NEDBANK GROUP LIMITED TransformaTion reporT · TransformaTion reporT NEDBANK GROUP LIMITED ......

for the year ended 31 December 2013

TransformaTion reporT

NEDBANK GROUP LIMITED

To be read in conjunction with the 2013 Integrated Report

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NedbaNk Group | transformation report

2013 HigHligHts

20132012201120102009200820072006

Audited

Audited

Audited

Audited

Audited

Audited Audited

201391,21Level 2

201195,23Level 22010

89,50Level 2

200986,62Level 22008

82,44Level 32007

67,48Level 52006

56,61Level 6

Audited

201294,87Level 2

Great progress has been made since inception in 2006, with a level 2 BBBEE status having been maintained since 2009 for the fifth consecutive year.

Ownership

Black ownERshIp

30,7% DIvIDEnDs paID ouT

2005

R747m

2013

Senior management15%

13%35%

33%

Middle management29%28%

56%54%

Junior management56%55%

84%81%

Black PWD1%1%

2%2%

Black 2013 Black 2012 Black women 2013 Black women 2012

Black anD Black womEn REpREsEnTaTIon

Employment equity

BBQ TransfOrmaTiOn champiOn Of ThE yEar SUNDAy TIMES TOp 100 cOmpaniEs BanksETa skills@WOrk africa’s sOcially rEspOnsiBlE Bank Of ThE yEar

awards

Our BBBEE scOrE pErfOrmancE

Black as wEll as Black fEmalE

33%ExEcuTIvE DIREcToRs

management control

Black fEmalE

BoaRD mEmBERs

Black

54%

Black womEn ownERshIp

9,6%

nedbank recognises that transformation transcends compliance and that it is a moral and strategic business imperative that will enable us to achieve our vision of being africa’s most admired bank by our staff, clients, shareholders, regulators and communities.

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BBBEE status

socioeconomic development

preferential procurement

access to financial services

skills development

Black TRaInInG spEnD

Black TRaInInG spEnD wEnT To womEn

77%

60%BEnEfIcIaRIEs

135 300

pRojEcTs assIsTED In 2013

585

pEoplE In caTEGoRy B,c,D pRoGRammEs

2 286 83% Black

60% Black womEn

vaRIous InITIaTIvEsEnterprise development

on vaRIous InITIaTIvEs

R59m

ThE numBEr OnE TransfOrmEd OrganisaTiOn amOng ThE TOp 100 JsE-lisTEd cOmpaniEs fOr fy 2012

Level 2

20132012 3%

ElEcTRonIc accEss GRowTh

fsc sITE BRanchEs

70,3% of RETaIl npaT spEnT on consumER EDucaTIon

BEE fInancInG

R10bn

■ 78% of our 2013 procurement spend was on locally sourced products and services.

■ spend with black owned suppliers increased 4% yoy.

TaRGETED InvEsTmEnT R7bn

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2013 awards nedbank wins BBQ Transformation of the year awardThe motlekar holdings BBQ awards is south africa’s most prestigious and longest running black business awards, which is in its twelfth year. The awards encourage and promote sustainable black business through the recognition of leadership and achievement. This year’s awards were intended to acknowledge individuals and organisations that embraced the spirit of transformation, hence promoting the understanding that BBBEE has the potential to redress inequality, boost economic growth and create a better life for all. The awards consist of 15 categories open to individuals, black-owned and empowered companies and organisations. The finalists and winners have been selected by a panel of independent judges, based on submissions received from individuals and organisations related to different criteria.

The Transformation champion of the year award reflects nedbank’s level 2 Broad-Based Black Economic Empowerment status as the most transformed company on the jsE.

The corporate social Investment award reflects nedbank’s commitment to corporate upliftment through a wide range of programmes and initiatives that impact positively on all nine of south africa’s provinces.

nedbank wins Sunday Times Top 100 companies awardnedbank was declared the winner of the 2013 Sunday Times Top 100 company corporate social Investment (csI) award at an event held on 29 october 2013.

nedbank wins BanksETa awardon 14 october 2013, nedbank was recognised by the BanksETa for winning the skills@work award in the large company category. This award is a celebration of good practice in skills development in the banking and microfinance sectors. These awards are an opportunity for the BanksETa to acknowledge businesses for their continuous commitment and contribution to skills development.

This award recognises nedbank’s continuous commitment to the development of its people and it specifically acknowledges nedbank for its:

■ leading Transformation in the banking sector

■ learnerships

■ Graduate programme

■ learning academies

■ coaching

■ support of people with Disabilities

■ contribution to socioeconomic objectives

nedbank is africa’s socially responsible Bank of the year for the second time in just five years, nedbank has been voted africa’s socially Responsible Bank of the year at the african Banker awards held on 29 may 2013 in marrakesh, morocco. This recognition follows a similar acknowledgement that nedbank received in 2009 in the same category.

The socially Responsible Banker award goes to an african bank, which has the greatest socially responsible projects and policies. The award is also aimed at companies, which go beyond the philanthropic use of funds, to further use their overall knowledge, resources and reputation to improve the lives of those who are disadvantaged in society. The panel of judges sought concrete examples of projects, policies and initiatives, which have had a sustainable impact on the targeted communities.

In line with the criterion for receiving the award, nedbank is being recognised for making a lasting contribution through its key focus areas, namely: education, community development, health, socioeconomic development, children’s welfare, arts and culture, sport development, the environment and volunteerism.

In the 2012 csI handbook published by Trialogue, which is regarded as the leading and independent annual csR report in south africa, nedbank was ranked second by non-profit-making organisations and third by corporates under the category companies achieving the most developmental impact.

nedbank is the only south african bank which was nominated in this year’s social Responsible Bank of the year category and it is also the only bank in south africa to have won this award twice in five years.

