Nedbank Group - Audited Final Results 2012
Ref 17/13
25 February 2013
Old Mutual plc
NEDBANK GROUP - AUDITED FINAL RESULTS 2012
Nedbank Group Limited ("Nedbank Group"), the majority-owned South African banking subsidiary of Old Mutual plc, released its audited summarised financial results for the year ended 31 December 2012 today, 25 February 2013.
The following is the full text of Nedbank Group's announcement:
"NEDBANK GROUP LIMITED
Audited financial results for the year ended 31 December 2012
· Headline earnings increased 21,4% to R7 510m¹
· Diluted headline earnings per share up 19,0% to 1 595 cents¹
· Strong NIR growth of 12,4% to R17 324m¹
· ROE (excluding goodwill) increased to 16,4% (2011:15,3%)¹
· Common equity Tier 1 ratio increased to 11,4% (2011: 10,5%)
· Full-year dividend per share up 24,3% to 752 cents¹
'In a tough economic environment Nedbank Group's strong franchise and growth orientation together with the momentum built in the first half of the year resulted in the group delivering diluted headline earnings per share growth of 19,0%. This performance was achieved through strong revenue growth, an improved credit loss ratio and responsible expense management while strengthening the balance sheet and investing for growth.
We are committed to sustainable stakeholder delivery andcontributing to SA's development through our support of the National Development Plan objectives. In 2012 we created over 450 new permanent jobs in South Africa and our great-value banking offerings led to 655 000 more clients banking with Nedbank, taking the total number of clients who choose to bank with us above six million. We continue to lead in transformation as the JSE's most empowered large company under the Department of Trade and Industry codes, and to make a difference as South Africa's green bank.
Nedbank Group has strongly growing and diverse annuity income streams, a long-term record of disciplined expense management, a sound funding base, improving asset quality trends and higher coverage ratios, strong capital levels and stable management teams. These attributes, together with a multiyear focus on the importance of culture and values, position us well to continue to deliver to all our stakeholders in 2013 and to adapt to a volatile and challenging economic environment.'
Mike Brown
Chief Executive
Banking and economic environment
The global economic slowdown continued for most of 2012, with recessionary conditions in many advanced economies negatively affecting growth in leading emerging economies such as China, India and Brazil. Signs of improvement in various geographies emerged in the fourth quarter of the year, giving rise to cautious optimism that global economic conditions may stabilise and potentially start to improve in 2013.
The temporary aversion of the fiscal cliff in the United States of America was a key positive development and, together with the release of improved US housing, employment and credit data, added to the positive sentiment. In Europe the extraordinary actions by central bankers have significantly reduced tail risk in the Eurozone and declining bond yields have helped to ease fiscal pressure. Further uplift in sentiment came from China's producing a modest recovery in growth to just below 8% in the fourth quarter, after reporting a downward trend in growth for 10 successive quarters.
SA's gross domestic (GDP) is expected to have grown at around 2,5% in 2012 after expanding 3,1% in 2011. Concerns around the operating environment and infrastructure constraints, the widening current account deficit, rising national debt, higher inflation, high levels of unemployment and declining trends in competitiveness with wage settlements outpacing productivity were included in the rationale by international rating agencies, Moody's, Standard & Poor's and Fitch Ratings for the downgrade of SA's sovereign-debt rating, which in turn placed pressure on the rand. Domestic bond yields have, however, remained stable.
Households remained the primary driver of private sector credit demand, with the unexpected 50 basis points (bps) reduction in interest rates in July 2012 providing some relief for highly indebted consumers against rising electricity, food and fuel costs. Growth rates in unsecured lending are slowing as expected.
Corporate credit demand improved towards the end of the year as the recovery in public sector infrastructure spending supported industries producing capital goods and other inputs for local projects, although corporates on the whole remained cautious, constrained by a weak Eurozone and a relatively sluggish domestic economic environment.
Review of results
Nedbank Group made excellent progress in delivering on our strategic focus areas, producing a strong set of results for the year ended 31 December 2012 ('the year'). The results reflect an improvement in all key performance indicators and headline earnings growth in all business clusters.
Headline earnings grew21,4% to R7 510m (2011: R6 184m), driven by good revenue growth, an improving credit loss ratio (CLR) and responsible expense management while investing for growth.¹
Diluted headline earnings per share increased 19,0% to 1 595 cents (2011: 1 340 cents) and diluted earnings per share increased 18,4% to 1 588 cents (2011: 1 341 cents). In line with the earnings guidance range provided in the trading statement released on 20 February 2013, the group recorded headline earnings per share and basic earnings per share of 1 646 and 1 638 cents per share respectively.¹
The group generated economic profit (EP) of R1 511m, up 63,5% (2011: EP of R924m). The return on average ordinary shareholders' equity (ROE) excluding goodwill, increased to 16,4% (2011: 15,3%) and ROE increased to 14,8% (2011: 13,6%), with the return on assets (ROA) increasing to 1,13% (2011: 0,99%).¹
Nedbank Group is well capitalised, with our Basel II.5 common equity Tier 1 ratio at 11,4% (2011: pro forma Basel II.5 ratio 10,5%). With the introduction of Basel III on 1 January 2013, the pro forma Basel III common equity Tier 1 ratio at 31 December 2012 is a robust 11,6%. Funding and liquidity levels remained sound. Surplus liquidity buffers were maintained at a level of around R24bn and the average long-term funding ratio increased to 26,0% (2011: 25,0%) in the fourth quarter of 2012.
The net asset value per share continued to increase, growing 9,7% to 11 798 cents at 31 December 2012 (2011: 10 753 cents).¹
Delivering sustainably to all our stakeholders
The group has developed a strategic framework that will enable delivery of our vision of building Africa's most admired bank by all our stakeholders and assist in creating a vibrant and flourishing SA through appropriate alignment of our activities with the National Development Plan (NDP). This is underpinned by a firm belief that our long-term success is inextricably linked to our ability to fulfil our social purpose.
We are committed to delivering sustainable value to all our stakeholders as demonstrated by the following highlights for 2012:
· For staff - creating over 450 new permanent jobs in SA, investing R352m in the development of our staff and supporting more than 1 300 managers through our personal mastery and team effectiveness programme known as 'Leading for Deep Green' and 8 500 staff through our Batho Pele diversity programme. This focus on values-based behaviour has led to higher levels of staff morale and an ongoing positive shift in corporate culture, now measuring at world-class levels.
· For clients - paying out R144bn in new loans up 24,1% on 2011; launching various market-leading innovations such as the Nedbank App SuiteTM, MyFinancialLifeTM, Small Business FridayTM in association with the National Small Business Chamber, cash management solutions and longer-term deposit products; providing great-value banking and saving clients R163m through the use of bundled products; increasing our footprint by 80 net new staffed outlets and 476 net new ATMs; and achieving multiyear highs in client satisfaction as measured by Net Promoter Scores across the group. As a result, more clients chose to bank with Nedbank, resulting in a net gain of 655 000 new retail clients in the year, including 377 000 entry-level banking clients, 165 000 middle-market clients, 1 113 high-net-worth clients, 775 and 27 new business banking and corporate primary-banked clients, respectively. Nedbank was recognised by Euromoney as the best bank in South Africa in 2012.
