NEDBANK CAPITAl - Nedbank Group Limited

CHIEF FINANCIAL OFFICER’S REPORT ... continuedSix-year reviewNAV and ROEcents12 00010 00018,9%22,1%24,8%21,4%20,1%%2520Net asset value per shareTangible NAV8 0006 0004 00014,3%11,0%15,5%18,6%17,7%11,5%13,0%1510ROEROE, excluding goodwill2 0004 6543 7215 5974 6806 3635 4277 5136 5438 5227 1799 1007 398502004 2005 2006 2007 2008 20090In summary, if one reflects on a six-year history of ROE andNAV, it is evident that, while the challenging market conditionshave impacted ROEs in recent years, the underlying NAV ofthe group has continued a steady upward trend, albeit lately atslower growth rates.While ROE metrics peaked in 2007, ahead of the challengingeconomic times, before falling again the group sustained acompound average growth in NAV of over 14%.OutlookThe economic environment remains fragile, presenting forecastrisk.Nedbank Group’s performance in 2010 is likely to reflect thefollowing:• Advances growth in the mid single digits.• Pressure on interest margins remaining as a result of acontinued negative endowment effect and anticipated to becompressed by a further 10 to 20 basis points.• Lower double-digit expense growth, the increase beingimpacted by the consolidation of the Bancassurance andWealth joint-venture acquisitions.• A further strengthening of capital adequacy ratios and focuson funding and liquidity.• A focus on extracting value from acquisitions madein 2009.AcknowledgementsI would like to thank my predecessor, Mike Brown, andGraham Dempster, the Chief Operating Officer, for theirsupport and guidance following my appointment duringthe financial year. The finance teams within Nedbank haveagain shown outstanding commitment to enhancing thestandard of financial reporting and producing timeous, qualityfinancial information. The investment community locally andinternationally is a critical stakeholder of Nedbank Group andwe acknowledge the support and interaction during this mostdifficult period in the banking sector.• Continued improvement of the group credit loss ratio, butremaining above our target range.• Mid double-digit NIR growth, the increase being impacted bythe consolidation of the Bancassurance and Wealth jointventureacquisitions for the full period in 2010, comparedwith seven months in 2009.Raisibe MorathiChief Financial Officer24 February 201096NEDBANK GROUP ANNUAL REPORT 2009