Transformation dialogues on safm

Transformation is regarded as a business and moral imperative at nedbank. This is why we are committed to playing our part to overcome our country’s socioeconomic challenges and are ranked as the most transformed company among the Top 100 jsE-listed companies.

more importantly, we believe that transformation goes beyond numbers and requires contribution and creativity from all committed stakeholders. for this reason, we have partnered safm, Business Report and the university of south africa (unIsa) to host fact-based monthly discussions which aim to make transformation happen. Each of these conversations on seek to engage stakeholders across the spectrum on key transformation matters and highlight the role each of us can play to make the changes we want to see happen.

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OverviewThe BEE transformational environment has become progressively more demanding, following promulgation of the Revised codes of Good practice (the codes) by the minister of Trade and Industry on 11 october 2013. The release of the codes symbolises a new beginning in the re-orientation of the transformation policy to address the issue of fronting and focus more on productive BBBEE and the growth of black entrepreneurs through Enterprise and supplier Development elements. nedbank remains committed to building on its solid empowerment credentials by aligning to the codes.

our BBBEE rating for the past four years was calculated under the codes of Good practice (dti codes) and for the first time this year calculated in accordance with the financial sector code (fsc). Recognising the unique position that the financial

institutions hold in the development of south africa, two new elements have been introduced into the fsc which had been promulgated in november 2012. These include Empowerment financing and access to financial services.

The bank seeks to ensure that existing and new initiatives build on its current successes to further advance its transformation journey.

as a strategic focus area, our endeavour is to be at the forefront of transformation and leadership. In an effort to transcend compliance we will be guided by the fsc, but also seek to entrench transformation within our organisational culture, enhance our commitment as a corporate citizen, and continue our drive to become a bank for all to service the culture and needs of our changing client base.

WE arE grEaT aT lisTEning, undErsTanding cliEnTs’ nEEds and dEliVEring

What makesus distinctive?

deep green aspirations Great place to work Great place to bank

worldclass at managing risk

our vision To be africa’s most admired bank by our staff, clients, shareholders, regulators and communities

most aspirationaland accessiblebrand

focus areasculture of collaboration

and innovationExcellence in productivity

and execution

at the forefront of transformation and

leadership

highly involved in the community and

environment

living our values

Integrity, respect, accountability, pushing beyond boundaries, people-centred

Green and caring bankGreat place to invest

client-centred

Who we areBankInG

anD sElEcTED fInancIal sERvIcEs

pRovIDER

Bank foR all pan- afRIcanBankInG

nETwoRk

a mEmBER of ThE olD muTual

GRoup

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transfOrmatiOn rEpOrt (cOnTinuEd)

The revised codes of good practice (the codes)following the promulgation of the Revised codes of Good practice, the financial sector code (fsc) will have 12 months to realign to the codes before 11 october 2014. although there are significant changes, nedbank remains committed to transformation and will participate in an industry realignment process through the Banking association of south africa (Basa) and the fsc council.

Table a reflects our comparative condensed BBBEE scorecard based on the fsc prescribed measurement principles per element:

Element

financial sector code dti codes

possible points

dec 2013audited

possible points

dec 2012audited

dec 2011audited

ownership 14+3 bonus 16,92 20+3 bonus 23,00 22,77

management control 8+1 bonus 6,91 10+1 bonus 9,19 9,19

Employment Equity 15+3 bonus 11,29 15+3 bonus 10,71 11,94

skills Development 10 9,21 15 12,59 11,83

preferential procurement 16 14,56 20 19,38 19,50

Empowerment financing 15 13,86 n/a – –

Enterprise Development 5 5,00 15 15,00 15,00

socioeconomic Development 3 3,00 5 5,00 5,00

access to financial services 14 10,47 n/a – –

Total100+7 bonus 91,21

100+7 bonus 94,87 95,23

BBBEE level 2 2 2

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deTailed reporTThe detailed sections to follow will reflect our efforts and articulate the performance of each element as measured against the fs code principles.

Ownershipnedbank’s BEE deal embraces the spirit of black empowerment by being the first deal that introduced the broad-based approach by effectively involving a diverse group of new black stakeholders consisting of employees, clients, community interest groups, non-executive directors and strategic black business partners (BBps).

In general, each component of the nedbank deal grew since inception at a minimum of 94% or more in the economic value added to each of the participants. The maturing of some of the components will lead to the continued consequence (running out) clause dilution of the fs codes.

The financial sector council will perform an ownership review on the sector in 2014 and every two years thereafter to assess the application of the “once Empowered, always Empowered” principle.

Table 1: Ownership scorecard

measurement criteria Weightingdec 2013

verified

Total score 14+3 bonus 16,92

BBBEE level 1

’It is remarkable that the relationship between nedbank and wiphold is already entering its ninth year. The relationship has been rich with challenge, debate and shared values. we particularly value our strategic partnership on Imbizo and believe that through this and other contributions we continue to add real value to nedbank.’

Gloria serobeCEO of Wipcapital Limited, Founder and Executive Director of WiphOLD Limited, Nedbank Group Limited and Nedbank Limited Non-executive Director

‘The past year has seen a further synthesis of the relationship between nedbank and the Brimstone-mtha consortium. our long relationship continues to be grounded in trust and transparency and to grow at various levels. at both strategic and tactical levels, the relationship is one of mutual engagement and mutual benefit. This is a great example of how BEE shareholders should engage with the established businesses they invest in; an example of the benefit when both parties are relevant to each other.’

mustaq enus-BreyDirector of Brimstone investment Corporation Limited Nedbank Group Limited and Nedbank Limited Non-Executive Director

WiphOld

The Eyethu scheme’s net value has grown by more than R6,7bn, with R2,3bn having already accrued free of any debt to the participants. In addition, over R747m has been paid out in dividends to date. widely regarded as one of south africa’s most successful empowerment deals, the Eyethu scheme has benefited more than 47 000 individuals – ranging from employees, retail clients, corporate clients, nedbank black business partners and communities.

management controlThe management and control element reflects the representation of the nedbank board as well as the transformation that takes place at group executive level.

at board level we now exceed the targets set for 2017 in the black people representation category, however, the target representation

in Black women performance directly influences our overall score on this element. similarly at executive level, although we are exceeding the 2017 target, the lower than target representation in Black women performance directly influences our overall score of this element.