· For shareholders - delivering R1 511m EP, generating a 34,3% total shareholder return and a total dividend increase of 24,3%, as well as maintaining excellence in transparency and reporting as acknowledged by numerous reporting awards. We have created an opportunity for shareholders to participate in the Africa growth story through our rights to acquire 20% in Ecobank Transnational Incorporated (ETI).
· For regulators - increasing capital levels further and being well positioned for the implementation of Basel III on 1 January 2013 and the Solvency Assessment and Management regime on 1 January 2015, making cash taxation contributions of R6,2bn relating to direct, indirect and other taxation and supporting the National Treasury in our actions and commitments to responsible banking practices. Our credit rating was upgraded by Fitch in July 2012, while the five largest SA banks were downgraded in January 2013 following the downgrade of the SA sovereign-risk rating.
· For communities - making banking more accessible and affordable for the entry-level market and rural communities; identifying numerous non-urban areas for footprint expansion; increasing staffed outlets and ATMs by over 48% and 74% respectively since the beginning of 2009. To date we have donated more than R200m to charities through our innovative card affinity programmes, and in 2012 we contributed R116m to socioeconomic development. The group achieved Department of Trade and Industry (dti) code level 2 for the fourth consecutive year and was ranked first overall among the top 50 JSE-listed companies in the Financial Mail/Empowerdex Top Empowered Companies survey. Furthermore 75,5% of our procurement was sourced locally. Our leadership role in environmental sustainability was demonstrated by initiatives such as funding a large percentage of SA's renewable-energy programme and the introduction of Nedbank's Green Savings Bond, the value of which has increased to R866m since its launch. We maintained our carbon-neutral status and received the Financial Times 2012 Sustainable Bank of the Year for Africa and the Middle East award as well as African Business Environmental Sustainability in Africa 2012 award.
Cluster performance
Our business clusters generated an increased ROE of 17,9% (2011: 17,1%) and headline earnings growth of 16,3%, with all line clusters delivering good performances.¹
|
|
% change |
Headline earnings (Rm) |
ROE (%) |
||
|
|
|
2012 |
2011 |
2012 |
2011* |
|
Nedbank Capital |
16,3 |
1 428 |
1 228 |
25,4 |
22,6 |
|
Nedbank Corporate** |
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** |
|
53 |
(226) |
|
|
|
Total |
21,4 |
7 510 |
6 184 |
14,8 |
13,6 |
* Restated for enhancements to capital allocation methodologies implemented in 2012.
** 2011 restated for the transfer of the Rest of Africa division from Nedbank Corporate to the centre.
Strong earnings growth of 16,3% and the 25,4% ROE in Nedbank Capital were driven by good asset growth and pipeline conversion in investment banking, together with strong performance from global markets that resulted in materially increased structuring and trading income. The cluster's CLR improved, although remaining above its through-the-cycle range.
Nedbank Corporate performed well, producing good earnings growth of 15,7% and an ROE of 22,5%, underpinned by increased cash and electronic banking volumes, a strong delivery from the listed-property investment portfolio and favourable deposit growth. This performance was achieved within a well-managed impairment and expense environment across the businesses.
Nedbank Business Banking achieved headline earnings growth of 9,0% to R944m through maintaining quality client relationships and outstanding risk management practices, as reflected in the CLR of 0,34% (2011: 0,53%). Good underlying momentum was noted in asset payouts, deposits and new client gains, notwithstanding the protracted challenges facing the small- and medium-enterprise (SME) sector in SA, which resulted in EP for the year of R368m and a sustained high ROE of 21,5%.¹
Nedbank Retail's momentum is reflected in the 22,0% headline earnings growth and ROE improvement to 12,1%, narrowing the gap in relation to the cost of equity. This is testimony to the excellent progress strategically and financially in repositioning the cluster. The embedding of sound risk practices is reflected in the CLR of 2,01% (2011: 1,98%) remaining within the through-the-cycle range, while continuing to reduce defaulted loans and strengthen balance sheet impairments.¹ Investment in distribution and distinctive client value propositions is yielding strong client gains and related transactional, deposit and lending volumes.
Nedbank Wealth continued to record sound earnings growth of 9,5% and an excellent ROE of 29,6%, supported by solid performance in the asset management and insurance businesses.¹ These results were achieved despite pressure on impairments, a considerable deterioration in the short-term insurance claims environment in the second half of 2012 and the R31,5m (post-tax) rebranding costs relating to the launch of our new single high-net-worth offering, Nedbank Private Wealth.
The centre produced a small profit in 2012 from a loss of R226m in 2011, largely as a result of the R200m portfolio impairment provision recognised at group level in the prior year. The Rest of Africa division, now included in the centre, delivered a strong increase in headline earnings of 35,2%.¹
Detailed segmental information is available on the group's website at www.nedbankgroup.co.za under the 'Financial information' section.
Financial performance
Net interest income
Net interest income (NII) increased 9,1% to R19 680m (2011: R18 034m)¹ and average interest-earning banking assets grew 7,5% (2011 growth: 5,1%).
The net interest margin (NIM) increased to 3,53% from the restated 3,48%* level achieved in 2011. The margin expansion reflects the ongoing benefits of risk-adjusted pricing of new advances and portfolio-tilt-driven changes in the asset and deposit mix, partially offset by:
· the negative endowment effect of lower average interest rates in 2012;
· the cost of lengthening the group's funding profile; and
· the cost of carrying higher levels of lower-yielding liquid assets as the group prepared for the implementation of Basel III liquidity coverage ratios.
* Restated from 3,46% to exclude clients' indebtedness for acceptances from interest-earning banking assets to align with the rest of the industry.
Impairments
Lower levels of impairments at R5 199m (2011: R5 331m) were reported. The CLR improved to 1,05% for the year (2011: 1,13%), remaining above the group's through-the-cycle range of 60 to 100 basis points.¹
|
CLR analysis (%) |
Dec 2012¹ |
H2 |
H1 2012 |
Dec 2011¹ |
|
Specific impairments |
0,91 |
0,84 |
1,00 |
1,01 |
|
Portfolio impairments |
0,14 |
0,16 |
0,11 |
0,12 |
|
Total CLR |
1,05 |
1,00 |
1,11 |
1,13 |
Given the levels of overall consumer indebtedness, credit risk management remained a strong area of focus. The reduction in specific impairments to 0,91% (2011: 1,01%) was driven by a 17,0% decrease in defaulted advances to R19 273m (2011: R23 210m), while further strengthening the portfolio impairments charge to 0,14% (2011: 0,12%) mainly on the performing personal loans, Motor Finance Corporation (MFC) and homeloans books.
