Nedbank Group 2018 ESG INVESTOR BRIEFING JSE November 2018 Agenda - - PowerPoint PPT Presentation

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Nedbank Group 2018 ESG INVESTOR BRIEFING JSE November 2018 Agenda - - PowerPoint PPT Presentation

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Nedbank Group 2018 ESG INVESTOR BRIEFING JSE November 2018 Agenda Nedbanks high-level ESG journey Delivering our purpose & delivering on the SDGs (Environment & Social) Through our businesses Through our own

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Nedbank Group

2018 ESG INVESTOR BRIEFING

JSE November 2018

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NEDBANK GROUP LIMITED

Agenda

  • Nedbank’s high-level ESG journey
  • Delivering our purpose & delivering on the SDGs (Environment & Social)
  • Through our businesses
  • Through our own operations
  • Through partnerships
  • Governance
  • Board profile – ensuring good governance
  • Worldclass disclosure
  • Engaging our shareholders
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NEDBANK GROUP LIMITED

171 62 259

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18

Nedbank’s high-level ESG journey…

Nedcor rights issue

Nedbank share price

1990 2002/3 2006 2015 2017 2014

Governance roadshows

2009 King Code

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NEDBANK GROUP LIMITED

Agenda

  • Nedbank’s high-level ESG journey
  • Delivering our purpose & delivering on the SDGs (Environment & Social)
  • Through our businesses
  • Through our own operations
  • Through partnerships
  • Governance
  • Board profile – ensuring good governance
  • Worldclass disclosure
  • Engaging our shareholders
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NEDBANK GROUP LIMITED

Our purpose

To use our financial expertise to

do good for individuals, families,

businesses and society.

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NEDBANK GROUP LIMITED

Delivering our purpose through the SDGs

Our businesses (products & services) Partnerships Our own operations

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Client Value Management underpinned by sector expertise & informed by enhanced analytics

We have invested significantly in the CIB franchise over the past few years – CIB integration, acquired key skills, invested in technology

Client Intelligence Platform

Executive EySightTM

Consumer Goods Healthcare Public Sector Construction Financial Institutions Travel & Leisure PE/BEE Portfolio Mining & Chemicals Retail Automotives TFL (SOEs) Real Estate ICT TFL Energy & Water Diversified Industrials

Client centric approach CIB integration Acquired key skills

Investment banking

  • Head: Private Equity
  • Head: Principle & Alternative

Investments Markets

  • Head: Interest Rate Trading
  • Senior Bond Sales Trader
  • Head: Interest Rate Derivatives
  • Head: Structured Rates
  • Senior Equity Option trader
  • Head: xVA
  • Markets COO
  • Head: Equities

Property Finance

  • Executive: Property Finance
  • Head: Property Finance Africa

Investing in technology & innovation

Client data analytics Diversified, efficient & good credit quality

  • ROE: #2 (2nd highest, 20%)
  • Efficiency ratio: #1 (lowest, 41%)
  • Credit loss ratio: #1 (lowest, 1bps)
  • NIR to GOI contribution: 52% (49% in ‘13)

Holistic client experience & improved efficiencies (run-rate savings of R200m p.a.), driving improved returns

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NEDBANK GROUP LIMITED

… we are using our skills, expertise & technology to make a difference

As from 2018, excluding our existing commitments, we have undertaken not to provide project financing or other forms of asset-specific financing where the proceeds will be used to develop a new coal-fired power plant, regardless of country or technology.

3.8 7.1 11.6 15.2 18.4 35.0 2013 2014 2015 2016 2017 Total Renewable-energy disbursements (Rbn)

Round 1 - 3

  • Invested R3,8bn in empowerment

financing (R68bn since 2012).