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Details of composition of the nedbank board of directors can be accessed on the nedbank Group website.

Employment EquityThe aspiration of making nedbank a ‘great place to work’ has been a constant reminder that the people of our organisation are

the real assets and a key ‘resource’ that is essential in sustaining our organisation into the future. The focus of the nedbank human resources strategy is driving our organisational transformation.

Table 3: Employment Equity scorecard


verifiedTotal score 15+3 bonus 11,29BBBEE level 3

accelerated development approachnedbank is updating a groupwide approach to accelerated development approach with a specific focus on addressing our transformation challenges at senior management level – this includes knowledge transfer, mentoring and coaching and sponsorship. The purpose of the accelerated development is to create an approach that will enhance mobility and exposure across clusters, thereby addressing nedbank’s transformation challenges, especially at senior management.

an inclusive environment nedbank aspires to be at the forefront of transformation as part of its expressed strategic focus areas to achieve its vision. our transformation vision is: ‘To be a pan-african Bank with an inclusive culture, relevant in the societies in which we operate and admired as a business that significantly advances the development of historically disadvantaged people across all our stakeholder groups’. To achieve such, nedbank has developed an integrated transformation strategy that has an inclusive environment as a base. In executing this transformation strategy, the bank is currently exploring means to create a suitable inclusive environment that will drive transformation holistically to a point where all feel part of the organisation.

people with disabilitiesnedbank is an inclusive environment for all, including people with disabilities. we continued to create a great place to work for people with disabilities. In 2013, nedbank achieved 3,75% of people with disabilities moving from 3,43% in 2012. such translates to nedbank having more people with disabilities as compared to the average of 1,4% recorded in 2012 for all designated employers (according to the thirteenth cEE). These numbers were achieved through awareness campaigns aligned with international day of people with disabilities, a newly enhanced declaration portal, and a reasonable accommodation guide as well as disability awareness and sensitisation workshops.

The campaign was focused on the new declaration portal enhancement, reasonable accommodation and hosted ‘people with disabilities’ talk. During the second half of 2013, nedbank embarked on Disability awareness and sensitisation workshops targeting line managers, human resources consultants and employees in general on how to manage and work effectively with people with disabilities. over 200 employees were sensitised with more workshops planned for 2014 and 2015.

advancement of women The nedbank women’s forum, which has been in existence since 2002, is one of the channels that we use to deliver initiatives aimed at the advancement of women in the bank. This forum was re–constituted earlier in the year to incorporate it into the existing transformation and human resources governance structures, as it was purely a voluntary forum in the past. all business clusters in the bank are now represented on the forum. The main focus areas of the forum are based on themes that were identified via café conversations that were conducted with female senior managers, as well as other surveys such as the nedbank staff survey and Barrett. These themes include upskilling women with gender-specific competency gaps (eg personal branding, sponsorship), community involvement as well as topics around women’s health, work-life-balance and networking opportunities. The forum also seeks to collaborate with other areas of the bank such as the nedbank foundation and Employee wellbeing in order to reposition itself into a value-adding entity that contributes positively to the overall strategic direction of the bank.

skills developmentIn nedbank we develop people to get individuals to full performance in their current jobs; prepare individuals for larger/more complex/broader jobs in future, and support individuals to reach their full potential (continuous personal development). This is facilitated through various training programmes using different combinations of learning methods to ensure effectiveness of training.

Table 2: management control scorecard


verified

Total score 8+1 bonus 6,91

BBBEE level 2

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nedBank leadership and manaGemenT developmenT proGrammesOur Business and Executive Education programmes continue and in addition focus on:nedbank in partnership with a leading business school in sa, The Gordon Institute of Business science (GIBs) offers south african Qualifications authority (saQa) accredited Business Education programmes (BEp). The purpose of the programmes is to develop knowledge, skills and values (ksvs) to integrate different management disciplines at the managerial level and to have a holistic view on core competencies required at new manager level, and building benchmark competencies to progress through various management levels within the banking sector. The programmes have been designed to align to nedbank’s strategic focus areas and management accountabilities across the career choices model. There are three Business Education programmes being the junior

management programme, the middle management programme and the senior management programme.

at a higher level, there are Executive Education programmes offered by various institutions, both local and international. The objectives of these programmes are to provide senior managers and executives with a deep global perspective enabling the participants to become global leaders who are able to lead in a complex world and to lead collaboratively, understanding how to disseminate and execute strategy and understand the drivers and opportunities for innovation and gain insights to the leading thinking that is happening now, that will shape the future of business; and update their knowledge and skill on the functional aspects of management with an opportunity to engage with other leaders from different companies.

During 2013, 439 managers completed the Business Education programmes of which 311 (71%) were black of which 152 (49%) were black females.

