201302 nedbank group 2012 annual results presentation ......4 improvement across all key performance...

NEDBANK GROUP

for the year ended 31 December 2012

FINANCIAL RESULTS

Strategy & overviewMike Brown

Delivering sustainably to all our stakeholders

3

Challenging external environment – some positive signs emerging

Global economic slowdown continued for most of 2012

‒ Signs of improvement in Q4

In South Africa:

‒ 2012 GDP growth expecting to have slowed to 2,5% (2011: 3,1%)

‒ 50bps reduction in interest rates

‒ Weak credit demand: wholesale pick-up in Q4 & slowing personal loans

‒ Sovereign & bank ratings downgrades

‒ SA Basel III live 1 January 2013

‒ Adoption of the National Development Plan

SA GDP growth (%)(seasonally adjusted annualised Q/Q)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4est.

2010 2011 2012

4

Improvement across all key performance indicators

2012 2011

ROE (excl goodwill) 16,4% 15,3%

Diluted HEPS growth 19,0% 25,4%

Credit loss ratio 1,05% 1,13%

NIR : Expenses 84,4% 81,5%

Efficiency ratio 55,5% 56,6%

Common Equity Tier 1 CARB III

11,6%B II.5

11,4%Basel II.5

10,5%

> target

5

Headline earnings uplift, whilst strengthening the balance sheet & investing in the franchise

42774900

6184

7510

2009 2010 2011 2012

Headline earnings (Rm) Capital levels strengthened‒ Positioned favourably for Basel III

Strong liquidity position‒ Lengthened funding profile

‒ LCR compliant (pro-forma)

‒ Healthy liquid asset buffers

Improving asset quality‒ Increased coverage ratios

‒ Decline in defaulted advances

Continued investment‒ New products, systems, outlets,

ATMs, training & development

Operating within our risk appetite

Headline earnings uplift… …strong balance sheet & investing for growth

21,4%

26,2%

14,6%

6

Building Africa’s most admired bank by delivering sustainably to all stakeholders

STAFF Created 452 additional jobs in SA R352m development spend Positive shift in corporate

culture (world class levels) High staff morale

COMMUNITIES

REGULATORS Strong capital &

liquidity ratios Commitment to responsible

banking practices One of SA’s largest tax

payers: R6,2bn

CLIENTS R144bn new loan

payouts 80 new outlets &

476 ATMs Strong client gains - now

above 6,1m Market-leading innovations NPS at multi-year highs Euromoney’s Best Bank in

SA for 2012

SHAREHOLDERS EP up 63,5% Total shareholder return of 34,3% Dividend of 752c, up 24,3%

Rights to 20% in ETI (Rest of Africa exposure)

More affordable & accessible banking Most transformed JSE Top 50 company Level 2 dti contributor for 4th year R116m spent on SED Africa’s only carbon neutral bank FT Sustainable Bank of the year: Africa & ME

BY OUR:

7

Our strategic focus areas remain important

8

(27)

760

2 091

2 552

2009 2010 2011 2012

(0,2%)

4,6%

10,8%

12,1%

Reposition Nedbank RetailDelivering on our strategic commitments - ahead of plan

Headline earnings (Rm)ROE (%)

2011 restated for enhancements to economic capital allocation methodologies in 2012

9

78,879,6

81,5

84,4>85,0

2009 2010 2011 2012 Medium-to-longterm target

Grow NIRProgress towards our medium-to-long term target of >85%

NIR : Expenses ratio (%)

10

57

(289)

924

1 511

2009 2010 2011 2012

13,4% 13,4%

15,3%

16,4%

Portfolio TiltOptimising returns in a Basel III world

Group economic profit (Rm)ROE (excl goodwill) (%)

11

Rest of AfricaA risk mitigated, capital-efficient, longer-term strategic approach

‘One bank’ experience for clients across 36 countries & >2 000 staffed outlets

Single Rest of Africa division embedded

Rest of Africa division: Headline earnings +35%

Rights to acquire up to 20% equity stake in ETI (Nov ‘13 – Nov ‘14)

Ecobank building the franchise

‒ Good core performance muted by once-off integration costs

‒ All Nedbank businesses exploring joint growth opportunities

Continuously seeking investment opportunities in SADC & East Africa

Financial overview

Raisibe Morathi

Headline earnings uplift, whilst strengthening the balance sheet & investing in the franchise

13

Year ended % change 2012 2011

Headline earnings (Rm) 21,4 7 510 6 184

Economic profit (Rm) 63,5 1 511 924

HEPS (cents) 20,6 1 646 1 365

Diluted HEPS (cents) 19,0 1 595 1 340

Pre-provisioning operating profit (Rm) 13,6 15 580 13 709

ROA (%) 1,13 0,99

ROE (excluding goodwill) (%) 16,4 15,3

ROE (%) 14,8 13,6

Tangible NAV per share (cents) 11,3 10 065 9 044

Common equity Tier 1 capital ratio(1) (%) 11,4 10,5

Dividend per share (cents) 24,3 752 605

Financial highlights

Note 1: Basel II.5

14

13,4% 13,4%15,3%

16,4%

0,76%0,82%

0,99%

1,13%

-0.10%

0.30%

0.70%

1.10%

1.50%

%

%

%

%

%

%

%

2009 2010 2011 2012ROE (excl. goodwill) ROA

17,6 16,3 15,4 14,5

ROE & ROA (%)Leverage (x times)

Leverage

ROE benefitting from ROA uplift

2009 to 2012:

ROA uplift from:

NIM up 14bps

NIR : Expenses up 560bps

CLR down 47bps

ROE impacted by:

ROA uplift

Increased capital holdings

Key drivers: 2009 to 2012

15

Positive trends continued

452477

499527

2009 2010 2011 2012

471492

524551

2009 2010 2011 2012

3,393,36

3,48(1)

3,53

2009 2010 2011 2012

1,521,36

1,13 1,05

2009 2010 2011 2012

78,8 79,681,5

84,4

2009 2010 2011 2012

53,555,7

56,6 55,5

2009 2010 2011 2012

Advances (Rbn): 5,3% CAGR Deposits (Rbn): 5,4% CAGR NIM (%): +14bps

CLR (%): (47bps) NIR : expenses (%): +560bps Efficiency ratio (%): +200bps

Note 1: Restated from 3,46% to exclude “Clients’ indebtedness fro Acceptances” from interest earning banking assets

BOOKLET ONLY SLIDE

16

2009 2010 2011 2012

H1 H2

20,0%

8,3%

24,2%

28,8%25,1%

Headline earnings continue to trend upwards

7 510

18,5%

6 184

4 9004 277

Headline earnings (Rm)

17

6 184

7 510

1 646

132

1 912 1 609

677 78

2011 NII Impairments NIR Expenses Direct tax Other 2012

9,1% (2,5%) 12,4% 8,5% 30,9%

Positive delta 3,9%

Headline earnings growth driven by strong income growth & good cost containment


18

Year ended (Rm) % change 2012 2011

Net interest income 9,1 19 680 18 034

Impairments (2,5) (5 199) (5 331)