The increased level of portfolio impairments was mainly as a result of further model conservatism and book growth in personal loans as well as the lengthening of the emergence period in the MFC book. The group retained the R200m central portfolio provision set aside last year for unknown events that may have already occurred but which will only be evident in the future. The total impairment coverage ratio increased to 56,4% (2011: 49,5%), largely due to asset mix changes in the group's banking book.
Our collections processes, enhanced by additional collections staff and more effective collections processes, generated a 35,1% increase in bad-debt recoveries amounting to R866m (2011: R641m).
|
CLR (%) |
Dec 2012¹ |
H2 2012 |
H1 |
Dec 2011¹ |
Through-the-cycle target ranges |
|
Nedbank Capital |
1,06 |
0,72 |
1,41 |
1,23 |
0,10 - 0,55 |
|
Nedbank Corporate |
0,24 |
0,18 |
0,30 |
0,29 |
0,20 - 0,35 |
|
Nedbank Business Banking |
0,34 |
0,28 |
0,41 |
0,53 |
0,55 - 0,75 |
|
Nedbank Retail |
2,01 |
2,02 |
2,00 |
1,98 |
1,50 - 2,20 |
|
Nedbank Wealth |
0,61 |
0,76 |
0,46 |
0,25 |
0,20 - 0,40 |
|
Group |
1,05 |
1,00 |
1,11 |
1,13 |
0,60 - 1,00 |
CLRs in the wholesale clusters improved in the second half of the year. Nedbank Retail's CLR was maintained within its through-the-cycle range and at levels similar to those in the first six months of the year, reflecting the effect of asset mix changes as unsecured lending attracts higher levels of impairments than secured lending. Nedbank Wealth's CLR deteriorated mainly due to the impact of a subdued property market.
Non-interest revenue
The continued investment in the Nedbank franchise contributed to strong NIR growth of 12,4% to R17 324m (2011: R15 412m), lifting the ratio of NIR to expenses to 84,4% (2011: 81,5%), close to the group's medium-to-long-term target of > 85,0%.¹ The group has delivered compound growth in NIR, excluding fair-value adjustments, of 11,0% over a four-year period.
Commission and fee income increased by R1,5bn, rising by 13,7% to R12 538m (2011: R11 031m) on the back of increased activity in the transactional banking, card, personal loans, investment banking and advisory activities of the group.¹
Insurance income grew strongly, increasing 24,9% to R1 695m (2011: R1 357m) from good insurance sales and underwriting performance, notwithstanding the poor weather conditions and fire-related claims in the second half of the year.¹
Favourable market conditions and good performance in the trading business, notably in fixed-income delivered excellent trading income growth of 22,0% to R2 644m (2011: R2 168m). Realisations and dividends received in Nedbank Corporate property and Nedbank Capital investment portfolios generated R211m (2011: R323m) in private equity income.¹
Negative fair-value adjustments of R265m (2011: R60m loss)¹ were recognised mainly as a result of basis risk on centrally hedged positions, accounting mismatches in hedged portfolios, including fixed-rate retail deposits and personal loans, and credit spread unwind on certain of Nedbank's Tier 2 debt.
Following the scheduled termination of the contract with Swisscard that previously housed the Tando card processing operations, NIR was negatively impacted as no further revenue was generated in 2012 (2011: R214m).
Expenses
Nedbank's strong cost management culture remains a key differentiator and contributed to a lower level of expense growth for 2012 in line with guidance.
Expenses increased 8,5% to R20 528m (2011: R18 919m)¹, consisting of 4,1% for business-as-usual activities, 2,1% for investing in growth initiatives and 2,3% for variable compensation.
Growth in expenses was primarily from:
· Staff-related expenses increasing 11,2% and comprising:
- remuneration and other staff cost growth of 8,5%, following inflation-related annual increases averaging 6,5% and 0,9% headcount growth;
- short-term incentive costs increasing 18,7% driven by 21,4% headline earnings and 63,5% EP growth; and
- long-term incentive costs increasing by 71,4% as 2011 contained a higher reversal of costs when corporate performance targets were not met and related incentive awards lapsed.
· Volume-driven costs, such as fees and computer processing costs, continuing to grow in support of revenue-generating business activities.
· Investing for growth initiatives, including footprint rollout, headcount growth in frontline and collections staff, new innovative offerings and enhancements in product and system functionality.
The efficiency ratio improved to 55,5% (2011: 56,6%),¹ absorbing the negative impact of the interest rate cut in July on endowment and consequently NII growth.
Since 2007 Nedbank Group's five-year compound NIR growth of 10,6% exceeded the related compound expense growth of 8,8%.
Taxation
The tax charge increased 30,9% to R2 871m (2011: R2 194m), with the effective tax rate increasing to 26,8% (2011: 25,2%)¹. The increase resulted mainly from lower levels of dividend income received and an increase in capital gains tax (CGT) rate from 14,0% to 18,65%.
Statement of financial position
Capital
The group's capital ratios strengthened during the year, positioning the organisation favourably for the adoption of Basel III that was successfully implemented on 1 January 2013. All capital adequacy ratios remained well above the Basel II.5 minimum regulatory capital requirements and the group's new Basel III internal target ranges. The group's strong capital position enabled the redemption of a further R1,8bn Tier 2 subordinated debt during 2012 in line with our capital management planning and positioning for Basel III.
In August 2012 the group obtained approval from the South African Reserve Bank (SARB) to manage the MFC book on its Advanced Internal Ratings-based Credit Approach. The resultant reduction in risk-weighted assets, along with good earnings growth, contributed to further strengthening of the Basel II.5 common equity Tier 1 ratio to 11,4%.
The group reset its internal targets in line with the new SA Basel III regulations based on the increased minimum regulatory requirements for common equity Tier 1 in 2019, and Tier 1 and total ratios in 2015.
The new internal targets include a conservative management buffer and allowance for potential Pillar 2B bank-specific add-ons while taking cognisance of anticipated Basel III capital levels in other jurisdictions, the view of rating agencies and Nedbank's Internal Capital Adequacy Assessment Process. The Basel III regulatory minimums include minimum regulatory requirements for common equity Tier 1 in 2019, Tier 1 and total ratios in 2015 as well as a conservative Pillar 2B add-on, but exclude any countercyclical capital buffer requirements.
|
|
Dec 2012 (Pro forma Basel III) |
Dec 2012 (Basel II.5) |
Dec 2011 (Basel II.5) |
Internal target range (Basel III) |
Regulatory minimum (Basel III) |
|
Common equity Tier 1 ratio |
11,6% |
11,4% |
10,5% |
10,5% - 12,5% |
9,00% |
|
Tier 1 ratio |
13,1% |
12,9% |
12,0% |
11,5% - 13,0% |
11,25% |
|
Total capital ratio |
15,1% |
14,9% |
14,6% |
14,0% - 15,0% |
13,50% |
(Ratios calculated include unappropriated profits.)
The group's ratios are anticipated to continue improving in 2013, driven by projected earnings growth and the portfolio tilt strategy.
Further detail on capital and risk management will be available in the risk and balance sheet management review section of the group's analyst booklet and the Pillar 3 Report to be published at the end of March 2013 on the website at www.nedbankgroup.co.za.