Table 4: skills development scorecard


verified

Total score 10,0 9,21

BBBEE level 2

Business Education programme

african coloured indian Total Black White

Totalfemale male female male female male female male female male

junior management programme (jmp) 47 40 24 11 16 14 87 65 25 20 197

middle management programme (mmp) 20 27 7 14 13 18 40 59 15 25 139

senior management programme (smp) 14 16 3 4 8 15 25 35 13 30 103

Total 81 83 34 29 37 47 152 159 53 75 439

Enablement programmesThe leader/manager enabling programmes are foundational programmes specifically designed to get nedbank leaders/managers upskilled to become better performing leaders/managers at their particular pipeline passages. These programmes are designed to build the leader/manager capability within the nedbank Group. These development journeys will further be supported by the nedbank leader/manager academy approach which is different to how we currently view leader/management development.

programmes on offer:

■ nedbank manager of others Enabling programme

■ nedbank manager of managers Enabling programme

■ nedbank manager of function Enabling programme

new proGrammes – 2013The nedbank way of leading/managing workshops

The workshop focuses on the nedbank leadership philosophy/framework to create the context to shape the mindset and alignment of our leaders going forward.

Workshop objectives ■ To define what Great leaders/managers look like at all levels

in nedbank.

■ To provide leaders/managers at all levels with personal development insight.

■ To provide leaders/managers at all levels with insight on how their engagement impacts on others.

■ To facilitate the process for leaders/managers at all levels to grow toward the nedbank way.

■ To provide leaders/managers at all levels with an opportunity to pledge their commitment to The nedbank way of leading/managing.

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oTher learninG proGrammeswe believe that great things begin with great people and we strive to attract and retain sa’s top graduates to build the future leadership and specialist pipelines of our organisation that allow us to remain competitive in a sustainable organisation. It is with this in mind that we embarked on a journey of establishing a graduate flagship programme. for the first time ever, we offered graduates the opportunity to choose their career from the very start. so, whether an individual is interested in beginning a career journey in a specialist field such as accounting, risk, information technology, investment banking or quantitative analysis or would rather first explore other areas in banking to become a well-rounded manager, the graduate flagship programme meets their needs.

The purpose of the nedbank Graduate Development programme is to provide each participant with fast-tracked, experiential and applied learning opportunities to be fit for employment. a holistic learning model was adopted and graduates are exposed to various modules that are provided either in-house or by external training providers.

nedBank academiesThe group’s various academy programmes form a vital part of its overall people development strategy and includes additional foundational programmes that facilitate entry level qualification for the academy programmes.

By the end of the 2012 financial year, through the nedbank academy approach, 443 leaders and professionals have been trained cost effectively enabling us to reap a range of benefits. In 2013 this number has grown to 853. we now see enhanced competence among employees, impelling their prospects of moving into more complex roles within the organisation. The training has also refined the skills of employees who have not

been able to maximise their potential. moreover, we continue to recoup some of the investment through tax rebates but we’re reinvesting the funds for further employee training.

The nedbank academies have evolved to include and integrate learning into the end-to-end human resources practices of job profiling, recruitment, assessment, performance management and change management.

These academies are running for nedbank staff nationally, across south africa and, where applicable, for nedbank staff in the rest of african countries.

learnershipsIn nedbank we use learnerships as the vehicle to address the skills shortage (scarce skills) as per the workplace skills plan in our organisation and the entire sector. we have designed the programmes such that employees who participate in these are able to achieve saQa-accredited qualifications within a period of 12-18 months. we have an inclusive approach to these programmes which guarantees learners support through compulsory attendance of classes and coach involvement in the learning process.

This award is an illustration of how nedbank continues to realise its vision to be africa’s most admired bank by our staff, clients, shareholders, regulators and communities.

preferential procurementTransformation is emphasised through our procurement policies and results are monitored very closely through rigorous reporting and management information by structures that span across the group. we strive to achieve broad-based empowerment in its true spirit and intention.


Table 5: preferential procurement scorecard


verified

Total score 16,0 14,56

BBBEE level 2

our procurement policy exists to ensure that sound procurement practices are employed to improve performance in every area of the group. This is achieved through rigorous adoption of best practice strategic sourcing and procurement principles, to enhance overall efficiency, whilst at the same time striving to exceed our transformation targets.

procurement is separated into two distinct processes – those that are centrally-led and those that lend themselves to be de-centralised. The underlying principle is that only purchases that can be made for business purposes from a registered vendor and within ethical guidelines will be allowed. procurement decisions are based on the following primary criteria:

■ BBBEE (special emphasis and higher weighting on smE and Black women owned suppliers)

■ price

■ product or service (quality and fit for purpose)

■ availability

■ local content versus foreign content (newly introduced)

■ Environmental pragmatism.

Despite excellent performance across all areas of the procurement scorecard, purchasing from Black women owned (Bwo) organisations remains a challenge. Despite our efforts, the lack of Bwo suppliers in significant categories of our supply chain remains elusive. To address this situation the procurement department was restructured enabling resources to focus mainly on Bwo suppliers in order to achieve set goals.

special emphasis is placed in the tendering process as well as on information programmes instituted to advocate the need to

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increase Bwo suppliers. our efforts are slowly showing success with the following initiatives having occurred in 2013:

Through our assistance and guidance one of our biggest providers in the area of ‘staffing,’ have managed through our assistance and guidance to not only become a Black owned enterprise but also qualify as a Bwo entity with over 30% shareholding in the hands of black women. This new structure took place late in 2011.

The transformation was a win-win situation for both sides and the relationship has continued to grow in particular with the nedbank Retail cluster as the biggest beneficiary of the above transaction. we are however cautious of the fact that the new company was an Emerging micro Enterprise (EmE) but as the business transaction was substantial by our 2012 financial year- end, it had surpassed the EmE threshold of R5m.

we are confident that the supplier will maintain the equity-holding in its current structure when they renew their BEE certificate and, at the same time, are aware that the BEE level might drop from the high level of three to a lower level due to the entity having to be verified on all seven elements of the scorecard.

This is one of the few success stories where the partnership was in the true spirit of the BEE and economic transformation of the country.