Income from lending activities 14,0 14 481 12 703

Non-interest revenue 12,4 17 324 15 412

Total expenses 8,5 (20 528) (18 919)

Indirect taxation 11,1 (561) (505)

Associate income >100 1 -

Headline profit before taxation 23,3 10 717 8 691

Direct taxation 30,9 (2 871) (2 194)

Minorities & preference shares 7,3 (336) (313)

Headline earnings 21,4 7 510 6 184

Attributable earnings 20,8 7 476 6 190

Consolidated statement of comprehensive income

BOOKLET ONLY SLIDE

19

Diversified business portfolio

0%

5%

10%

15%

20%

25%

30%

35%

0 5 10 15 20 25

RO

E (e

xcl g

oodw

ill) (

%)

Allocated economic capital (Rbn)

Capital

Corporate

Relative size of headline earnings

Wealth

BB

Retail

Cost of capital

Change in headline earnings

+10%

+16%+16%

+9%+22%

20

Cluster headline earnings & ROEs

Headline earnings(Rm)

ROE (%)

Year ended %change 2012 2011(1) 2012 2011(1)

Nedbank Capital 16,3 1 428 1 228 25,4 22,6

Nedbank Corporate(2) 15,7 1 817 1 571 22,5 24,5

Nedbank Business Banking 9,0 944 866 21,5 21,3

Nedbank Retail 22,0 2 552 2 091 12,1 10,8

Nedbank Wealth 9,5 716 654 29,6 27,7

Line clusters 16,3 7 457 6 410 17,9 17,1

Centre(2) >100 53 (226)

Group 21,4 7 510 6 184 14,8 13,6

Group (excl goodwill) 16,4 15,3

Note 1: 2011 restated for enhancements to economic capital allocation methodologies in 20122: Restated for transfer of Rest of Africa Division from Nedbank Corporate to Centre

BOOKLET ONLY SLIDE

21

348(1)

353

15

(6)

(3) (1)

2011Asset pricing& mix change

Cost of enhancingliquidity

Impact of ratechange

Other2012

Continued margin gains from asset mix changes

Margin (bps)

Note 1: Restated from 3,46% to exclude “Clients’ indebtedness from Acceptances” from interest earning banking assets

22

% of daily average interest-earning banking assets % Rm

Restated 31 December 2011 3,48(1) 18 034

Growth in banking assets 1 361

Impact of rate changes (0,03) (162)

Endowment on capital (0,01) (70)

Endowment on deposits (0,01) (29)

Prime/Jibar reset risk (0,01) (63)

Asset pricing & mix changes 0,15 834

Cost of enhancing liquidity risk profile (0,06) (330)

Other (0,01) (55)

31 December 2012 3,53 19 680

NII – margin analysis BOOKLET ONLY SLIDE

Note 1: Restated from 3,46% to exclude “Clients’ indebtedness from Acceptances” from interest earning banking assets

23

CLR target range60 - 100bps

1,521,36

1,131,05

1,59

1,32

1,010,91

2009 2010 2011 2012

Total impairments Specific impairments

Ongoing improvement in impairments

Asset mix change

Specific impairments Lower defaulted advances

Ongoing effective collections

Portfolio impairments Retained R200m central

provision

Personal loans methodology alignment

Lengthened MFC emergence period

Key driversCLR (%)

24

1,06%

0,24%0,34%

2,01%

0,61%1,05%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

2009 2010 2011 2012

Capital CorporateBusiness Banking RetailWealth Nedbank Group

Cluster Target range

Group 0,60 – 1,00Retail 1,50 – 2,20

Capital 0,10 – 0,55

Wealth 0,20 – 0,40

Bus Banking 0,55 – 0,75

Corporate 0,20 – 0,35

Ongoing improvement in impairments

39,4%

10,0%

3,9%

12,2%

32,5%

1,9%

% of average banking

advances

CLR (%)

25

27 0

45

26 7

65

23 2

10

19 2

73

2009 2010 2011 2012

(17,0%)

10,1%

6,3%

2,6%2,0%

5,9%3,6%

Retail Wholesale Nedbank Group

29,0%33,9% 37,7% 38,6%

7,2%8,0%

11,8%17,8%

2009 2010 2011 2012

Specific

Defaulted advances declining & coverage ratios increasingDefaulted advances (Rm) Defaulted advances as % of book (%)

Total, specific & portfolio impairment coverage ratios on defaulted advances (%)

36,2%41,9%

49,5%

56,4%

Portfolio

Note 1: Retail – Nedbank Retail 2: Wholesale – Nedbank Capital, Nedbank Corporate & Business Banking

(1)

(2)

26

72%

10%

15%3%

Comm & Fees InsuranceTrading Other

46%

9%8%

18%

15%4%

Retail BB CorporateCapital Wealth Other

Strong commission & fee growth

15 412

17 324

1 507

338

476

(204)(205)

2011 Comm. & fees

Insuranceincome

Trading Privateequity

& other

FVadj.

2012

13,7%

24,9%

22,0%NIR (Rm) Contribution (%)Contribution

12,4%

27

Non-interest revenue


Commission & fees 13,7 12 538 11 031Insurance income 24,9 1 695 1 357

14,9 14 233 12 388Trading income 22,0 2 644 2 168Private equity income (34,7) 211 323Tando (7) 214Other income (14,3) 508 379

13,7 17 589 15 472Fair value adjustments >100 (265) (60)

Credit spread on Nedbank bonds (21) (49)Designated asset & liability hedged portfolios (244) (11)

12,4 17 324 15 412

BOOKLET ONLY SLIDE

28

Strong cost discipline, while investing in the franchise

8,0%

4,1%

3,0%

2,3%

3,0%

2,1%

2011 2012Investing for growthSTI & LTI'Business as usual'

14,0%

8,5%

Rate of expense growth slowed

Expenses (Rm) Expense growth contribution (%)

18 919

20 528

784

436

389

2011 'Businessas usual'expensegrowth

STI & LTI Initiatives 2012

Distribution

Systems enhancements

New offerings

Frontline staff

Marketing

ASR +6,5%

8,5%

29

Expenses well managed

Year ended (Rm)%

change 2012 2011

Salaries, wages & other staff costs 8,2 9 360 8 649

Incentive costs 27,4 2 030 1 594

STI 18,7 1 581 1 332

LTI 71,4 449 262

Computer processing 1,7 2 461 2 421

Marketing & PR 17,2 1 281 1 093

Fees & insurance 0,6 1 801 1 790

Other 6,6 3 595 3 372

8,5 20 528 18 919

…efficiency ratio 55,5% (2011: 56,6%)

BOOKLET ONLY SLIDE

30

NIR growth & expense management remain key differentiators

0%

4%

8%

12%

16%

20%

2007 2008 2009 2010 2011 2012

NIR excl FV & Tando Expenses excl Tando

Nedbank NIR & expenses growth (%)

