2010 Annual report - Nedbank Group Limited

More documents

Recommendations

Info

ECONOMIC REVIEW(continued)OVERVIEW 2010The world economy was intricate in 2010with fluctuating market confidence,shifting commodity prices, imbalancedeconomic recovery, diverse economic policies,and severe currency battles. Despite a difficultrecovery, the world economy still enjoyeda growth rate beyond expectations. TheInternational Monetary Fund (IMF) estimated thegrowth rate to be 4.8% in 2010 with developedcountries achieving growth of 2.7%, and emergingeconomies and developing economies notching arate of 7.1%.Economic recovery continued to strengthen duringthe first half of 2010, but global financial stabilitysuffered a major setback due to the turmoilin sovereign debt markets in the second quarterof the year. The extent of economic recoverydiffers significantly across regions, with Asia inthe lead. The United States and Japan experienceda noticeable slowdown during the second quarterof 2010, while growth accelerated in Europe andremained strong in emerging and developingeconomies.Europe’s debt crisis indicates that global economicdevelopment has entered a period of fluctuation.Financial conditions have begun to normalise butinstitutions and markets are still fragile. In general,volatility in financial, currency, and commoditymarkets remained elevated.Nedbank (Swaziland) Limited Annual Report 20108
Local DevelopmentsThere was a challenge in 2010 to restore fiscalsustainability following a decline in customsreceipts from the Southern African CustomsUnion (SACU), upon which the government hashistorically relied heavily on for funding publicexpenditure. This required the addressing the largewage bill in the Government sector especially in linewith the drop in SACU revenue. Government alsofaces the challenge of restoring competitiveness inthe manufacturing sector, which is the mainstay ofthe economy. Indications are that there are somenew initiatives in the pipeline and their coming online will be of benefit to the GDP, although littleprogress is expected on this front.Economic policy-making will remain constrainedby structural weaknesses, however, the country’sproximity to ports and its membership of SACUwill continue to boost its attractiveness to foreigninvestors. Swaziland is expected to remain a memberof the Common Monetary Area (which also comprisesLesotho, Namibia and South Africa) throughout theforecast period, and the lilangeni will remain peggedat parity with the South African rand.The budget position is expected to deterioratesignificantly over the forecast period. Receiptsfrom SACU, which have accounted for a significantshare of Swaziland’s revenue - more than 60%,in fiscal year April 2008 to March 2009 - areexpected to fall by 50% in 2010/11, leading toa 22% decline in total government revenue. Thedecline in SACU receipts has been driven by acombination of weaker trade flows as a resultof the global economic crisis and a reduction inSACU’s common external tariffs. Government’sposition has also been accelerated by the once-offE400m (US$53m) repayment that Swaziland owedSACU as a result of excess payments received inprevious years.Forecasts are that in 2011/12 the deficit willfall marginally to 8% of GDP, as SACU receiptsincrease slightly in line with a gradual recovery ininternational trade and following the repayment ofSwaziland’s debt to SACU.Government recently raised a total of E500mthrough bond issues in the domestic market andthere appears to be some additional potential toraise funds domestically.Swaziland’s monetary policy continues to