During the latter part of 2012, our group procurement representatives appointed a 100% Bwo cleaning company, into one of nedbank’s main campus office blocks at 100 main street which comprises 13 floors and three basement parking floors.

prior to the appointment, the supplier was an EmE, Bwo service provider whose biggest client to date had been the national government. Being a small enterprise and taking on bigger challenges often has key learnings which we are willing to undergo to help establish a service provider that will be able cater for our needs.

During a short space of time the supplier has become a resilient cleaning service provider, proving that the willingness to consider and follow through on opportunities for emerging enterprises directly contributes to the economic transformation journey of our country.

prompt payment codenedbank took the lead in being the first signatory of the prompt payment code™, an initiative by the national small Business chamber (nsBc), which serves as a pledge for organisations across south africa to commit to paying small businesses promptly.

The code was launched at the small Business friday™ media Briefing in johannesburg in anticipation of the celebration of small business on 6 september 2013, a symbolic day for everyone – from consumers to large corporates – to support small business.

as a bank for small businesses, we continue to engage with our clients to listen to their needs and challenges. from our ongoing research, cashflow is always singled out as the main concern affecting many small businesses. we are therefore delighted to be the first signatory to the prompt payment code™. This is another way for nedbank to vote small Business. The code promotes payment of small businesses for goods and services rendered within 30 days from receipt of a valid and correct invoice, which is an important step towards creating an environment in which small business can thrive.

empowermenT financinGRecognising the unique position that the financial institutions hold in the development of south africa, two new elements have been introduced. These are Empowerment financing and access to financial services. consisting of two sub-elements, Targeted Investments and BEE Transaction financing intend to empower the previously disenfranchised.

Targeted investmentsTargeted investment is an opportunity to extend the effectiveness of nedbank’s social sustainability efforts through debt financing of, credit extension to, or equity investment in sa projects that will help to close any gaps or backlogs that still exist in the country’s economic development and facilitate job creation for future growth. Targeted investment activities comprise transformational infrastructure finance, Black agriculture finance, Black small and medium enterprise (smE) financing, and affordable housing projects and initiatives.

Table 6: Empowerment financing scorecard

measurement criteria industry Target (rm) Weightingdec 2013 verified

Total Empowerment financing R80 000 15,0 13,86

BBBEE level 2

Black smE financingsmEs play a critical role in job creation, income generation, economic empowerment, and the economic growth of the country. we are acutely aware of the challenges that restrict the growth and development of smEs. as a bank we are committed to creating an enabling environment that provides opportunity for businesses to become sustainable, job-creating enterprises in the country.

various initiatives supporting black smE conducted include:

Vote small Business and make a Big differenceDuring 2012, nedbank launched small Business friday™ in association with the national small Business chamber to create awareness of the importance of small business in growing the south african economy, drive business to small business and ultimately position nedbank as the bank for small business.

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In 2013, we once again encouraged the people of south africa to stand behind our country’s small businesses and the hardworking individuals who make them what they are, and asked them to ‘vote small Business’. so what does it mean to ‘vote small Business’? There are three ways in which support could be given:

■ vote with your hEaRT by supporting a small business

sign up small businesses to be a part of the ‘vote small Business’ initiative. hand out information packs, get them to visit www.simplybiz.co.za and position all the tools and offerings nedbank has to support and grow small businesses!

■ vote with your fEET by visiting a small business

why not promote your favourite small businesses? vote by tweeting using the hash tag #votesmallBusiness or like us on www.facebook.com/smallbusinessfriday.

■ vote with your wallET by spending at a small business

you can easily identify small businesses by the ‘vote small Business’ sticker and associated branding and make a conscious decision to support them.

growing and supporting smEsDuring 2013, a poultry farmer selling an average of 800 chickens per month to the local community participated in nedbank’s mentorship programme. after just three months of intensive mentoring, training and business skills support, he received funding to upscale his operations, improved its productivity by producing 2 000 chickens per month and is now the largest chicken farmer in the community.

The local businesses in the area are also working with him around quality systems so that they can procure from him and he can continue to increase markets with the major retail chains. To augment and sustain this growth, the business owner also attended specialist training from the poultry Institute.

small Business seminarsafter running free small Business seminars for the past eight years to start-up businesses, nedbank changed the face of seminars to focus on established businesses two years and older that have shown growth. During 2013 nedbank supported over 250 businesses through workshop-orientated sessions held in Gauteng, kwaZulu-natal and the western cape which included tips from leading experts on how to build and pitch their businesses, to network, to make deals and meet other like-minded business owners.

Black aGriculTure financinGThe benefits of sustainable agriculture investmentGive the importance of agriculture, it is incumbent on other sectors to actively contribute to its sustainability. our approach is to cooperate closely with the agriculture sector stakeholders in order to gain better understanding of the challenges faced and to contribute to the development of actionable and effective agriculture initiatives.

nedbank’s sustainable farm awardnedbank, wwf-sa, the Illovo planters Group (IpG) and the Eston show committee launched the inaugural nedbank sustainable farm award at the 2013 nedbank Eston show. The award seeks to recognise agricultural businesses that are practising sustainable farming principles, particularly in terms of

integrating the social, environmental and economic aspects of their operations.

In order to enter, farmers were required to self-rate their farming operations via a survey. from the responses to the survey, a panel comprising representatives from the IpG, nedbank and an independent expert selected three finalists. These three operations were visited to determine the most sustainable farming operation in the IpG district.

conscious of the importance of agriculture and its impact on the environment and the communities it supports, nedbank forms strategic partnerships with stakeholders in the agricultural sector to gain a better understanding of the challenges faced and contribute to the development of effective sustainable agriculture initiatives. our three-year, R8,3m investment announced in 2012 into wwf-sa’s sustainable agriculture programme is just one example of the integrated approach we take to encourage and enable sustainable agriculture at all levels of industry and society.

affordaBle housinG The affordable housing market continued to be relatively subdued in 2013 given the affordability issues facing the market as a result of high levels of indebtedness and impaired credit records.

nedbank’s prudent lending policy continued to be applied and has resulted in a controlled level of non-performing loans.