10,6%

8,8%

10,2%

6,0%

8,8% 9,2%

Nedbank Peer average(excl Nedbank)

NIR Expenses

NIR & expenses growth (2007 to 2011 CAGR %)

(3,2%) 0,8% 1,1% 1,1% 2,6% 3,9%Jaws: 1,4% (3,2%)

CAGR

31

Tax rate normalised, impacted by lower dividend income

Year ended (%) 2012 2011

Standard tax rate 28,0 28,0

Dividend income(1) (2,9) (4,4)

Secondary taxation on companies (STC) 1,7 1,7

Change in CGT rate(2) 0,6 -

Foreign income (0,6) (0,5)

Other 0,0 0,4

Effective tax rate 26,8 25,2

1. Lower levels of dividend income received

2. Increase in capital gains tax (CGT) rate from 14,0% to 18,65%

BOOKLET ONLY SLIDE

32

3

21

3427

(14)

14

47 4821,1%

24,0% 25,0% 26,0%

0%

5%

10%

15%

20%

25%

30%

-20

-10

0

10

20

30

40

50

60

70

2009 2010 2011 2012Annual growth in depositsAnnual growth in deposits excl. NCDs & FRNsAve. long-term funding ratio

Strong balance sheet

Enhanced funding & liquidity profile… Good quality advances growth…

112 116 144

5,2%

7,6%

6,1%

7,9%

4,2%

5,5%

4,6%

5,6%

100

120

140

160

0%

2%

4%

6%

8%

2009 2010 2011 2012Asset PayoutsAdvances excl. HL monolineAdvances

Change in deposits (Rbn)Average long-term funding ratio (%)

Advances growth (%)Payouts (Rbn)

Not disclosed

33


Cash & securities 6,3 97 332 91 571

Advances 5,6 527 166 499 023

Other 1,6 58 481 57 533

Total assets 5,4 682 979 648 127

Ordinary shareholders’ equity 10,2 53 950 48 946

Minorities & preference shareholders 1,1 3 780 3 739

Deposits 5,1 550 878 524 130

Long-term debt instruments 2,9 30 298 29 442

Other 5,3 44 073 41 870

Total equity & liabilities 5,4 682 979 648 127

Consolidated statement of financial position BOOKLET ONLY SLIDE

34

Advances growth in line with portfolio tilt

499,0

527,21,4 4,6

6,5

5,3(0,8)

11,2

2011 Mortgageloans

Leases &instalment

sales

Unsecuredloans

Other termloans

Overnightloans

Other 2012

6,5%0,6% 24,4% 8,7% (4,0%) 12,8%

HL (2,6%) CPF +5,4%

PL +28,7% Card +15,6%

Advances (Rbn)5,6%

35

Year ended (Rm) % change 2012 2011Home loans (2,6) 136 301 139 923Commercial mortgages 5,4 97 732 92 719Properties in possession (7,3) 574 619Term loans 13,3 88 354 77 980

Personal loans 28,7 22 969 17 847Other term loans 8,7 65 385 60 133

Leases & instalment sales 6,5 75 764 71 168Credit cards 15,6 10 019 8 666Overnight loans (4,0) 18 341 19 104Overdrafts 4,1 13 694 13 152Other 11,5 97 257 87 189Impairment of advances (5,5) (10 870) (11 497)

5,6 527 166 499 023

Advances BOOKLET ONLY SLIDE

36

Increased term funding, lower reliance on NCDs

524,1

550,9

5,619,4

22,8 (21,0)

2011 Current &savings accounts

Call & termdeposits

Fixed deposits &other

NCDs 2012

Deposits (Rbn)

8,3% 9,9% 14,0% (21,4%)

CA +7,9% SA +9,3%

Cash Mgnt +7,5% Fixed deposits +8,2%

Dec 2012 loan to deposits ratio: 95,7% (Dec 2011: 95,2%)

5,1%

37

Deposits

Year ended (Rm) % change Dec 2012 Dec 2011

Current accounts 7,9 55 843 51 733

Savings accounts 9,3 17 373 15 900

Term deposits & other 11,9 374 052 334 293

Call & term deposits 9,9 216 333 196 889

Fixed deposits 8,2 32 911 30 424

Cash management deposits 7,5 56 609 52 682

Other deposits 25,6 68 199 54 298

Foreign currency liabilities 8,8 10 161 9 342

NCDs (21,4) 76 888 97 840

Deposit repurchase agreements 10,2 16 561 15 022

5,1 550 878 524 130

BOOKLET ONLY SLIDE

38

Basel III target range: 10,5 – 12,5 %

Basel II target range: 7,5 – 9,0 %

Only 2015

2012 pro-forma ratio: compliant

Anticipate pragmatic approach

Includes off-balance sheet exposures

2012 pro-forma ratio: 16,4x

SARB maximum: 25,0x

Basel maximum: 33,3x

Strong Basel III position

Capital:

Common equity tier 1 ratio (%)

11,4 11,6

2012(Basel II.5)

2012(Pro forma Basel III)

NSFR: Only 2018

LCR: Phased in from 2015

Leverage:

New range based on 2019 minimum SARB requirement

Nedbank Capital

Brian Kennedy

Solid performance in difficult market conditions

40

Nedbank Capital – financial highlights

Year ended%

change 2012 2011


Gross operating income (Rm) 25,6 4 570 3 640

NIR : expenses ratio (%) 154,1 141,3

Efficiency ratio (%) 43,3 47,7

Credit loss ratio (%) 1,06 1,23

Average banking advances (Rm) 10,6 49 596 44 835

Average deposits (Rm) 21,3 87 784 72 356

Allocated economic capital(1) (Rm) 3,8 5 632 5 428

Headline economic profit (Rm) 31,9 690 523

ROE(1) (%) 25,4 22,6

Nedbank Capital

Assets

Other clusters

Headline earnings

21%

79%

19%

81%

Note 1: 2011 restated for enhancements to economic capital allocation methodologies in 2012.

