&AdvisesBEEInvestorsNedbankCapitalandNedbankCorporateannouncedthesuccessfulconclusionoftheRichardsBayMineralsBEETransaction.NedbankCapital’sCorporateFinanceteamactedasexclusiveinvestmentbankandcorporateadvisertoBEEHoldco,whichacquireda24%stakeinRichardsBayMineralsfromBHPBillitonandRioTinto.BEEHoldcoistheBlackEconomicEmpowermententityhousingtheinterestsoftheImbewuConsortium,MatasisInvestmentHoldings,GadeInvestments,SambuloInvestments,SouthAfricanWomanAlliance,UngoyeInvestments,BingelelaInvestmentsConsortiumandtheSokhulu,Dube,MbonambiandMkhwanazihostcommunities.ThetransactionisoneofKZN’slargestbroadbasedBEEtransactionstodate.Nedbank’sadvisoryroleincluded,interalia,advisingBEEHoldcoonthetransactionstructureandthevaluationofRichardsBayMinerals.NedbankCapitalMining&ResourcesandNedbankCorporateBankingweretogetherappointedasJointMandatedLeadArrangersandUnderwritersfor50%oftheR3billionthirdpartyfundingfortheR4.5billionBEEtransaction.NedbankProvidesR1.92bnRefinancingforSishenIronOreNedbankCapitalandNedbankCorporateannouncedthefinancialclosureontherefinancingofarevolvingcreditfacilityforSishenIronOreCompany(Pty)Ltd(“SIOC”),asubsidiaryofKumbaIronOreLimited.TheR1.42bnrevolvingcreditfacilityhasbeenrolledoverintoarefinancingandanadditionalR500mhasbeenadvancedresultinginatotalfundinginthisinstanceofR1.92bn.ThisfacilityhasbeensharedbetweenNedbankCapitalandNedbankCorporateona50:50basis.NedbankCapitalsuccessfullyconcludesthemergerofKagisoTrustInvestmentsandTisoGroupNedbankCapitalannounceditsroleassoleintegratedinvestmentbankinthemergeroftwoofSouthAfrica’smostprominentblackownedinvestmentcompanies,KagisoTrustInvestmentsandTisoGroup.Themergedcompany,calledKagisoTisoHoldings(“KTH”),isaleadingblackownedSouthAfricaninvestmentcompanyofscaleandwillbeledbyastrong,proven,predominantlyblackmanagementteamwithadepthofskillsandexperience,boastingastrongbrandandacomplementaryanddiversebaseofqualityassetswithagrossvalueinexcessofR13billion.KTH’senhancedbalancesheetstrength,portfoliodiversificationandstrongercashflowsprofilewillcreatemoreopportunitiesforgrowth.NedbankGroupTransformationReport2011–FinalDraft.54

AspartofNedbankCapital’sstrategytoofferintegratedbankingsolutionstoourclientsandfocusondevelopingexistingclientrelationships,CorporateFinancewereawardedthemandatetoactasthesoleinvestmentbankinthemerger.TheAcquisitionandLeveragedFinanceTeamthroughtheirexistingrelationshipasfundertotheTisoGroupwereselectedasLeadcoordinatorandfunderforamultibanktransactionprovidingR490millionofpreferencesharesfundingtoanewlycreatedEmployeeStaffTrustwhichinvestedinthemergedentity.Inaddition,theteamrefinancedanexistingR271millionpreferencesharefacilityprovidedtoTisoGroupwhichwastransferredintothenewmergedentityandtheyarenowintheprocessofrestructuringtheexistingR240millionpreferencesharefacilityofTisoInvestmentHoldings.NedbankGroupTransformationReport2011–FinalDraft.55