Interest rates continued at record low levels throughout the year which has contributed to the relatively good performance of the book. measures are in place to stress client affordability should interest rates increase. This measure, amongst others, will contribute to the ongoing good performance of the book should rates increase.

notwithstanding these difficult market conditions nedbank has continued to demonstrate its commitment to the market by embarking on a number of initiatives in 2013.

■ a project with the french Development agency was implemented in may 2013 whereby qualifying clients would receive a R17 000 grant, extensive borrower education and ongoing mentoring after moving into the home.

■ nedbank has entered into a cooperation agreement with the national housing finance corporation to participate in the recently announced finance linked Individual subsidy programme (flIsp).

The bank has acknowledged the growing need for focused, specialised funding of new affordable housing developments to increase access to housing for the broad segment of south africans who are in the lower income segments. a total of 6 194 units were funded during 2013 for new affordable housing developments in the major metros across south africa.

Taking this into account, the bank has supported, by way of a responsive funding approach, the creation of affordable rental stock, which enables such lower income earners access to quality accommodation even if they cannot afford direct ownership. The unit is also involved in a social housing initiative which caters for the income segment below the Gap market. This funding takes the form of development finance to shRa-accredited social housing Institutions where new higher density rental

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accommodation assists in alleviating the significant need for housing the poor.

provinces impacted through this include: western cape, Eastern cape, Gauteng, limpopo, mpumalanga and kwaZulu-natal.

Bee TransacTion financinGsuccessful deals of 2013 include:

nedbank Group acted as sole funder to kagiso Tiso holdings (‘kTh’) to acquire the remaining 48,9% shares of kagiso media limited (‘kml’) that it doesn’t already own. nedbank provided a cash confirmation guarantee together with a bridge facility of R1,8bn to enable the acquisition of the 48,9% kml shares. The

bridge loan will be settled by a term loan of R1,2bn plus kTh’s equity contribution.

nedbank is proud to be associated with this landmark transaction for kTh and the transformation of the industry.

access to financial servicesThis section reflects our commitment to deliver together with the rest of the financial sector on key areas of enabling transformation through access to finance. The various measurements including consumer Education have been revised as part of the financial sector code and measures specific points of access to the consumer beyond just the old branch and aTm points.

Table 7: access to financial services scorecard

access method Weightingdec 2013

verified

Total score 14 10,47

BBBEE level 4

geographic accessover the past four years we have opened 220 retail banking outlets (branches and alternative outlets, excluding pl kiosks) and increased our aTm footprint by 1 529 (or 83%) across the full spectrum of sa communities. This means that nedbank’s retail banking footprint has grown by 41% to almost 763 outlets across the country, reaching 10 000 more suburbs than in 2009.

fsc sitesIn an effort to increase access to first-order retail financial services to a greater segment of the population, nedbank in collaboration with other financial institutions, identified 32 rural fsc sites in desperate need of representation within the lsm 1-5 population. nedbank reached its agreed target at the end of 2008 and still continues its support in these areas.

The branch of the future design choice and network of formats has further enhanced the relevance and appeal of nedbank to all in south africa by improving the in-store experience through increased self-service capabilities, customer-friendly queuing systems and emphasis on customer education. Twenty-eight outlets have been converted to the new formats, with the full rollout plan seeking to cover 77% of branches by 2016.

During 2013 we unveiled africa’s first 100% renewable energy powered bank branch that fully offsets its energy usage through renewable energy sources.

The lansdowne corner branch situated in cape Town utilises an innovative hybrid power installation, effectively making it a 100% off-the-grid outlet. The grid-tied renewable energy system harnesses solar and wind energy and converts this to standard mains electricity directly to the nedbank branch.

site name provincedec 2013

verifieddec2012

verifieddec 2011

verifieddec 2010

verified

Total 7 7 8 8

shiluvana limpopo 1 1 1 1

monsterlus mpumalanga 1 1 1 1

Dimbaza¹ Eastern cape – – 1 1

jerusalem Trust mpumalanga 1 1 1 1

modimolle mpumalanga 1 1 1 1

Ga mogatlane limpopo 1 1 1 1

ngqeleni Eastern cape 1 1 1 1

highflats kwaZulu-natal 1 1 1 1Note: ¹ The Dimbaza branch closed on 8 September 2012 due to the significant drop off in volumes. This was a business decision based on the fact that there would be minimal impact on

our clients due to the proximity of the five staffed points of presence in King William’s Town

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access Qualifying productsThrough its mass market strategy introduced in 2011, nedbank has seen commendable year-on-year growth and currently has over 3m customers in the Entry-level Banking segment. The key solutions that nedbank has introduced over the years include:

mzansimzansi is a card-based, entry-level product with savings and transactional capabilities and a simplified pricing structure. nedbank Retail has forged community sales Teams (csTs) to go into rural settlements to afford basic financial education to residents and to encourage them to open mzansi accounts. In this way, nedbank is taking banking to the people – a policy that has been a key driver in helping nedbank’s mzansi account acquisition. at present, nedbank has the second largest base among financial services providers in south africa.

oTher producT offerinGnedbank 4me – ‘my future my Bank’During the second quarter of 2012, nedbank launched the nedbank 4me offering which is targeted at kids and teenagers, to encourage them to save and build their financial fitness from an early age. nedbank 4me is based on four key pillars; ‘4spending, 4saving, 4growing, 4good’ and comprises a full transactional banking account with no monthly fees and some free initial transactions. Thereafter “pay-as-you-use” pricing applies. free enotes and self-service banking also compliment the offering.

nedbank’s client-centred approach is vital to making banking accessible and ensuring that it provides relevant products, services and easy-to-use financial tools to help its clients build financial fitness. nedbank also places greater emphasis on financial education and in 2004, the bank launched the nedbank consumer Education programme which provides clients and potential clients with information that assists them in making informed financial wellbeing decisions.