41

0.0%

1.0%

2.0%

3.0%

0

15 000

30 000

45 000

2009 2010 2011 2012Investment grade Sub-investment grade Margin (RHS)

Average loans & advances (Rm)

Strong asset growth in Investment Banking

Continue to enhance client value management & cross sell

Credit loss ratio improved marginally although climate remains difficult

Total impairments R526m out of R5 199m for the group

Solid Investment Banking result with robust asset growth

CLR from lending activities (%)

15,9%

0,36%

1,27% 1,23%1,06%

2009 2010 2011 2012

Annualised CLR (%)Lower boundUpper bound

10bps

55bps

Direct lending margin (RHS)

42

Markets income distribution (Rm)

Strong performance from Fixed Income

Leverage strong position in primary business, full spectrum banking on back of IB growth & cross sell

Scaled down proprietary trading & consolidated low margin businesses

Improved efficiency of revenue generation in the markets business

Markets revenue & performance (%)

0%

50%

100%

150%

200%

250%

0%

100%

2010 2011 2012

Mar

kets

reve

nue

NIR : Expenses Ratio (RHS) Efficiency Ratio (RHS)

47,5%

0%

10%

20%

30%

40%

-20

to -1

5

-15

to -1

0

-10

to -5

-5 to

0

0 to

5

5 to

10

10 to

15

15 to

20

20 to

25

25 to

30

30 to

35

>35

% o

f tra

ding

day

s 20112012

2012 2011

VaR(1) (Rm) 14.7 12.0

Note 1: Average VaR (99%, one day)

43

Resolute focus on execution in line with key themes

Client centricity

Enhanced collaboration & developing unique solutions for clients

Continued focus on client value management & cross sell

Work closely with the Ecobank alliance for targeted growth into Africa utilising our sector specific expertise

Efficiency Continue to streamline internal processes & enhance efficiencies

Headcount levels aligned to market opportunity, with room for growth in key areas

Expansion into Africa

NedbankCorporate

Mfundo Nkuhlu

Solid & dependable track record in delivering good returns

45

Nedbank Corporate – financial highlights

Year ended%

change 2012 2011


Margin (%) 2,03 1,99








ROE(1) (%) 22,5 24,5

Nedbank Corporate

Assets

Other clusters

Headline earnings

26%

74%

24%

76%


46


Nedbank Corporate – strong performance by businesses

ROE (%) & economic capital (Rm)


870 826 870

1 057

0

500

1 000

2009 2010 2011 2012

660

501

629716

0

500

2009 2010 2011 2012

2 965 2 998 2 934

3 739 29,3

27,629,7

28,3

2 000

3 000

4 000

10.0

15.0

20.0

25.0

30.0

35.0

2009 2010 2011 2012

3 441 3 549

2 824

3 714

19,214,1

22,319,3

2 000

3 000

4 000

5 000

5.0

10.0

15.0

20.0

25.0

2009 2010 2011 2012

ROE (%) & economic capital (Rm)

21,5%

13,8%

CorporateBanking

Property Finance

47

NIR (Rm) & NIR : expenses ratio (%)

Nedbank Corporate – key indicators

Note 2009 & 2010 economic capital has not been restated to the current capital allocation methodology. 2010 & 2011 restated to exclude Nedbank Africa.

Credit loss ratio (%)

Cost-to-income ratio (%) Economic profit (Rm)

3 388 3 853 3 6842 768

0,24%0,19%

0,29%0,24%

0.00%

0.10%

0.20%

0.30%

-

2 000

4 000

6 000

8 000

2009 2010 2011 2012

Defaulted advances CLR

1 142 1 1121 261

1 469

74,4%

63,4%70,4%

74,6%

40%

50%

60%

70%

80%

500

1 000

1 500

2 000

2009 2010 2011 2012NIR NIR : expenses

6 485 6 653 6 426

8 089

730

416

736 758

200

400

600

800

4 000

6 000

8 000

10 000

2009 2010 2011 2012Economic capital EP

38,6

45,6

41,6 41,1

30.0

35.0

40.0

45.0

50.0

2009 2010 2011 2012

48

Further client wins in Corporate Banking & Property Finance Improved client feedback on service & relationship quality Enhanced collaboration & client value management

Nedbank Corporate – non financial highlights

Launch of new product capability & offering Strong credit & operational risk environment Cross-border client support

Investment in staff development & positive feedback from internal staff surveys

Enhanced focus on transformation initiatives

Client

Products & processes

People

49

Tougher conditions likely to last for longer Expect wholesale market to grow at a slow pace Long anticipated infrastructure rollout programme should gain

impetus

Focus on delivery of the strategy Continues to be one of evolution & enhancement Transformation remains an imperative

Nedbank Corporate – prospects

Continue to build momentum to drive sustainable growth

Strategy execution

Economic environment

Nedbank Retail & Business Banking

Ingrid Johnson

Client‐centred strategies &effective risk management drive sustainable performance in challenging times

51

Headline earnings of R3,5bn, up R539m

Strong NIR growth of 11,7% to R9,5bn

CLR steady at 1,62% & strong b/s impairments

Sustainable performance

Client centred strategies

Collaboration & innovation

Assets

42%

58%

47%

53%

Headline earnings

Nedbank Retail & Business BankingOther clusters

Distinctive client value propositions

Investment in integrated channels

World class customer management capabilities

Leveraging wholesale relationship strengths and “influencers” to accelerate client gains

Integrated micro-market approach

Active innovation portfolio

Nedbank Retail & Business Banking – highlights

52

Year ended%

change 2012 2011

Headline earnings (Rm) 9,0 944 866

Margin (%) 3,20 3,29




Average banking advances (Rm) (1,0) 58 958 59 563


Allocated economic capital1 (Rm) 8,2 4 401 4 066


ROE1 (%) 21,5 21,3

Assets

Headline earnings

13%

87%

13%

87%

Nedbank Business BankingOther clusters

Nedbank Business Banking – financial highlights

1 2011 restated for enhancements to economic capital allocation methodologies in 2012

53

46,2 42,8 44,2 46,3 50,9

10,29,2 8,4 7,0 4,51,1 7,1 6,0

57,5 52,0 52,6

60,4 61,4

2008 2009 2010 2011 2012

58 52 40 5334

2008 2009 2010 2011 2012

55-75

ROE (%)

31,526,6 26,4 21,3

21,5

2008 2009 2010 2011 2012

CLR (bps)

Target range:60-80

ActualAligned2

Asset book (Dec actual advances, Rbn)

Sustained high quality performanceProactive risk management

Nedbank Business Banking – decentralised accountable business model a key differentiator

1 Impact of cross-cluster client moves 2 At 11% prime interest rate and 2012 average ratio of ECAP / advances of 7,35%3 Prior year advance numbers were restated to include Acceptances previously held at the Centre

YoY

9,9%

1,7%

Net client moves1

Reducing book to mitigate riskBusiness as usual 3

Decision to reduce higher risk / low EP / non primary banked advances

Rigorous pricing for risk impacting volumes

54

Nedbank Business Banking – strong momentum masked by tough economy

1216 19

2009 2010 2011 2012

Asset payouts

+18%

New client acquisition

19,025,7 29,6

21,231,5

2009 2010 2011 2011 2012

Net promoter score

+10,3pp

Client management

n/a

56 72

2009 2010 2011 2012

Rbn

Net new primary banked clients (# of CISs) CMAT1 score

1 The Customer Management Assessment Tool (CMAT) is the World’s leading CRM diagnostic, assessment and benchmarking approach. CMAT has a thirteen year track record, undertaken by 900 companies across the world in a range of industries, including in other Nedbank Group clusters.