  • Total investment in green buildings:

R8,7bn (well over 400 000 m² of floor space)

  • Student accommodation construction

loans > R1bn (~5 700 beds)

  • R10,1bn invested by clients in the

Nedbank Green Savings Bond (R25,2bn since inception). Sustainable development financing (in 2017)

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Share performance

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Our investment into Retail & Business Banking has been successful & is building momentum

6.2 7.7 4.6 6.1 2.2 2.8 8.8% 12.7% Total clients Main-banked clients Transactional clients

RBB retail client base (million)

Jun 2013 Jun 2018 +4.4% +5.8% +4.9% Primary bank market share1

Target: 15% by 2020

Note 1: 2013: AMPS; 2017: Consulta: Same question asked: ‘Which ONE bank do you regard as your main bank for personal banking?’

RBB interim financial results (6 months)

1403 2581 Jun 2013 Jun 2018 11.0% 18.6% ROE: Headline earnings (Rm): +13.0% CAGR

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NEDBANK GROUP LIMITED

Middle market main-banked client growth momentum accelerating, while growth in Youth & ELB improving

Main-banked, # 000

Kids & youth Entry level Middle Professional2 Business Banking1 H1 ’17 H1 ’13 Sep ‘18 629 761 853 +21% +12% 72 69 67 +3% +4% 328 371 383 +17% (3%) 20.6 20.6 20.9 H1 ‘17 H1 ‘13 Sep ‘18 0% +2% 1 378 1 123 1 374 +22% +4% Small Business Services2 116 112 91 +23% +3%

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Delivering great client experiences – digitised 61 services on the web & 53

  • n the app (target of >180 by 2020)

Money app launched in Nov 2017 with -

12 additional services

added in April 2018 And a further -

9 services added

in May 2018 An additional –

21 services landed between

June & July 2018

1.4 million downloads & > 500k active users in under 11 months since launch

Latest–

11 services landed

Aug, Sept 2018

Client app ratings – Android

4.4 4.3 4.2 4.2 3.6 3.6 3.4 3.4

Nedbank Wealth Capitec Nedbank Money FNB Nedbank App Suite Standard Absa Investec

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We are making a difference in the communities we operate

Remote solar powered branch SME network centre School ecosystem

  • Solar powered
  • WIFI-enabled
  • Low cost banking products, advice

& services

  • SIMPLYBIZ is resources, support &

network centre for small business

  • wners
  • GAP Access – innovative working capital

solution

  • CVP solution for students, parents, schools

& their suppliers providing digital payment solutions (Karri), insurance products, differentiated pricing & procurement platforms

  • More than 208 schools have signed up

since inception

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Rest of Africa business we developed a low cost cross-border transfer solution with Ecobank

African migrants

2.7m

Market size: Remittance value SA – Rest of Africa

R14−19bn

Through mobile/digital channels internationally

25%

Through international cash transfers

60%

Through traditional banking channels internationally

5%

Access & distribution Opportunity Differentiation 1

Lowest cost to client in the industry (no third parties)

Cheap

Instant cross border transfer – subject to regulatory & compliance checks (other solutions 10 min to 2 days)

Quick

Usage across all channels – initially account to account, mobile app & website. Moving to wallet, USSD, ATM, branches, etc Available in 33 countries 24 hours – initially business

  • perating hours, moving to

24/7

Easy

1 Key competing products include Mukuru, hello (PAISA), Western Union (BGA), MoneyGram (FNB & Standard Bank)

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Delivering our purpose through the SDGs

Our businesses (products & services) Partnerships Our own operations

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Making a difference through our own operations – remaining relevant in society

62% 26% 62% 16% 79% 47% 62% 30% AIC staff Black staff Female staff Black female staff 2007 2017

Transforming our workforce Progress on BBBEE

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Making a difference through our own operations – experiment, learn, lead & advocate

Seven green-star rated buildings Reducing our own carbon footprint

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Delivering our purpose through the SDGs

Our businesses (products & services) Partnerships Our own operations

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Partnerships – shared responsibility & collaborative action

An active corporate citizen Partnerships

  • Active participant in the CEO initiative
  • Committed R20m to R1,5bn SME fund
  • Participant in the Youth Employment

Service – aim to provide jobs to 1m South Africans (cost of c1.5% of NPAT p.a.)