The following are some of nedbank’s education initiatives:

■ The Teach children to save south africa™ (TcTs sa™) programme promotes volunteerism within the financial sector as it enables staff members to teach children about the importance of, and how to budget, save and understand the difference between needs and wants, as well as other financial concepts.

■ The nedbank/Bona partnership with caxton’s publishing group which was designed to provide financial education through editorials in the Bona magazine, reinforced by monthly workshops; and

■ a ‘how-To’ guide that introduces banking basics to low income earners with a view to rendering them more comfortable with banking and to assist them in planning a more financially secure future.

consumer educaTionnedbank consumer Education learning The nedbank consumer Education learning material was first designed and developed in 2008 as a result of an undertaking

made by the bank with the Banking association of south africa. The aim of the learning material was to provide clients and potential clients with accurate and relevant information that would assist them in making informed decisions regarding their financial wellbeing.

companies are required to spend 0,3% of Retail npaT on consumer Education. During 2013 nedbank supported various interactions across all nine provinces which covered banking products and services on budgeting and credit topics.

NEDBANK CONSUMER EDUCATION: 2013 NATIONAL INTERVENTION ATTENDANCE DISTRIBUTION (%)

■ Eastern Cape■ Free State■ Gauteng

■ KwaZulu-Natal■ Limpopo■ Mpumalanga

■ North West■ Northern Cape■ Western Cape

3 212

8

16

1

2

24

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Enterprise developmentnedbank’s approach is multifaceted and includes a mix of funding, transactional and support products and services that provide flexibility and adaptability across all industries. This allows for the configuration of unique solutions, in line with the diverse needs of entrepreneurs and businesses. Regional teams, with specialist and expert support such as the national agriculture team, continue to drive the business imperative of transforming our client base and supporting emerging businesses.

our 2013 responses to requests for ED assistance were to introduce innovative incubators and programmes designed to address essential skills and funding shortages in line with specific needs. This extended to the implementation of a national entrepreneurial development programme in partnership with municipalities. Businesses also received financial management training and grant funding for training and infrastructure aimed at beneficiary businesses. These interventions are all part of a long-term phased-in approach to growth and development.

other examples of support entail: provision of seminars; provision of business tools which includes free advisory, support and access to information through the ‘simplyBiz’ website and the launch of unique initiatives relating to market access and supply chain development for smEs.


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Table 8: Enterprise development scorecard

measurement criteria Weighting

fs code target

(% of npaT)dec 2013

score

Qualifying ED contributions made by the measured entity as a % of sa npaT 5,0 0,2% 5,0

BBBEE level 1

our main focus areas’ objectives support our aspirations of helping the communities in which we operate with sustainable and viable projects with focus on:

■ Education;

■ community development;

■ health;

■ Economic Development;

■ Environmental sustainability;

■ sport Development; and

■ arts and culture.

Development of the arts, culture and heritage, advancement of artists, construction of facilities and the creation and development of sound infrastructure support (arts & culture Trust affinity).

The country’s economic situation was highlighted earlier this year when the ministry of finance reported that more than half of households in south africa benefit from social welfare, and for 22%, grants are the main source of income.

The results of the latest Quarterly labour force survey by stats sa have also emphasised the need to create a stable economy which will produce jobs. It revealed that the unemployment rate rose to 25,6% during the second quarter, from 25,2% in the first quarter. The consequence of this phenomenon is increased poverty. This is already reflected in the latest finmark Trust finscope research on financial Inclusion which found that 20% of south africans went without enough food to eat in 2012.

socioeconomic developmentcompanies are required to spend 0,7% of npaT. In 2013 nedbank contributed R89m (R111m including community Trust and nedbank private wealth Trusts) in support of 585 socioeconomic development or social sustainability initiatives in all nine provinces benefiting in excess of 135 000 individuals.

Table 9: socioeconomic development scorecard

measurement criteria Weighting

fs code target

(% of npaT) dec 2013

verified

Qualifying sEd contributions

value of socioeconomic development contributions made by a financial institution as a % of npaT 3,0

2013=0,70%

2014=0,60% 3,00

BBBEE level 1

The chart below illustrates the qualifying sED contribution by focus area:

SED CONTRIBUTION BY FOCUS AREA (%)

■ Education ■ Environment■ Health ■ Sport■ Welfare ■ Other■ Arts and Culture ■ Development

19,9

42,81,4

9,9

5,24,0

16,6

nedbank foundation The nedbank foundation, our primary corporate social investment arm supported initiatives in needy communities and worthy projects across south africa during 2013.

The funds were channelled into the group’s core focus areas:

■ Education;

■ health;

■ community development; and

■ skills development.

The philosophy of the nedbank foundation is to support projects which have a meaningful and long-lasting impact hence a careful assessment of all potential projects is undertaken before committing to them. some of the 2013 highlights include:

The nedbank mobile clinicnedbank has partnered with the Department of health and Education in north west to provide essential free health services (essential optometry, dental and basic healthcare) to primary school learners from disadvantaged areas through the nedbank mobile clinic.