New methodology

446601 748 775

2009 2010 2011 2012

+4% 5th then 2nd highest score out of 900 companies globally

n/a

n/a

+4%

55

Year ended%

change 2012 2011


Margin (%) 5,68 5,41






Allocated economic capital1 (Rm) 9,3 21 077 19 282

Headline economic profit (Rm) 49,8 (209) (416)

ROE2 (%) 12,1 10,8

Assets

Headline earnings

29%

71%

34%

66%

Nedbank RetailOther clusters

Nedbank Retail – financial highlights

1 2011 restated for enhancements to economic capital allocation methodologies in 2012.2 ROE % excluding the Home loans back-book is 13,8% (2011: 14,3%)

56

60 79 101 129 321 377 413

513

597 669

752 826 978

1 125 1 266

1 468

2009 2010 2011 2012

Accelerating momentum in client gains...

5,257 Total Clients2 4,832 5,911

1 2010 includes 264K clients acquired as part of MFC2 Acquired approximately 49k customers from Ackerman’s base (Jan’12)3 The majority of MFC clients fall in the middle market, increasing the base of clients with a single product holding

120 93 107

205191

37761 141

170264

651

425

655

2010 2011 2012

387

…doing more with Nedbank

1

ELB

Youth

Middle/ RRB

Nedbank Retail – more enduring client relationships with all in SA

Client growth (‘000) Clients with 2+ Products (‘000)

12,6%15,9%

ELB

Youth

Middle/ RRB3

24,1 % of total client base 23,4 24,823,3

15,0%

37,8% including Bancassuranceproducts

57

Significant NIR growth of 15,8% CAGR balanced across all key products…

256

236

264

277

(163)

46

(5)

1 Reflects all pricing uplifts. Net average annual fees increase equates to 3,5%2 Reflects volume related drivers3 Includes MFC fair value accounting movement of –R97m & saswitch & other of R92m

Transactional 2

Personal Loans 2

Fair value & other 3

Card 2

Secured Lending 2

Bundle benefits for clients1

Fee increases1

…driven by volume gains after proactively moving clients to relevant bundles

Nedbank Retail – strengthening transactional revenues

Total

362 507 665 649 465 650 829 1 102 1 981

2 124 2 375

2 636

2 323 2 712

3 184 3 575

5 130

5 994

7 052

7 962

2009 2010 2011 2012

Card

Trans-actional

Personal LoansSecured

Total NIR (Rm) Drivers of NIR growth YoY (Rm)

+910

Incremental R2,8bn

58

STRATEGIC INTENT

Branches & Outlets1

(#)

ATMs(#)

Alternateoutlets

Branches

Growth in distribution…

40% increase

64% increase

STRATEGIC INTENT… with enhanced access across SA

50

< 5yrs old

> 5yrs old

Urban

Rural/ Semi-urban

440

593

103

165

543

758

2009 2012

+60%

+27%468 568 75

190543758

2009 2012 2015

1 174 1 636 679

1 412 18533048

2009 2012 2015

1 Excludes Personal Loans kiosks (2009:250 & 2012: 313). Growth is from 2009 year end levels

Nedbank Retail – step change in distribution making Nedbank more accessible

Branches & Outlets1

(#)

59

Nedbank Retail – removing extreme CLR volatility of past cycle

4,0 4,9 8,8 10,1 8,9 7,5

1 Actual CLR re-calculated assuming 2012 asset mix2 Percentage defaulted advances including legal and non legal3 Sensitive to advances mix

6,3

Comparable CLR1

Retail CLR(%)

1,21 1,151,35

2,70

3,27

2,72

1,98 2,01

2005 2006 2007 2008 2009 2010 2011 2012

4,959 1,512 3,559 5,644 1,040 3,729 887 3,927 I/S6 (Rm)

4,6NPLs2 (%)

2,2

1,5TTC Target range3

OtherPersonal LoansHome Loans

Extreme volatility

37 29 30 36 41 45Specific coverage 4 (%)

Defaulted loans reduced by R6,4bn from their peak of R18,8bn in 200954141

4 2005 to 2008 numbers exclude MFC5 Specific Coverage is 37.5% on a basis of aligning defaulted advances to the 2012 mix6 Income statement impairments

60

40% lower growth in 2H12

5

10

15

20

25

H1 H2 H1 H2 H1 H2 H1 H2

01020304050

Actual PD higher than expected 29

228

308

265

222

321

H2 H1 H2

Nedbank Retail – aligning personal loansgrowth to strategic intent and risk appetiteAddressing H1 concerns re origination Revenue protects against higher impairments

2009 2010 2011 2012

Impairment moves half on prior period halfGOI growth half on prior period half – excluding related Wealth economics

Avg GOI margin1(%)Expected PD model calibration 2 (%)Actual PD 2 (%)

Nedbank growth (%)Rest of market (%)

Rm

1 GOI margin is the total gross operating income (Net Interest Income and Non Interest Revenue) divided by average advances2 PD is the probability of loan going into default

2012

25% 14%

135

198

2011

ROE

2012

11%

R333m for methodology change

61

Nedbank Retail – home loans repositioned

1 Retail Home loan book excluding Retail Relationship Banking, Business Banking & Wealth

(111)

(748)

(45)(19)(189)

14 48

(13)

122

Pre-06 06-08 09-12

Average advances1(Rbn)

Headline Earnings1(Rm)Defaulted Loans1(%)

Credit Loss Ratio1(%)

Vintages

Vintages

Vintages

Vintages

2010 2011 2012

14

62

1612

55

24

10

47

29

Pre-06 06-08 09-12

2,22,5

1,01,2

1,5

0,60,2

0,70,5

Pre-06 06-08 09-12

7,2

14,7

3,46,7

13,2

3,56,2

9,9

3,1

Pre-06 06-08 09-12

First reported profit since 2007, of R153m

62

…and integrated lines of business…

592 638 973

1 125 1 467

1 849

67

PL RRB Card CE MFC HL Other

Non Interest Revenue

Income from Lending Activities(NII; Impairments)

Operating Income

Strong growth across all financial drivers...