Capital allocation to the businesses
As reported during our 2012 interim results, economic capital allocated to the business clusters was revised from 10,0% to 11,0% to align the businesses with the higher operating capital levels held by the group under Basel III and the allocation of capital impaired against certain intangible assets, previously held at the centre. The upward revision of capital allocated to the clusters resulted in a dilution of the clusters' ROE performance, given higher capital levels. Headline earnings and ROE numbers for the business clusters for 2011 were restated on a like-for-like basis. These enhancements had no impact on the group's overall headline earnings, capital levels and ROE.
Funding and liquidity
Nedbank Group remains well funded with a strong liquidity position and a lengthened funding profile, with the fourth-quarter average long-term funding ratio increasing further to 26,0% (2011:25,0%).
In addition to launching a number of competitive and innovative savings and investment products for the retail market, the following funding strategies were implemented during the year:
· Issuing of R3,2bn of senior unsecured debt with a tenure ranging from three to seven years.
· Issuing of R1,8bn through the Greenhouse securitisation programme with tenure of up to five years;
· Maintaining a significant surplus liquidity buffer in excess of R24,0bn.
· Improving the group's sources of quick liquidity to R107,5bn (2011: R103,6bn).
In May the SARB announced that banks would be able to include cash reserves in the calculation of the liquidity coverage ratio (LCR), and the SARB would make available a committed liquidity facility (CLF) of up to 40% of the LCR requirements. Taking into account Nedbank's cash reserves, the liquid assets held for regulatory purposes, the surplus liquidity buffer and the notional ability to access the CLF, Nedbank would be compliant with the Basel III LCR on a pro forma basis at 31 December 2012.
This was further supported by amendments to the LCR by the Basel Committee on Banking Supervision (BCBS) on 6 January 2013, which are likely to be adopted by the SA regulator. These amendments are positive in that they:
· allow for a longer lead time to implement the LCR, starting from 60% (previously 100%) in January 2015 and increasing to 100% in January 2019;
· result in a broader definition of qualifying high-quality liquid assets (HQLA); and
· reduce HQLA requirements given refinements to various cash outflow assumptions in the LCR formula.
The revisions to the LCR will be beneficial for banks, with associated cost savings and more time to implement the LCR.
Having finalised the LCR, the BCBS is now expected to focus on the net stable funding ratio (NSFR). The impact of NSFR compliance by SA and most banking industries worldwide would be punitive if implemented as currently set out in the draft requirements, significantly impacting both global and domestic economic growth and job creation. Structural constraints within SA financial markets will add further challenges to domestic compliance with the NSFR. The SARB and National Treasury, in conjunction with the financial services industry, are engaging proactively during the observation period prior to implementation in order to address any unintended consequences for SA. It is anticipated, based on extensive global discussion and the experiences gained from the LCR implementation process, that a fundamental revision and a pragmatic approach will be applied to the NSFR well in advance of its proposed implementation in 2018.
Loans and advances
Loans and advances grew 5,6% to R527bn (2011: R499bn), with strong growth in trading advances of 49,2%. Excluding trading advances, banking advances growth of 3,8% was largely underpinned by advances growth in Nedbank Capital and Nedbank Retail.¹
Loans and advances by cluster at year-end are as follows¹:
|
Rm¹ |
Dec |
Dec 2011¹ |
% change |
|
Nedbank Capital |
82 494 |
68 510 |
20,4 |
|
Banking activity |
52 732 |
48 558 |
8,6 |
|
Trading activity |
29 762 |
19 952 |
49,2 |
|
Nedbank Corporate |
162 730 |
157 271 |
3,5 |
|
Nedbank Business Banking |
60 115 |
58 856 |
2,1 |
|
Nedbank Retail |
190 647 |
183 748 |
3,7 |
|
Nedbank Wealth |
19 864 |
19 624 |
1,2 |
|
Other |
11 316 |
11 014 |
2,7 |
|
|
527 166 |
499 023 |
5,6 |
Nedbank Capital's banking advances growth was driven by the successful conversion of its robust investment banking pipeline and increased trading advances as the interbank funding desk experienced significantly better market conditions than in the year before. Nedbank Corporate recorded favourable growth in term loans and commercial mortgages of 8,4% and 5,3% respectively, while reducing the levels of lower-yielding overnight loans. Continuing pressure in the SME environment saw Nedbank Business Banking's clients defer expansion plans, deleverage further and transact less, which - together with judicious risk management - kept advances growth to 2,1%. Retail's advances growth came from strong gains in cards of 16,1% (2011: 9,2%) and in MFC of 10,3% (2011: 9,7%), while tightening criteria resulted in personal loans growing at a reduced rate of 28,7% (2011: 36,5%). Low consumer demand for homeloans in conjunction with selective advances growth and the rolloff of the backbook led to a 5,5% reduction in the retail homeloans book, with origination through our own client relationships and channels being emphasised.
Deposits
Deposits grew by a healthy 5,1% to R551bn (2011: R524bn), maintaining a strong loan-to-deposit ratio of 95,7% (2011: 95,2%).¹
The lengthening of the funding profile was primarily due to ongoing growth in call and term deposits of 9,9% and fixed deposits of 8,2% as a result of a strong uptake in the Retail Savings Bond of R3,3bn and wholesale deposit offerings such as Corporate Saver. Cash management deposits grew 7,5%, boosted by net primary banking client gains, whereas the more volatile negotiable certificate of deposit (NCD) category decreased 21,4%.
Current and savings accounts grew well, increasing 7,9% and 9,3% respectively, underpinned by Nedbank's strong franchise. Altogether, these improvements in the funding profile ensured that Nedbank continued to hold a higher proportion of household deposits relative to the size of our retail bank.
However, strong competition for deposits in 2012 resulted in some loss of overall market share in household deposits. The launch of innovative new deposit products such as Nedbank Money Trader, increasing functionality on our world-class internet and mobile banking applications, and various other initiatives will contribute to growing the transactional client base and positioning Nedbank strongly for sustainable growth in savings and investment deposits.
Group strategic focus
The Nedbank Group strategy is outward-looking, with a focus on growing the franchiseand delivering on its key strategic initiatives of repositioning Nedbank Retail, growing NIR, implementing the portfolio tilt strategy and expanding into the rest of Africa.
· Nedbank Retail is allocated 39,1% of the group's capital and its strategic repositioning will contribute significantly to ongoing improvements in the group's performance. While endeavouring to leverage early turnaround gains to achieve an ROE at or above the cost of equity (COE) of 13% by the end of 2013, a year ahead of the original 2014 target, the deteriorating credit health of consumers noted in the last quarter of 2012 could make this challenging to deliver. Continued excellent progress was made in positioning Nedbank Retail as a more client-centred and integrated business while maintaining growth momentum in the underlying businesses, growing the number and quality of clients, embedding effective risk management practices and strengthening balance sheet impairments.