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Bicycles enable learners to access education four hundred learners in the free state recently received bicycles as part of nedbank and Transport and Education authority(TETa) cycling to school project in partnership with the Department of Education. with an investment of R500 000, the project enables learners to reach schools on time and reduces travelling time to and from schools.

nedbank empowers youthhow do you empower youth in south africa? you invest in youth programmes like enke: make your mark, Enactus sa and the south african Graduate Development association (saGDa).

all these programmes aim to create new types of business leaders who are both economically skilled and socially conscious. Read about nedbank’s involvement in these programmes and how together we can make youth empowerment happen.

enke: make Your marknedbank assists this youth development organisation to bring young people from south africa’s townships and rural communities together to instil social sustainability into the country’s future leaders. Today, nedbank continues to contribute around R200 000 annually to help train 30 grade 11 learners on social responsibility and leadership skills, and offers holistic support to the beneficiary schools to help develop a more effective schooling system.

enactus sasince 2009, nedbank has invested millions of rands to assist Enactus sa (previously sIfE sa) in helping university students gain a practical understanding of economics while developing a culture of ethical business conduct. nedbank’s annual investment helps train hundreds of students to develop effective community outreach projects that focus on market economics, entrepreneurship, financial literacy and more.

Zuko xelelo, a nedbank Business Banking academy agriculture trainee, had this to say about his experience: ‘i have been part of Enactus since 2010, which helped me to grow professionally and personally. it’s the generous sponsorships from corporates such as Nedbank that have made Enactus SA to be where it is today.’

nedBank affiniTiesThe arts & culture TrustThe arts & culture Trust is a unique alignment of agencies involved in the development of culture and the fostering of creativity in sa through support of arts, culture and heritage projects. since inception the nedbank arts affinity has donated nearly R15m to acT.

Green TrustThe Green Trust focuses on community-based conservation, recognising that little will be achieved unless all of south africa’s

citizens are involved in the conservation of our natural heritage. In conjunction with wwf-sa’s conservation Division and advisers from respected conservation organisations in south africa, projects are selected according to strict criteria.

since inception, The nedbank Green affinity programme has donated nearly R150m to support nearly 190 environmental initiatives throughout south africa.

To date nedbank has assisted over 1 800 students through the nedbank external bursary programme allocating R75m in support of this initiative across all provinces.

nelson mandela children’s Trust (nmcf)The vision of the nmcf is to change the way the society treats its children and youth.

since the launch of the nedbank children’s affinity, nedbank has donated more than R40m to the nelson mandela children’s fund. In 2013 nedbank children’s affinity donations to the fund amount to R8,4m.

The sports TrustEstablished in 1995 as a joint venture with a shared goal of providing opportunities for all south africans to play sport.

since inception nedbank has donated nearly R15m to The sports Trust, which has disbursed over R62m for 260 major sporting projects nationally.

nedbank external Bursary programmeThe nedbank external bursary is a socioeconomic development initiative to fund academically able students who do not have the financial means to study full time towards a first degree through south african public universities.

To date nedbank has assisted over 1 800 students through the nedbank external bursary programme disbursing R75m in support of this initiative across all nine provinces.

with our key focus of education in support of sED, the nedbank mfc csI team supported the following initiatives during 2013:

■ nBI Beyond Educational Development programme

The aim of the programme is in support of teacher training and learner support. The assistance given has provided and equipped the learners in the classroom with the necessary tools to become creative leaders. This is done by incorporating the characteristics of creativity in every subject and doubling up creative development while getting to grips with the facts.

■ supply of classroom facilities in conjunction with the Department of Education across the north west, Eastern cape and Gauteng.

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definition of termsaffordable housing means for black households with a stable income, the amount of which will be determined annually

by the financial sector council.

agricultural development means involving integrated support for resource-poor black farmers, through enabling access to and the sustainable use of resources.

Black Economic Empowerment Transaction means

■ all transactions for the acquisition, by black people, of direct ownership in an existing or new entity (other than an smmE) in the financial or any other sector of the economy; and

■ joint ventures with debt financing of, other forms of credit extension to, or equity investments in BBBEE companies (other than smmEs).

direct Ownership means ownership of an equity interest, together with control over all of the voting rights attaching to that equity interest, which may include Equity Equivalents.

Empowerment financing means the provision of finance for, or investments in:

■ Targeted investment; and

■ Broad-Based Black Economic Empowerment Transactions.

Exempted micro Enterprise (EmE)

means an enterprise with an annual turnover of less than R5m. such an enterprise is awarded a level 4 BBBEE status as stated in the coGp. where such an entity is also more than 50% Black owned, it will be awarded a level 3 BBBEE status.

financial institutions means banks, long-term insurers, short-term insurers, reinsurers, managers of formal collective investment schemes in securities, investment managers and other entities that manage funds on behalf of the public, including members of any exchange licensed to trade equities or financial instruments in this country and entities listed as part of the financial index of a licensed exchange.

global policy means a globally and uniformly applied restriction, regulation or directive, whether technical or commercial, imposed on a foreign-owned financial institution by the parent company or on any financial institution by a regulator, which regulates that financial institution.

Targeted investment means debt financing of, or other forms of credit extension to, or equity investment in south african projects, in areas where gaps or backlogs in economic development and job creation have not been adequately addressed by financial institutions. It specifically means financing of or investment in.

Transformational infrastructure

means projects that support economic development in underdeveloped areas and contribute towards equitable access to economic resources. such infrastructure projects could be in the following sectors:

■ Transport; ■ Telecommunications; ■ water, waste water and solid waste; ■ Energy; ■ social infrastructure such as health, education, and correctional services facilities; and ■ municipal infrastructure and services.

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conTacT deTailswho to contact at nedbank: Gmcca Group Transformation unit:

kershini Govender

Tel: 011 295 7370

email: [email protected]

Quintus myburgh

Tel: 011 294 3042


desigan chetty

Tel:011 295 9431


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