  • Parliamentary presentations – Transformation

& Land Reform

  • Investing in our communities

− R168m SED spend in 2017 − Nedbank Foundation: >50% spend on education

  • Partnering with NGOs

− WWF water balancing & sustainable agriculture programmes

  • Nedbank affinity programme

− More than R250m donations since inception

  • Suppliers

− More than R9bn sourced from local suppliers (75% of R12bn)

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NEDBANK GROUP LIMITED

Agenda

  • Nedbank’s high-level ESG journey
  • Delivering our purpose & delivering on the SDGs (Environment & Social)
  • Through our businesses
  • Through our own operations
  • Through partnerships
  • Governance
  • Board profile – ensuring good governance
  • Worldclass disclosure
  • Engaging our shareholders
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Board composition as at 15 October 2018

7% 20% 73%

OML Nedbank Group Other

67% 20% 13%

Independent Executive Non-executive

27% 40% 27% 7%

African female African male White male non-SA

Independence of board (%) OML & Nedbank Group (nominees as % of board) Transformation (%) 53% 13% 27% 7%

0 - 3 years 4 - 6 years 7 - 9 years >9 years

Length of service (%)

8 10 9 10 8 11 10 4 3 3

Retail banking Investment banking Financial services/Insurance/Asset management HR/Strategic planning/Stakeholder management Accounting & auditing Large coporate/industrial Doing business in Africa/India Economics/Public policy/Macro policy Innovation/IT Mining & resources/Infrastructure

Board skills & expertise

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Worldclass disclosure

Integrated Report Financial reporting

  • Annual Results Booklet
  • Annual Financial Statements
  • Pillar 3 Risk & Capital Management Report
  • Our Defined Management Approach to Tax

(voluntary disclosure) Governance reporting

  • Governance and Ethics Review
  • Nedbank Group King IV Principles
  • Register of directors' attendance
  • Remuneration Report
  • AGM booklet & proxy voting

Sustainable development reporting

  • Sustainable Development Review
  • Transformation Report
  • Global Reporting Initiative Standards Index
  • Validating Our Sustainability Journey
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Engaging our shareholders

Outcomes Endorsement of Remuneration implementation policy (18 AGM) Purpose our annual governance/ ESG roadshow

99.4% 95.3% 81.3% 52.6% Nedbank Bank A Bank B Bank C

Topics of discussion (examples)

  • Strategic issues
  • Shareholder matters
  • Old Mutual managed separation
  • Board matters
  • New appointments & succession
  • Composition, skills & diversity
  • Independence
  • Remuneration
  • Mandatory audit firm rotation
  • Environmental & social matters

(incl transformation)

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NEDBANK GROUP LIMITED

Thank you

  • 16th Annual Oliver Empowerment Awards – 2017 Legend of Empowerment & Transformation award
  • 2018 EY Excellence in Integrated Reporting – overall winner.
  • 2017 The Trialogue CSI Handbook –ranked first by NGOs and 2nd by companies (impact of CSI work).
  • The 2017 Thomson Reuters Diversity & Inclusion Index – ranked 16th globally
  • Business Report, Empowerdex and Intellidex 2017 –recognised as the Most Empowered Company on the JSE
  • Carbon-neutral status – Africa’s first carbon-neutral financial organisation. Carbon neutral since 2010.
  • FTSE4Good Index – A global responsible investment index for companies that demonstrate strong environmental,

social and governance practices. Included in 2017.

  • Dow Jones World Sustainability Index 2017 – one of only 27 banks in the index & the only African bank. Included

for the 12th year.

  • SA Carbon Disclosure Project Index 2017 – One of only 106 companies globally to be awarded an ‘A’.
  • WWF Nedbank Green Trust partnership – Invested R264m since the trust’s inception in support of over 200

environmental projects throughout SA.

  • IRAS Sustainability Data Transparency Index – Highest score in the banking sector in 2017.