2,9

2,8

2,2

6,7

1,7

22,6%

33,1%

15,8%

2009-2012 CAGR

Expenses 11,0%

RoE % +12,6pp

Cumulative growth 2009-2012 (Rbn) Cumulative growth 2009-2012in operating income (Rm)

Cumulative growth 2009-2012 expenses, Rm

…while investing for growth

1 Other initiatives include CVP’s (Ke Yona, Savvy, Relationship Banking), product and channel innovation, including digital

Nedbank Retail – excellent progress in charting a new path to sustainable profitable growth

3,9

Distribution

Other initiatives1

Efficiencies

Inflation and Other

536

273

(633)

2,748

63

Cohesive strategies, consistently executed

Skilled leadership team with track record of delivery

Effective risk management culture embedded

Consistent investment in client-centred business model: Distinctive CVPs Increased distribution

Collaborative culture enabling innovation & growth

Leveraging strong foundations…

Grow the client franchise - more clients, with more cross-sell, less attrition, across more micro-markets

Optimise to invest - integrated channels leveraging digital & area collaboration plans

Invest in people & organisational effectiveness

Accelerate client-centred innovation especially in digital, deposits & payments

Continued risk management -selective origination & effective collections

… to deliver on strategic imperatives

Nedbank Retail & Business Banking – prospects

NedbankWealth

Dave Macready

Delivering high return on equity

65

Nedbank Wealth – financial highlights

Year ended

%change 2012 2011

Headline earnings (Rm) 9,5 716 654

Margin (%) 2,01 2,18




Assets under management (Rm) 34,1 150 495 112 231

Life embedded value (Rm) 33,4 2 030 1 522

Life value of new business (Rm) 37,7 563 409



ROE(1) (%) 29,6 27,7

Nedbank Wealth

Headline earnings

Other clusters

10%

90%

AUM netinflows R24,5bn

Life APE +29,4%

ST insurance premium +7,2%


66

Good progress against key focus areas

Insurance

Asset Management

Wealth Management

Expanded offering & cross-sell

Strong growth across existing & expanded offerings

Progress on distribution & marketing alignment

Investment in capacity & IP

Momentum across all propositions

Record net flows & market share growth

Success in cash solutions & international

Performance & awards

Invested for growth

Nedbank Private Wealth launched

Aligned & enhanced international value proposition

Investment in structure, capacity & IP

67

NIR growth of 16,2% to R2,6bn

Insurance Asset Management Wealth Management

2011 2012

26,0%

7,3%

Relative divisional NIR contribution & growth

20,9%

68

KPI’s reflecting growth bias

2010 2011 2012

Insurance

VNB Short-termclaims ratio

Wealth ManagementAsset Management

Client deposits

AUM

R15

0,5b

n

+34%

R11

2,2b

n

Net flows

R24

,5 b

n

R6,

4bn

>+100%

(6%

) +2%

R56

3mR

409m

+38%(1

,8%

)

+5,3

%

+26%

R15

,5bn

R12

,2bn

Avg daily brokerage

(6%

) +2%

69

Enabling future growth

Insurance

Asset Management

Wealth Management

Further product expansion & bundling opportunities

Continue collaboration, distribution & marketing alignment

Enhanced risk & governance framework

Maintain momentum across propositions

Deliver new growth opportunities

Ongoing focus on performance & Nedgroup Investments brand profile

Profile Nedbank Private Wealth proposition

Cross-sell, collaboration & new client acquisition

Strategically reposition stockbroking & fiduciary operations

Summary & prospects

Mike Brown

Continued progress towards our medium‐to‐long term targets

71

Economic outlook remains challenging with downside risk

Global economic conditions remain challenging & volatile, although positive signs & optimism emerging

Nedbank Group economic forecasts for 2013:

‒ GDP growth: 2,6%

‒ Interest rates: flat for longer, increasing by 50bps in Q4 2013

‒ Inflation: average 5,6%, below top end of SARB band (3% - 6%)

Attractive areas of growth, but remain cautious of potential risks

‒ Selective growth: Home loans, Personal loans

‒ Stronger growth: Strategically attractive, higher EP businesses & products (transactional, card, SME, corporate banking, investment banking, flow trading, insurance & asset management)

‒ Greater focus: Retail & commercial deposits

Regulatory focus shifting to pricing & consumer protection

72

2013 guidance

Advances growth at mid-to-upper-single digits

Margin to remain at similar levels to 2012NII

Improving into upper end of 60 – 100 bps target range

Low double digit growth (excluding fair-value adjustments)

Mid-to-upper single digits

CLR

NIR

Expenses

73

Continued progress towards our medium-to-long term targets

Metric 2012Medium-to-long-term

target2013 outlook

vs 2012ROE (excl goodwill) 16,4% 5% above COE Improving,

remaining below target

Diluted HEPS growth 19,0% ≥ CPI + GDP growth + 5% Meet target

Credit loss ratio 1,05% 0,60% - 1,00% Improvinginto upper end of target

NIR : expenses 84,4% > 85% Improving to meet target

Efficiency ratio 55,5% < 50% Improving, remaining above target

CAR:Common equity Tier 1 Tier 1Total

B III11,6%13,1%15,1%

Basel III basis:10,5% - 12,5%11,5% - 13,0%

14,0% - 15,0%

Strengthening, remaining around mid-point

of new target

Economic capital Internal Capital Adequacy Assessment Process (ICAAP): A

debt rating (including 10% capital buffer)

Dividend cover 2,19x 1,75 to 2,25 times

New

New

74

In summary

External environment remains challenging, with downside risk

Nedbank Group…

Focussed on growing the franchise

Built momentum in 2012 to offset the challenges in external environment

‒ Continued improvement across all key performance indicators

‒ All business clusters showing year on year growth in headline earnings

‒ Strengthened the balance sheet & investing in the franchise

‒ Continued implementation of our strategic focus areas

Nedbank Group has the strategy, infrastructure & people in place to deliver sustainable value to all our stakeholders & in so doing continue on our

journey to ‘Build Africa’s most admired bank’

Thank you

76

Disclaimer

Nedbank Group has acted in good faith and has made every reasonable effort to ensure the accuracy and completeness of the information contained in this document, including all information that may be defined as 'forward-looking statements' within the meaning of United States securities legislation.Forward-looking statements may be identified by words such as ‘believe’, 'anticipate', 'expect', 'plan', 'estimate', 'intend', 'project', 'target', 'predict' and 'hope'. Forward-looking statements are not statements of fact, but statements by the management of Nedbank Group based on its current estimates, projections, expectations, beliefs and assumptions regarding the group's future performance.No assurance can be given that forward-looking statements will prove to be correct and undue reliance should not be placed on such statements.The risks and uncertainties inherent in the forward-looking statements contained in this document include, but are not limited to: changes to IFRS and the interpretations, applications and practices subject thereto as they apply to past, present and future periods; domestic and international business and market conditions such as exchange rate and interest rate movements; changes in the domestic and international regulatory and legislative environments; changes to domestic and international operational, social, economic and political risks; and the effects of both current and future litigation.Nedbank Group does not undertake to update any forward-looking statements contained in this document and does not assume responsibility for any loss or damage whatsoever and howsoever arising as a result of the reliance by any party thereon, including, but n limited to, loss of earnings, profits, or consequential loss or damage.

