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2016 Integrated report
This report tells the story of how Nedbank Group creates, delivers and ensures value creation for its stakeholders.
About our Integrated Report
Nedbank Group is committed to the principles of Integrated Reporting. Our thinking and our
approach to long-term value creation are aligned with these principles, which allow us to tell a
clear and comprehensive story about how we deliver on our purpose to use our financial expertise to
do good for individuals, families, businesses and society.
approach to long-term value creation are aligned with these principles, which allow us to tell a
clear and comprehensive story about how we deliver on our purpose to use our financial expertise to
do good for individuals, families, businesses and society.
Scope and boundary of reporting
REPORTING PERIOD The Nedbank Group Integrated Report is produced and published annually. The 2016 report covers the period 1 January to 31 December 2016 and builds on the 2015 report. Any material events after this date and up to the board approval date on 17 March 2017 have also been included. The report also contains Nedbank Group’s outlook, targets and objectives for the short (2017) and medium to long term (2018 to 2020 and beyond). Our integrated thinking is reflected in our targets and key performance indicators that cover financial and non-financial performance as well as strategy, risks and how we deliver value to stakeholders.
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OPERATING BUSINESSES The report covers the primary activities of the group, our business clusters, key support areas and subsidiaries in our African and international operations. Detailed information on investments in which the group holds only a minority stake is not included.
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FINANCIAL AND NON-FINANCIAL REPORTING The report extends beyond financial reporting and includes non-financial performance, opportunities, risks and outcomes attributable to or associated with our key stakeholders, which have a significant influence on our ability to create value.
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TARGETED READERS This is our primary report to stakeholders and is intended to address the information requirements of long-term investors (our equity and preference shareholders, bondholders and prospective investors). We also present information relevant to the way we create value for other keystakeholders, including our staff, clients, regulators and communities. |
BENCHMARKING We benchmark our performance against our peers based on publically available information. While consistent benchmarks are not always readily available, we have included these where relevant so that readers can gauge Nedbank Group’srelative performance. |
About Nedbank Group
Provides a succinct overview of the group, our positioning in the market, our broad, important role as a bank and our business model.
Nedbank Group is a diversified financial services provider offering a wide range of wholesale and retail banking services as well as insurance, asset management and wealth management solutions. Nedbank operates under a federal operating model, delivering our products and services through four main business clusters, providing our clients access to financial services in 39 countries across Africa. Our purpose is to use our financial expertise to do good for individuals, families, businesses and society.We have a vision-led, values-driven philosophy to leading and managing our business, because how we achieve our vision is as important to us as what we achieve. With a view to being most admired by our stakeholders, our Deep Green aspirations and targets strongly influence our planning up to 2020 and for the long term. To remain successful in banking over the long term the socioeconomic context in which we operate, matters enormously. Our recognition of the systematic interdependencies between economic success, societal wellbeing and environmental health led us to develop a set of eight Long-term Goals for SA to achieve by 2030. The Long-term Goals define the areas where we can best grow our bank, as well as areas where we have to tilt away from in order to contribute to a thriving society. These are predominantly about how we deploy our financial capital. In response to these, we developed our Fair Share 2030 strategy.
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Links: Read more about Nedbank Group for the reporting period in the integrated report or the most up-to-date information about the group, see: Our purpose, vision and values, our Long-term Goals and Fair Share 2030 |
Creating value in a sustainable manner through our strategy
Describes the context in which we operate and how it is likely to change over the next few years, the needs and expectations of our stakeholders and the resulting material matters that add or detract value. These, along with resultant opportunities and risks, inform our strategy for the next five years.
'The economic and geopolitical environment deteriorated in 2016 and the outlook for 2017, although improving, remains uncertain. While much of the external environment is not in our control, operationally we have remained focused on those issues we can control. Nedbank Group's managed operations produced excellent headline earnings growth of 16,2%, offset by a disappointing performance from our strategic investment in Ecobank Transnational Incorporated (ETI), which diluted the overall growth in headline earnings to 5,9%. We have also strengthened our balance sheet, with our tier 1 capital adequacy ratio improving to 13,0% from 12,0% in 2015, our liquidity coverage ratio at 109,3%, above the South African Reserve Bank requirement of 70% for 2016, and our net stable funding ratio above 100% on a pro forma basis.' - Mike Brown, Chief Executive
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Delivering value
Describes how value was created in 2016 through our financial performance, primarily for our investors, but also for all our stakeholders. We also show how remuneration correlated with all our stakeholders. We also show how remuneration correlated with our performance, and provide an outlook for 2017 and the medium to long term.
'Nedbank Group delivered a solid set of results underpinned by positive momentum across all our managed operations. We further strengthened our balance sheet, reduced risk exposure and grew transactional revenue, while extracting operational efficiencies.' - Raisibe Morathi, Chief Financial Officer
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Links: Reflections from our Chief Financial Officer Our summarised five-year track record Exceeding the expectations of our clients Delivering consistently to our shareholders Ensuring sustainable banking with our regulators Contributing to a thriving society while respecting environmental limits |
Ensuring and protecting value
Reflects on how the group is governed, including key deliberations of our board and board committees.
'It gives me great satisfaction to share the Nedbank story of value creation with all our stakeholders. The year 2016 has been one in which companies around the globe operated in a growth environment that is volatile, uncertain and constrained, and it has been no different for us at Nedbank. I am therefore tremendously proud that this report demonstrates the value that we create by generating sustainable financial returns while playing a meaningful role in society through active corporate citizenship. Value is created through sound strategy and execution, robust risk management and the work of both a skilled leadership team and the committed people who work for Nedbank.' - Vassi Naidoo, non-executive Chairman
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Links: Committed to good governance (for further reading see the full supplementary Governance and Ethics report) Established and admired leadership teams Reports from our directors, Company Secretary and auditors Risk management and governance Reporting back on remuneration (for further reading see the full supplementary Remuneration report)
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