· The group's NIR-to-expenses ratio target of > 85% is a key focus area as we continue to deliver good-quality annuity income through commission and fee growth from primary-client gains, volume growth, new innovative products and cross-sell. In our technology division we enabled greater efficiencies, including the rationalisation of 20 banking systems and the reduction of our servers from 3 500 to 1 139 since 2009.
· The portfolio tilt strategy continued to gain traction, supporting EP growth from R57m in 2009 to R1 511m in 2012. Excellent growth in 2012 in commission and fee income of 13,7%, insurance income of 24,9%, assets under management of 34,1% and deposits of 5,1%, while emphasising profitable secured lending, demonstrates the benefit of focusing on these strategically important EP-rich, lower-capital and liquidity-consuming activities.
· In the short to medium term the group's primary focus on SA and the Southern African Development Community (SADC) area continues to benefit the group as this region has the largest EP pool for financial services in sub-Saharan Africa. The rights to acquire a shareholding of up to 20% in ETI in less than two years creates a path to provide a significant benefit to Nedbank's clients in the rest of Africa and the opportunity for shareholders to gain access to the higher economic growth in the rest of Africa in a prudent yet substantive manner.
Economic outlook
Despite a more promising start to many financial markets in 2013, there appears to be downside risk in most developed and many emerging-market economies, and forward visibility is limited.
SA's GDP is forecast to grow by 2,6% in 2013. Interest rates are likely to remain lower for longer and are expected to be unchanged through most of 2013.
Consumer indebtedness is anticipated to ease gradually, but remains high compared with historical levels, particularly with 39-year-low interest rates. This, combined with the lack of job security, is expected to limit the growth in demand for housing and other secured loans. Growth rates in unsecured lending are expected to continue to moderate.
Uncertainty is likely to continue to affect the level of business confidence and contain capital expenditure and growth in wholesale assets in the private sector. Government and public corporations are forecast to escalate their infrastructure spending, which should contribute to improved wholesale advances growth.
Prospects
In the context of the anticipated economic environment and continued low interest rates in SA, the group's guidance for 2013 is as follows:
· Advances to grow at mid to upper single digits.
· NIM to remain at levels similar to those in 2012.
· The CLR to continue improving into the upper end of the group's through-the-cycle target range.
· NIR (excluding fair-value adjustments) to grow at low double digits, and allow the group to meet the medium-to-long-term NIR-to-expenses target of > 85%.
· Expenses to increase by mid to upper single digits.
The group's medium-to-long-term targets remain unchanged, with the exception of revised targets relating to capital adequacy and dividend cover following finalisation of the SARB's revised guidelines on Basel III capital levels and the new dividend tax regime in SA announced during the year.
|
Metric |
2012 performance |
Medium-to-long-term targets |
2013 outlook |
|
|
ROE (excluding goodwill) |
16,4% |
5% above cost of ordinary shareholders' equity |
Improving, remaining below target. |
|
|
Growth in diluted headline earnings per share |
19,0% |
≥ Consumer price index + GDP growth + 5% |
Meet target. |
|
|
CLR |
1,05% |
Between 0,6% and 1,0% of average banking advances |
Improving into upper end of target. |
|
|
NIR-to-expenses ratio |
84,4% |
> 85% |
Improving to meet the target. |
|
|
Efficiency ratio |
55,5% |
< 50,0% |
Improving, remaining above target. |
|
|
Common equity Tier 1 capital adequacy ratio (Basel III) |
11,6% |
10,5% to 12,5% |
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 |
2,19 times |
1,75 to 2,25 times |
1,75 to 2,25 times |
|
Shareholders are advised that these forecasts have not been reviewed or reported on by the group's auditors.
Board and executive changes
The group previously advised that Alan Knott-Craig resigned as independent non-executive director with effect from 24 February 2012.
Professor Brian de Lacy Figaji retired as independent non-executive director of Nedbank Group and Nedbank Limited with effect from 4 May 2012.
Ian David Gladman was appointed as non-executive director of Nedbank Group and Nedbank Limited with effect from 7 June 2012.
Wendy Lucas-Bull resigned as independent non-executive director of Nedbank Group and Nedbank Limited with effect from 5 November 2012.
Gawie Nienaber retired as Group Company Secretary with effect from 30 June 2012 after reaching the mandatory retirement age in terms of Nedbank Group's normal retirement policy. Thabani Jali was appointed as Group Company Secretary and Jackie Katzin was appointed as Deputy Group Company Secretary of Nedbank Group and Nedbank Limited with effect from 1 July 2012.
Appreciation
The performance of the past year highlights the quality of management and leadership and the depth of talent within the group. We are continually striving to exceed the expectations of our stakeholders, and wish to thank all of you for your guidance, support and commitment in ensuring that the group continues to deliver across the social, economic, environmental and cultural pillars of sustainability. Your contribution is highly valued as we continue building Africa's most admired bank.
Accounting policies¹
Nedbank Group Limited is a company domiciled in SA. The summarised consolidated annual financial results of the group at and for the year ended 31 December 2012 comprise the company and its subsidiaries (the 'group') and the group's interests in associates and jointly controlled entities.
Nedbank Group's principal accounting policies have been prepared in terms of International Financial Reporting Standards (IFRS) of the International Accounting Standards Board and have been applied consistently over the current and prior financial years, except for clients' indebtedness for acceptances and liabilities for acceptances that have been reclassified to loans and advances, and amounts owed to depositors respectively in order to achieve improved comparability with the majority of the group's SA banking peers. These items were previously separately disclosed in the group's statement of financial position. Nedbank Group's summarised consolidated annual financial results have been prepared in accordance with the recognition and measurement criteria of IFRS, interpretations issued by the IFRS Interpretations Committee, and the presentation and disclosure requirements with International Accounting Standard (IAS) 34: Interim Financial Reporting and the Financial Reporting Guide as issued by the Accounting Practices Board, the JSE Listing Requirements and the requirements of the Companies Act of South Africa.
In the preparation of these consolidated annual financial results, the group has applied key assumptions concerning the future and other inherent uncertainties in recording various assets and liabilities. The assumptions applied in the financial results for the year ended 31 December 2012 were consistent with those applied during the 2011 financial year. These assumptions are subject to ongoing review and possible amendments. The financial results have been prepared under the supervision of Raisibe Morathi, the group's Chief Financial Officer.
Events after the reporting period¹
There are no material events after the reporting period to report on.
Audited results - auditors' report
KPMG Inc and Deloitte & Touche, Nedbank Group's independent auditors, have audited the consolidated annual financial results of Nedbank Group Limited from which the summarised consolidated financial results have been derived, and have expressed an unmodified audit opinion on the consolidated annual financial statements. The summarised consolidated annual financial results comprise the consolidated statement of financial position at 31 December 2012, consolidated statement of comprehensive income, condensed consolidated statement of changes in equity and condensed consolidated statement of cashflows for the years then ended and selected explanatory notes. The related notes are marked with ¹. The audit report is available for inspection at Nedbank Group's registered office.
