NEDBANK CAPITAl - Nedbank Group Limited

Asset and liability managementAsset and liability management addresses two of the 17 keyrisk types in the group’s Enterprisewide Risk ManagementFramework, namely liquidity risk and market risk in the bankingbook, which in turn includes interest rate risk in the bankingbook and foreign currency translation risk on foreign-basedcapital, investments, loans and/or borrowings.Liquidity riskThere are two types of liquidity risk, namely funding liquidityrisk and market liquidity risk. Funding liquidity risk is the risk13%3%5%Sources of quick liquidity19%that Nedbank Group is unable to meet its payment obligationsas they fall due. These payment obligations could emanatefrom depositor withdrawals, the inability to roll over maturingdebt or contractual commitments to lend. Market liquidity riskis the risk that the group will be unable to sell assets, withoutincurring an unacceptable loss, in order to generate cashrequired to meet payment obligations under a stress liquidityevent.Liquidity risk management is a vital risk management functionin all entities across all jurisdictions and currencies, and is a keyfocus of the Nedbank Group.Other bank paper and unutilised bankcredit linesMarketable securitiesGROUP REPORTS25%16%Price-sensitive overnight loansSurplus liquid assets, notes and coinsPrudential liquid assetsCash reservesCorporate bonds and listed equities9%10%OtherOPERATIONAL REVIEWSGOVERNANCEOVERVIEW169NEDBANK GROUP ANNUAL REPORT 2009