77

ADDITIONAL BOOKLET ONLY SLIDES

78

Share price relative & price to tangible book

1 year to 31 Dec 2012 3 years to 31 Dec 2012

5 years to 31 Dec 2012 Price : Tangible book value (x)

1,3

2,01,8

2,8

1,6

1,9

1,7

2,1

1.0

1.4

1.8

2.2

2.6

Dec 08 Dec 09 Dec 10 Dec 11 Dec 12

Note: Price: Tangible book value calculation based on end of period share price / reported TNAV as at 30 June 2012

130

120

149

116

80

100

120

140

Dec 11 Mar 12 Jun 12 Sep 12 Dec 12

152

117

169

128

80

100

120

140

160

Dec 09 Jun 10 Dec 10 Jun 11 Dec 11 Jun 12 Dec 12

134

113

149146

40

60

80

100

120

140

Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12

79

Current M-L term target

84,4% 85,0% 90,0%

Current 1,05% 16,4% 16,6% 18,0%

Top of target range 1,00% 16,8% 16,9% 18,4%

Mid-target range 0,80% 18,2% 18,3% 19,8%

Bottom of target range 0,60% 19,5% 19,7% 21,1%

ROE drivers – illustrative scenario based on FY 2012

Assuming no change in leverage90% NIR : expenses only illustrative & is not a target

NIR : Expenses

Interest rate sensitivity of R813m pre-tax for every 1% move in interest rates = ±1,3% change to ROE

Impa

irmen

tsC

LR

RO

E(e

xclu

ding

goo

dwill

)

80

How we contribute to all our stakeholders

R5,7bn, 15%

R3,6bn, 10%

R3,4bn, 9%

R7,7bn, 21%

R11,4bn, 31%

R5,2bn, 14%

In 2012, R37bn of income for…Retained profits To position for the future & grow

Dividends24,3% increase, paid to more than 17 000 shareholders

Direct & indirect tax expenseOne of SA’slargest tax payers

Other expensesServing our more than 6 million clients & increasing distribution: 80 new outlets, 476 new ATMs

Staff expensesEmploying & rewarding more than 28 000 people to serve our clients

ImpairmentsCost of lendingacross the economy

81

Nedbank Business BankingConsistent, quality performance through challenging cycle while delivering on aspirational vision to be the leader in business banking for SA

2 086 2 324 2 472 2 543 2 731 2 860 3 411 3 520 760 949 1 356 1 808 1 287 911

907 981 2 846 3 273

3 828 4 351 4 018 3 771 4 318 4 501

2005 2006 2007 2008 2009 2010 2011 2012

-827

+977

Gross Operating Income(Rm)

1 705 1 799 2 033 2 055 2 120 2 339 2 722 2 938 227 162

152 330 284 210 324 207

2005 2006 2007 2008 2009 2010 2011 2012

-123

+883

Costs(Rm)

2 028 2 184 2 342 2 281 2 229 2 259 2 212 2 171

2005 2006 2007 2008 2009 2010 2011 2012

-110Headcount(#, as at Dec)

Avg Prime (%)

GDP growth (%)

10,6 9,09,911,915,111,1 13,1

5,3 3.53,1(1,5)3,65,6 5,5

11

Endowment incomeIncome excl endowment

ImpairmentsOperating costs

1332

1

2.5

8,8

133 21332

1 Restated for internal transfers to align with Corporate Saver / TB moves in 2008 2 Imperial Bank staff

RoE (%) 20,3 21,326,426,631,525,0 29,6 21,5Change

2008-2012

82

Nedbank Business BankingImpacted by fragile economic environment

Finance and insurance

27%

Private Households

19%Manufacturing19%

Wholesale & Retail10%

Transport & communication

7%

Community & Social

6%

Agriculture5%

Construction4%

Mining & Other2%

Advances portfolio by sector% of total client assets as at Dec 2012

100% = R76.4b

GDP growth by sectorIndexed performance

85

90

95

100

105

110

115

Jan 2008 Jan 2009 Jan 2010 Jan 2011 Jan 2012 Jan 2013

Agriculture,

Mining & Quarrying

Manufact.

Construction

Retail Trade &accomm.

1.8%

CAGRfor period

0.3%

3.2%

83

Nedbank RetailRepositioning Retail to build deep enduring banking relationships with all in SA, underpinned by effective risk management & clients’ financial fitness

6 912 7 495 8 951 8 774 10 797 12 546 14 423 16 156 1 086 1 352 1 467 2 874 2 829 2 390 2 412 2 465

7 997 8 847 10 418 11 648 13 626 14 936 16 835 18 621

2005 2006 2007 2008 2009 2010 2011 2012

-409

+7,383

Gross Operating Income(Rm)

5 644 5 906 6 646 7 127 7 926 8 673 9 889 10 848 887 1 040 1 512 3 559 5 644 4 959 3 729 3 927

2005 2006 2007 2008 2009 2010 2011 2012

+368

+3,722

Costs(Rm)

12 127 13 442 14 783 16 296 16 515 17 178 18 220 18 568

2005 2006 2007 2008 2009 2010 2011 2012

+2,272

Headcount(#, as at Dec)

Avg Prime (%)

GDP growth (%)

10,6 9,09,911,915,111,1 13,1

5,3 (1,5)3,65,6 5,5

Endowment incomeIncome excl endowment

ImpairmentsOperating costs

8,8

RoE (%) 17,8 10,84,8(0,5)6,421,0 18,7 12,1Change

2008-2012

Note: 2009 & 2010 numbers restated to exclude Saf & Prof

3,53,1 2,5

84

1 2011 restated for enhancements to economic capital allocation methodologies in 20122 Retail Home loan book excluding Retail Relationship Banking, Business Banking & Wealth

Headline earnings - Rm

ROE%

Advancesavg. - Rm

CapitalRm

Credit lossratio - %

Year ended Dec2012

Dec 2011

Dec2012

Dec 2011

Dec2012

Dec 2012

Dec 2012

Dec2011

Secured lending 1 346 825 12,3 8,2 136 121 10 939 0,76 1,35

Home loans2 153 (198) 3,6 (4,4) 84 308 4 295 0,59 1,26

MFC 1 193 1 024 18,0 18,6 51 813 6 644 1,05 1,54

Card 778 663 28,8 28,1 8 745 2 696 3,90 3,23

Consumer Banking 293 508 5,6 10,6 19 728 5 263 10,72 7,58

Relationship Banking 161 123 7,9 6,2 23 039 2 046 0,72 1,47

Other (26) (28) 21 133

Nedbank Retail 2 552 2 091 12,1 10,8 187 654 21 077 2,01 1,98

Nedbank Retail exclHL backbook2 2 517 2 299 13,76 14,35 130 195 18 301 2,12 2,77

Nedbank Retail – segmental analysis

85

Nedbank RetailDefaulted advances reduced by R6,4bn since 2009 peak while strengthening portfolio impairments to 1,2% to prepare for next cycleDefaults over timeDefault % of total advances

Defaulted advances & specific impairments

Portfolio impairments% of performing book

0%

5%

10%

15%

20%

Home Loans Personal LoansVAF MFCCard Retail TotalHL Back HL FrontPrime

0,6% 0,5%0,8%

1,0%1,2%

2008 2009 2010 2011 20122005 20112006 2007 2008 2009 2010 2012

Defaulted advancesSpecific impairments

12,8

18,8 17,714,4

12,4

3,6 5,2 6,2 5,9 5,6

2008 2009 2010 2011 2012

86

Lending margin1

VintagesVintages

~300bps higher margin required2

Nedbank Retail - home loans repositionedProfile of vintages reflects higher quality front book utilising risk based pricingDefault vintages over time on R84bn4 of HL advances (PD%)