Forward-looking statements
This announcement contains certain forward-looking statements with respect to the financial condition and results of operations of Nedbank Group and its group companies that, by their nature, involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future. Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, global, national and regional economic conditions; levels of securities markets; interest rates; credit or other risks of lending and investment activities; as well as competitive and regulatory factors. By consequence, all forward-looking statements have not been reviewed or reported on by the group's auditors.
Final dividend declaration
Notice is hereby given that a gross final dividend of 412 cents per ordinary share has been declared, payable to shareholders for the year ended 31 December 2012. The dividend has been declared out of income reserves.
The dividend will be subject to a dividend withholding tax rate of 15% (applicable in South Africa) or 61,8 cents per ordinary share, resulting in a net dividend of 350,2 cents per ordinary share, unless the shareholder is exempt from paying dividend tax or is entitled to a reduced rate in terms of an applicable double-tax agreement. No Secondary Tax on Companies (STC) credits were available to be utilised as part of this declaration. Nedbank Group Limited's tax reference number is 9375/082/71/7 and the number of ordinary shares in issue at the date of declaration is 507 509 491.
In accordance with the provisions of Strate, the electronic settlement and custody system used by JSE Limited, the relevant dates for the dividend are as follows:
|
Event |
Date |
|
Last day to trade (cum dividend) |
Wednesday, 27 March 2013 |
|
Shares commence trading (ex dividend) |
Thursday, 28 March 2013 |
|
Record date (date shareholders recorded in books) |
Friday, 5 April 2013 |
|
Payment date |
Monday, 8 April 2013 |
Share certificates may not be dematerialised or rematerialised between Thursday, 28 March 2013 and Friday, 5 April 2013, both days inclusive.
On Monday, 8 April 2013, the dividend will be electronically transferred to the bank accounts of all certificated shareholders where this facility is available. Where electronic funds transfer is either not available or not elected by the shareholder, cheques dated Monday, 8 April 2013, will be posted on that date.
Holders of dematerialised shares will have their accounts credited at their participant or broker on Monday, 8 April 2013.
The above dates and times are subject to change. Any changes will be published on the Securities Exchange News Service (SENS) and in the press.
For and on behalf of the board
Dr Reuel J Khoza Michael WT Brown
Chairman Chief Executive
25 February 2013
Registered office
Nedbank Group Limited, Nedbank Sandton, 135 Rivonia Road, Sandown, Sandton, 2196.
PO Box 1144, Johannesburg, 2000.
Transfer secretaries in SA
Computershare Investor Services (Pty) Limited, 70 Marshall Street, Johannesburg, 2001, SA.
PO Box 61051, Marshalltown, 2107, SA.
Transfer secretaries in Namibia
Transfer Secretaries (Pty) Limited, Shop 8, Kaiserkrone Centre, Post Street Mall, Windhoek, Namibia.
PO Box 2401, Windhoek, Namibia.
Directors
Dr RJ Khoza (Chairman), MWT Brown* (Chief Executive), TA Boardman, TCP Chikane, GW Dempster* (Chief Operating Officer), MA Enus-Brey, ID Gladman (British), DI Hope (New Zealand), PM Makwana, NP Mnxasana, RK Morathi* (Chief Financial Officer), JK Netshitenzhe, JVF Roberts (British), GT Serobe, MI Wyman** (British).
* Executive ** Senior independent non-executive director
Company Secretary: TSB Jali
Reg No: 1966/010630/06
JSE share code: NED
NSX share code: NBK
ISIN: ZAE000004875
Sponsors in SA: Merrill Lynch South Africa (Pty) Limited
Nedbank Capital
Sponsor in Namibia: Old Mutual Investment Services (Namibia) (Pty) Limited
This announcement is available on the group's website at www.nedbankgroup.co.za, together with the following additional information:
· Detailed financial information in HTML and PDF formats.
· Financial results presentation to analysts.
· Link to a webcast of the presentation to analysts.
For further information kindly contact Nedbank Group Investor Relations at nedbankgroupir@nedbank.co.za.
|
Financial highlights |
|||
|
at |
|
|
|
|
|
|
Audited |
Audited |
|
|
|
31 December |
31 December |
|
2012 |
2011 |
||
|
Statistics |
|
|
|
|
Number of shares listed |
m |
507.5 |
507.4 |
|
Number of shares in issue, excluding shares held by group entities |
m |
457.3 |
455.2 |
|
Weighted average number of shares |
m |
456.3 |
452.9 |
|
Diluted weighted average number of shares |
m |
470.7 |
461.5 |
|
Preprovisioning operating profit |
Rm |
15,580 |
13,709 |
|
Economic profit * |
Rm |
1,511 |
924 |
|
Headline earnings per share |
cents |
1,646 |
1,365 |
|
Diluted headline earnings per share |
cents |
1,595 |
1,340 |
|
Ordinary dividends declared per share |
cents |
752 |
605 |
|
- Interim |
cents |
340 |
265 |
|
- Final |
cents |
412 |
340 |
|
Ordinary dividends paid per share |
cents |
680 |
533 |
|
Dividend cover |
times |
2.19 |
2.26 |
|
Net asset value per share |
cents |
11,798 |
10,753 |
|
Tangible net asset value per share |
cents |
10,065 |
9,044 |
|
Closing share price |
cents |
18,800 |
14,500 |
|
Price/earnings ratio |
historical |
11.4 |
10.6 |
|
Market capitalisation |
Rbn |
95.4 |
73.6 |
|
Number of employees * |
|
28,748 |
28,494 |
|
Key ratios (%) |
|
|
|
|
Return on ordinary shareholders' equity (ROE) |
|
14.8 |
13.6 |
|
ROE, excluding goodwill |
|
16.4 |
15.3 |
|
Return on total assets (ROA) |
|
1.13 |
0.99 |
|
Net interest income to average interest-earning banking assets |
|
3.53 |
3.48 |
|
Credit loss ratio - banking advances |
|
1.05 |
1.13 |
|
Non-interest revenue to total operating expenses |
|
84.4 |
81.5 |
|
Non-interest revenue to total income |
|
46.8 |
46.1 |
|
Efficiency ratio |
|
55.5 |
56.6 |
|
Efficiency ratio (excluding BEE transaction expenses) |
|
55.3 |
56.0 |
|
Effective taxation rate |
|
26.8 |
25.2 |
|