bedetermined by developments in South Africa. In2010, the Central Bank of Swaziland (CBS) cut itsrepo (repurchase) rate by a total of 150 basis pointsto 5.5%. This move also reflected a slightly sharperthan-expecteddecline in inflation over the first halfof the year and a stronger Lilangeni (E).The lilangeni strengthened by 8% year on yearto approximately E7.3:US$1 in August (fromE7.5:US$1 in July). After slipping in May, due toan increase in perceived emerging-market riskassociated with the Euro zone debt crisis. Thelilangeni has subsequently rallied, underpinned byan improvement in global sentiment and stronginvestor inflows. The lilangeni is expected toresume a trend of gradual depreciation owing torelatively high inflation and the current-accountdeficit. In line with these trends, the lilangeni9Nedbank (Swaziland) Limited Annual Report 2010
Page 2 and 3: Designed by Sibane Icons - Tel: +26
Page 4 and 5: VISION, MISSION AND VALUESVISIONBui
Page 6 and 7: FINANCIAL HIGHLIGHTSKey RatiosTotal
Page 8 and 9: PROFILE AND GROUP STRUCTURE (contin
Page 12: ECONOMIC REVIEW(continued)IN SOUTH
Page 15 and 16: INTRODUCTIONThe year 2010 ushered i
Page 18 and 19: BOARD OF DIRECTORSas at 31 December
Page 20 and 21: BOARD OF DIRECTORSas at 31 December
Page 22 and 23: MANAGING DIRECTOR’S (continued) R
Page 24 and 25: MANAGING DIRECTOR’S REPORT(contin
Page 26 and 27: Nedbank (Swaziland) Limited Strateg
Page 28: Nedbank (Swaziland) Limited Strateg
Page 31 and 32: The Bank continued its drive to gro
Page 33 and 34: Statement of Comprehensive IncomeNe
Page 35 and 36: NEDBANK (SWAZILAND) LIMITED IS WELL
Page 37 and 38: 2010 saw significant growth of 16%
Page 39 and 40: ankers are the interface between th
Page 41 and 42: complex products and services. This
Page 43 and 44: asis points. The asset sensitive po
Page 46 and 47: OPERATIONAL REVIEWCREDIT RISK MANAG
Page 54 and 55: OPERATIONAL REVIEWSUPPORT AREASHUMA
Page 56 and 57: OPERATIONAL REVIEWHUMAN RESOURCES(c
Page 58 and 59: OPERATIONAL REVIEWTECHNOLOGY & SUPP
Page 60 and 61:
OPERATIONAL REVIEWCENTRAL OPERATION
Page 62 and 63:
OPERATIONAL REVIEWINTERNAL AUDITSUP
Page 64 and 65:
OPERATIONAL REVIEW SUPPORT AREASGOV
Page 66 and 67:
Page 68 and 69:
Page 70 and 71:
Page 72 and 73:
Page 74 and 75:
OPERATIONAL REVIEW SUPPORT AREASCOR
Page 76 and 77:
OPERATIONAL REVIEWSUPPORT AREASCORP
Page 78 and 79:
Page 80 and 81:
Page 82 and 83:
ANNUAL FINANCIAL STATEMENTSfor the
Page 84 and 85:
INDEPENDENT AUDITOR’S REPORTTo th
Page 86 and 87:
REPORT OF THE DIRECTORSfor the year
Page 88 and 89:
REPORT OF THE DIRECTORSfor the year
Page 90 and 91:
STATEMENT OF COMPREHENSIVE INCOMEfo
Page 92 and 93:
STATEMENT OF FINANCIAL POSITIONas a
Page 94 and 95:
NOTES TO THE FINANCIAL STATEMENTSfo
Page 96 and 97:
Page 98 and 99:
Page 100 and 101:
Page 102 and 103:
Page 104 and 105:
Page 106 and 107:
Page 108 and 109:
Page 110 and 111:
Page 112 and 113:
Page 114 and 115:
Page 116 and 117:
Page 118 and 119:
Page 120 and 121:
Page 122 and 123:
Page 124 and 125:
Page 126 and 127:
Page 128 and 129:
Page 130 and 131:
Page 132 and 133:
Page 134 and 135:
Page 136 and 137:
Page 138 and 139:
Page 140 and 141:
Page 142 and 143:
Page 144 and 145:
Page 146 and 147:
Page 148 and 149:
Page 150 and 151:
Page 152 and 153:
ANNUAL GENERAL MEETINGNOTICE TO SHA
Page 154 and 155:
DEFINITIONSDEFERRED TAXATION ASSETS
Page 156 and 157:
DEFINITIONSKING III (THE CODE)The K
Page 158 and 159:
NOTESNedbank (Swaziland) Limited An
Page 160:
www.nedbank.co.sz
show all

2010 Annual report - Nedbank Group Limited

Create successful ePaper yourself

Delete template?

Save as template?