Vintages

LTV distribution3 (%) Dec 2012

1 Based on Nedbank MMFTP, Liquidity & Balance Sheet Management charges, excluding endowment2 Margin required for 06-08 profile to be EP neutral, assuming no drop-off due to higher price3 LTV based on original loan amount and valuation at point of registration4 Retail Home loan book excluding Retail Relationship Banking, Business Banking & Wealth

1,51,2 1,2

1,5 1,3 1,41,4 1,21,6

Pre-06 06-08 09-12

201020112012

0-80

80-90

90-100

>100

3920 32

13

11

39

4053

288 16

1

Pre-06 06-08 09-12

0%

5%

10%

15%

20%

25%9 months

12 months18 months

24 months

36 months

Expected 12m

2006 2007 2008 2009 2010 2011 2012

87

Nedbank Retail - personal loansConservative strategies on growth & risk are taking effect in response to concerning industry dynamics

Selective origination aligned to strategic intent & risk appetite

Additional impairments in 2012 of R333m

Loan size tightened, tenor unchanged

PL product line not reflecting all related economics

o Max loan size & tenor unchanged since 2009 at R120k & 60 monthso Average loan sizes on payout reduced by between 7% and 35% across all

risk categories between Q1 2012 and Dec 2012; higher risk loans average R10,000 and lower risk loans average R55,000

o Changes to impairment methodology› 100% impairment after 5 cumulative months of missed payments

(previously 6) leading to R64m additional specific impairments (H1: R42m)› Bolstered impairments on performing portfolio by R269m (H1: R93m) to

reflect higher inherent risk of default, which is masked by market dynamics

o Loan growth slowed versus market at higher pricing given higher inherent risko Client max TDSR1 of 60% implemented – avoiding R36m pm of potential payoutso Tracking client lending behaviour post our lending via credit bureau datao Strong gains in primary clients (up 2 fold) through offering personal loans as

part of holistic Ke Yona CVP, committed to enabling clients’ financial fitness

o HE of R413m (ROE of 12%) on R3,4bn capital allocated, at 6,2 times gearedo Some of the product related insurance income in Nedbank Wealth o Transactional cross-sell revenue reflected in client segmentso Earnings resilience in high stress-testing scenarios – minor headline loss

noted in a 1 in 25 year event with severe deflation

1 TDSR = Total debt service ratio

88

Refined methodology has increased coverage on non-cure buckets. Given industry dynamics, future collections likely to be under pressure

` Previous methodology 3 Refined2007 2008 2009 2010 2011 2012

Performing loans - Rbn 5.5 5.9 8.0 11.3 15.5 19.6Defaulted loans - Rbn 1.0 1.0 1.2 1.3 1.7 2.6Defaulted loans - % 15.2 14.5 12.7 10.3 9.9 11.7Portfolio impairments - Rm 215 175 90 128 283 629Specific impairments - Rm 561 565 655 788 977 1 549

Total Coverage 56% 57% 56% 61% 57% 59%Defaulted loans mix by payment behaviour (%):

Regular1 10% 5% 4% 4%Irregular1 10% 9% 7% 6%Partial1 48% 58% 34% 30%No Payment 0/3; 0/4 mths 16% 16% 14% 16%No Payment 0/5 mths 17% 12% 13% 14%Debt Counselling1 29% 30%

Coverage ratio by payment behaviour 2(%):Regular 16% 20% 12% 9%Irregular 24% 30% 21% 25%Partial 53% 57% 54% 55%No payment 0/3; 0/4 mths 68% 71% 73% 76%No payment 0/5 mths 75% 82% 83% 100%Debt Counselling1 59% 51%

1 All Debt Counselling reclassified into default from 2011 reducing overall coverage ratio – generally higher payment experience2 Coverage adequacy determined by anticipated future cashflow to be received based on client payment behaviour, backtested for past actual experience3 Pre 2009 provisioning buckets not comparable as they were not based on client missed payment profiles

Nedbank Retail – personal loansAdequacy of balance sheet impairments

• The PV of post write off recoveries is ~ 23% i.e.: after discounting & costs 23% of the written off balance is recovered. This is however prudently only accounted for on receipt of cashflow

• Write-offs of R1,6bn in 2012 (2011: R1,0bn), 66% up

• Portfolio impairments methodology change effected in 2012 - additional i/s charge of R269m

Impairment methodology adjusted to cater for inherently higher risk profile and concerning industry dynamics

Actual write-offs consistently less than total balance sheet impairments held

500

1 000

1 500

2 000

2 500

Dec-08 Dec-09 Dec-10 Dec-11 Dec-12

Balance sheet imp at all points in time sufficient to exceed 12mth of future write-offs – concerning change in trend in 2012

Total B/S impairments Total B/S impairments (new methodology)

Write-off in 12 months forecast Write-offs net of recoveries

Write-off in 12 months

Rm

Write-offs net of recoveries forecast

89

Commitment Key deliverables by 2014 Cumulative Progress over 2 years to Dec 2012

Cost efficiencies o R600m (run rate) o R633m

Re-invest in new outlets

o R400m cumulative capex− 340 new outlets− 1 000 new ATMs

o R406m invested − 209 new outlets, 97 closures, 30 refurbishments − 1 045 new ATMs, 180 closures

A leader in digital o High usageo Innovative offerings

o Clients using digital up 46% in last 24 months to ~1.2mo Nedbank App SuiteTM, MyFinancialLifeTM, ApproveITTM,

Home loans online channel

Embed effectiverisk culture

o Quality asset portfolios in line with TTC risk appetite

o Within upper end of target range – sensitive to product mixo B/S impairments strengthened with 45% coverage

Unsecured lending o Broaden client profileo Enable primary client growth

o Ke Yona CVP - PL’s from R1 000o ~39% increase in transactional clients

Home loans o Primary interfaceo Restore economics

o >73% payouts through own channels - good credit quality, priced for risk

Increase primary banked clients

o >30% of total clientso Strong growth through

Nedbank@Work

o 35% of total clients primary bankedo 169,000 new transaction accounts from wholesale

relationships through Nedbank@Work

Strong relationshipoffering in branch

o Small business in ~70% of branches, multi-skill in rest

o Holistic offering for household & business

o Representation at 54% from 38% of branches complemented by increased multi-skilling in the others

o Strong alignment between BB & RRB leveraging client-centred offerings including value adds such as Nedbank Small Business Friday1, Small Business Seminars & SimplyBiz.co.za

Nedbank Retail BankingDelivering on 2010 strategy commitments

1 Nedbank Small Business Friday in conjunction with NSBC

201302 nedbank group 2012 annual results presentation ......4 improvement across all key performance...

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