Group capital adequacy ratios (including unappropriated profits): ** |
|
|
|
|
Common equity Tier I * |
|
11.4 |
11.0 |
|
Tier 1 * |
|
12.9 |
12.6 |
|
Total * |
|
14.9 |
15.3 |
|
Statement of financial position statistics (Rm) |
|
|
|
|
Total equity attributable to equity holders of the parent |
|
53,950 |
48,946 |
|
Total equity |
|
57,730 |
52,685 |
|
Amounts owed to depositors |
|
550,878 |
524,130 |
|
Loans and advances |
|
527,166 |
499,023 |
|
- Gross |
|
538,037 |
510,520 |
|
- Impairment of loans and advances |
|
(10,871) |
(11,497) |
|
Total assets administrated by the group |
|
833,474 |
760,358 |
|
Total assets |
|
682,979 |
648,127 |
|
Assets under management |
|
150,495 |
112,231 |
|
Life assurance embedded value |
|
2,030 |
1,522 |
|
Life assurance value of new business |
|
563 |
409 |
|
|
|
|
|
|
* These amounts and ratios have not been audited by the group's independent auditors. |
|||
|
** 2012 ratios are disclosed based on Basel II.5 (2011: Basel II). |
|||
|
Consolidated statement of comprehensive income
|
|||
|
for the year ended |
|
|
|
|
|
|
Audited |
Audited |
|
|
|
31 December |
31 December |
|
Rm |
|
2012 |
2011 |
|
Interest and similar income |
|
44,730 |
42,880 |
|
Interest expense and similar charges |
|
25,050 |
24,846 |
|
Net interest income |
|
19,680 |
18,034 |
|
Impairments charge on loans and advances |
|
5,199 |
5,331 |
|
Income from lending activities |
|
14,481 |
12,703 |
|
Non-interest revenue |
|
17,324 |
15,412 |
|
Operating income |
|
31,805 |
28,115 |
|
Total operating expenses |
|
20,528 |
18,919 |
|
- Operating expenses |
|
20,450 |
18,725 |
|
- BEE transaction expenses |
|
78 |
194 |
|
Indirect taxation |
|
561 |
505 |
|
Profit from operations before non-trading and capital items |
|
10,716 |
8,691 |
|
Non-trading and capital items |
|
(18) |
(14) |
|
- Net profit on sale of subsidiaries, investments, and property and equipment |
|
33 |
40 |
|
- Net impairment of investments, property and equipment, and capitalised development costs |
|
(51) |
(54) |
|
Fair-value adjustments of investment properties |
|
(12) |
|
|
Profit from operations |
|
10,686 |
8,677 |
|
Share of profits of associates and joint ventures |
|
1 |
* |
|
Profit before direct taxation |
|
10,687 |
8,677 |
|
Total direct taxation |
|
2,875 |
2,174 |
|
- Direct taxation |
|
2,871 |
2,194 |
|
- Taxation on non-trading and capital items |
|
4 |
(20) |
|
- Taxation on revaluation of investment properties |
|
* |
|
|
|
|
|
|
|
Profit for the year |
|
7,812 |
6,503 |
|
Other comprehensive income net of taxation |
|
247 |
697 |
|
- Exchange differences on translating foreign operations |
|
162 |
469 |
|
- Fair-value adjustments on available-for-sale assets |
|
43 |
(21) |
|
- (Losses)/Gains on property revaluations |
|
42 |
249 |
|
|
|
|
|
|
Total comprehensive income for the year |
|
8,059 |
7,200 |
|
Profit attributable to: |
|
|
|
|
Equity holders of the parent |
|
7,476 |
6,190 |
|
Non-controlling interest - ordinary shareholders |
|
43 |
32 |
|
Non-controlling interest - preference shareholders |
|
293 |
281 |
|
Profit for the year |
|
7,812 |
6,503 |
|
Total comprehensive income attributable to: |
|
|
|
|
Equity holders of the parent |
|
7,719 |
6,879 |
|
Non-controlling interest - ordinary shareholders |
|
47 |
40 |
|
Non-controlling interest - preference shareholders |
|
293 |
281 |
|
Total comprehensive income for the year |
|
8,059 |
7,200 |
|
Basic earnings per share |
cents |
1,638 |
1,367 |
|
Diluted earnings per share |
cents |
1,588 |
1,341 |
|
|
|
|
|
|
* Represents amounts less than R1m. |
|
|
|
|
Headline earnings reconciliation
|
||||
|
for the year ended |
|
|
|
|
|
|
|
Audited |
|
Audited |
|
|
|
31 December |
|
31 December |
|
|
|
2012 |
|
2011 |
|
Rm |
Gross |
Net of taxation |
Gross |
Net of taxation |
|
|
|
|
|
|
|
Profit attributable to equity holders of the parent |
|
7,476 |
|
6,190 |
|
Less: Non-headline earnings items |
(30) |
(34) |
(14) |
6 |
|
- Net profit on sale of subsidiaries, investments, and property and equipment |
33 |
29 |
40 |
60 |
|
- Net impairment of investments, property and equipment, and capitalised development costs |
(51) |
(51) |
(54) |
(54) |
|
- Fair-value adjustments of investment properties |
(12) |
(12) |
|
|
|
|
|
|
|
|
|
Headline earnings |
|
7,510 |
|
6,184 |
|
Consolidated statement of financial position
|
||
|
at |
Audited |
Audited |
|
|
31 December |
31 December |
|
Rm |
2012 |
2011 |
|
|
|
|
|
Assets |
|
|
|
Cash and cash equivalents |
14,445 |
13,457 |
|
Other short-term securities |
43,457 |
35,986 |
|
Derivative financial instruments |
13,812 |
12,840 |
|
Government and other securities |
26,753 |
30,176 |
|
Loans and advances |
527,166 |
499,023 |
|
Other assets |
9,488 |
12,051 |
|
Current taxation receivable |
246 |
698 |
|
Investment securities |
16,577 |
14,281 |
|
Non-current assets held for sale |
508 |
8 |
|
Investments in associate companies and joint ventures |
668 |
568 |
|
Deferred taxation assets |
399 |
266 |
|
Investment property |
205 |
614 |
|
Property and equipment |
6,398 |
6,312 |
|
Long-term employee benefit assets |
2,258 |
2,118 |
|
Mandatory reserve deposits with central banks |
12,677 |
11,952 |
|
Intangible assets |
7,922 |
7,777 |
|
Total assets |
682,979 |
648,127 |
|
|
|
|
|
Equity and liabilities |
|
|
|
Ordinary share capital |
457 |
455 |
|
Ordinary share premium |
16,033 |
15,934 |
|
Reserves |
37,460 |
32,557 |
|
Total equity attributable to equity holders of the parent |
53,950 |
48,946 |
|
Non-controlling interest attributable to |
|
|
|
- ordinary shareholders |
219 |
178 |
|
- preference shareholders |
3,561 |
3,561 |
|
Total equity |
57,730 |
52,685 |
|
Derivative financial instruments |
13,454 |
13,853 |
|
Amounts owed to depositors |
550,878 |
524,130 |
|
Provisions and other liabilities |
15,526 |
14,751 |
|
Current taxation liabilities |
193 |
200 |
|
Other liabilities held for sale |
36 |
|
|
Deferred taxation liabilities |
781 |
1,345 |
|
Long-term employee benefit liabilities |
1,591 |
1,479 |
|
Investment contract liabilities |
9,513 |
8,237 |
|
Insurance contract liabilities |
2,979 |
2,005 |
|
Long-term debt instruments |
30,298 |
29,442 |
|
Total liabilities |
625,249 |
595,442 |
|
Total equity and liabilities |
682,979 |
648,127 |
|
Condensed consolidated statement of changes in equity |
||||
|
|
|
|
|
|
|
|
|
Non-controlling |
Non-controlling |
|
|
|
Total equity |
interest |
interest |
|
|
|
attributable to |
attributable to |
attributable to |
|
|
|
equity holders |
ordinary |
preference |
|
|
Rm |
of the parent |
shareholders |
shareholders |
Total equity |
|
Balance at 31 December 2010 |
44,101 |
153 |
3,560 |
47,814 |
|
Dividend to shareholders |
(2,608) |
(11) |
|
(2,619) |
|
Dividend in respect of BEE transaction |
(310) |
|
|
(310) |
|
Preference share dividend |
|
|
(281) |
(281) |
|
Issues of shares net of expenses |
323 |
|
|
323 |
|
Shares acquired/cancelled by group entities and BEE trusts |
95 |
|
|
95 |
|
Total comprehensive income for the year |
6,879 |
40 |
281 |
7,200 |
|
Share-based payment reserve movement |
446 |
|
|
446 |
|
Dilution of shareholding in subsidiary |
11 |
(11) |
|
- |
|
Acquisition of subsidiary |
|
7 |
1 |
8 |
|
Other movements |
9 |
|
|
9 |
|
Balance at 31 December 2011 |
48,946 |
178 |
3,561 |
52,685 |
|
Dividend to shareholders |
(3,248) |
(8) |
|
(3,256) |
|
Preference share dividend |
|
|
(293) |
(293) |
|
Issues of shares net of expenses |
14 |
|
|
14 |
|
Shares acquired/cancelled by group entities and BEE trusts |
119 |
|
|
119 |
|
Total comprehensive income for the year |
7,719 |
47 |
293 |
8,059 |
|
Share-based payment reserve movement |
396 |
|
|
396 |
|
Regulatory risk reserve provision |
2 |
|
|
2 |
|
Acquisition of subsidiary |
|
2 |
|
2 |
|
Other movements |
2 |
|
|
2 |
|
Balance at 31 December 2012 |
53,950 |
219 |
3,561 |
57,730 |
|
Condensed consolidated statement of cashflows |
||
|
for the year ended |
|
|
|
|
Audited |
Audited |
|
|
31 December |
31 December |
|
Rm |
2012 |
2011 |
|
Cash generated by operations |
18,804 |
16,552 |
|
Change in funds for operating activities |
(5,947) |
(4,080) |
|
Net cash from operating activities before taxation |
12,857 |
12,472 |
|
Taxation paid |
(3,914) |
(3,609) |
|
Cashflows from operating activities |
8,943 |
8,863 |
|
Cashflows utilised by investing activities |
(4,696) |
(3,702) |
|
Cashflows (utilised by)/from financing activities |
(2,552) |
557 |
|
Effects of exchange rate changes on opening cash and cash equivalents (excluding foreign borrowings) |
18 |
(54) |
|
Net increase in cash and cash equivalents |
1,713 |
5,664 |
|
Cash and cash equivalents at the beginning of the year* |
25,409 |
19,745 |
|
Cash and cash equivalents at the end of the year* |
27,122 |
25,409 |
|
* including mandatory reserve deposits with central banks. |
|
|
|
Condensed segmental reporting |
|||||||
|
for the year ended |
Audited |
Audited |
Audited |
Audited |
Audited |
Audited |
|
|
|
31 December |
31 December |
31 December |
31 December |
31 December |
31 December |
|
|
2012 |
2011 |
2012 |
2011 |
2012 |
2011 |
||
|
Rm |
Total assets |
Operating income |
Headline earnings |
||||
|
|
|
|
|
|
|
|
|
|
Nedbank Capital |
|
142,286 |
149,789 |
4,044 |
3,091 |
1,428 |
1,228 |
|
Nedbank Corporate |
|
175,073 |
167,074 |
4,410 |
3,865 |
1,817 |
1,571 |
|
Total Nedbank Retail and Nedbank Business Banking |
|
290,198 |
279,323 |
18,989 |
17,102 |
3,496 |
2,957 |
|
Nedbank Retail |
|
198,072 |
190,398 |
14,693 |
13,107 |
2,552 |
2,091 |
|
Nedbank Business Banking |
|
92,126 |
88,925 |
4,296 |
3,995 |
944 |
866 |
|
Nedbank Wealth |
|
42,270 |
37,759 |
2,993 |
2,690 |
716 |
654 |
|
Shared Services |
|
6,594 |
7,315 |
20 |
259 |
36 |
3 |
|
Central Management, including Rest of Africa |
|
26,558 |
6,867 |
1,349 |
1,108 |
17 |
(229) |
|
Total |
|
682,979 |
648,127 |
31,805 |
28,115 |
7,510 |
6,184 |
|
|
|||||||
|
The segmental results for the year ended 31 December 2011 has been restated for the following adjustments: (a) enhancements to the allocation of economic capital; (b) the reallocation of negotiable certificates of deposit from Nedbank Capital to the centre; and (c) transferring the Rest of Africa Cluster from Nedbank Corporate to Central Management. These restatements have no effect on the group results and ratios, and only affect the segment results and related ratios. |
|||||||
|
Condensed geographical segmental reporting
|
||||
|
for the year ended |
Audited |
Audited |
Audited |
Audited |
|
|
31 December |
31 December |
31 December |
31 December |
|
|
2012 |
2011 |
2012 |
2011 |
|
Rm |
Operating income |
Headline earnings |
||
|
|
|
|
|
|
|
SA |
29,748 |
26,228 |
6,906 |
5,695 |
|
- Business operations |
29,748 |
26,228 |
7,267 |
6,162 |
|
- BEE transaction expenses |
|
|
(68) |
(186) |
|
- Profit attributable to non-controlling interest - preference shareholders |
|
|
(293) |
(281) |
|
Rest of Africa |
1,259 |
1,101 |
290 |
246 |
|
Rest of world - business operations |
798 |
786 |
314 |
243 |
|
|
|
|
|
|
|
Total |
31,805 |
28,115 |
7,510 |
6,184 |
Enquiries
|
External communications |
|
|
|
Patrick Bowes |
UK |
+44 (0)20 7002 7440 |
|
|
|
|
|
Investor relations |
|
|
|
Kelly de Kock |
SA |
+27 (0)21 509 8709 |
|
|
|
|
|
|
|
|
|
Media |
|
|
|
William Baldwin-Charles |
|
+44 (0)20 7002 7133 +44 (0)7834 524 833 |
Notes to Editors
Old Mutual
Old Mutual is an international long-term savings, protection and investment Group. Originating in South Africa in 1845, the Group provides life assurance, asset management, banking and general insurance to more than 12 million customers in Africa, the Americas, Asia and Europe. Old Mutual has been listed on the London and Johannesburg Stock Exchanges, among others, since 1999.
In the year ended 31 December 2011, the Group reported adjusted operating profit before tax of £1.5 billion (on an IFRS basis) and had £267 billion of funds under management from core operations.
For further information on Old Mutual plc, please visit the corporate website at www.oldmutual.com
This information is provided by RNS
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