To be the leader in Business Banking for SA:
The primary strategic thrust for Nedbank Business Banking is to continue its journey of business transformation to be the leader in business banking for SA as measured across the key dimensions of employees, clients (including primary-banked market share) and ﬁnancial performance. Emphasis is on the word 'for' SA, in recognition of the importance of Nedbank Business Banking's contribution towards enterprise development, job creation and community upliftment in the broader context of sustainable development.
Over the seven years to 2012 Nedbank Business Banking has delivered consistently high returns to shareholders (21% in tough times and over 30% at the peak of the interest rate cycle) and cumulative economic proﬁt (EP) of R3,4bn, while at the same time investing in the business in line with its strategic intent and guided by the ASCENT1 strategy roadmap. This has been achieved through consistent investment in people leadership and diversity, compelling, holistic client offerings with distinctive differentiators, organisational design aligned with strategic intent, disciplined risk management capabilities, pricing tools, tailored solutions for selected industries and overall market positioning.
The business continued on its ASCENT strategic journey to being the leader in business banking for SA and, thanks to the concerted efforts of our 2 200 staffmembers over many years, continues to perform well across all key metrics, including risk, clients and staff. The strong momentum has, however, been somewhat masked by the protracted economic difficulties being experienced by the entire SME sector.
Nedbank Business Banking is delivering an enhanced client experience as reflected in client satisfaction metrics reaching long-term highs. This is reinforced by our being awarded the second highest score ever out of 900 globally assessed companies for our customer management capabilities as measured in the 2012 Customer Management Assessment Tool (CMATTM) assessment. Proactive client calls and increased sales effectiveness, coupled with product, process and channel enhancements in line with Business Banking's Easy to do Business philosophy, increased the rate of gross new-client acquisition by approximately 60%. On the more stringent net client acquisition measure, based on transactional revenues, 775 net new primary-banked clients were acquired in 2012 (2011: 748).
Specific emphasis was placed on growing the small-business segment as a driver of future growth, not only for Nedbank Group, but also for the country as a whole. In this context Business Banking and RRB jointly launched the Small Business Friday™ campaign, inspired by our partner American Express' successful initiative in the US, to raise awareness and rally support for small business.
Business Banking also enhanced its overall offering to small businesses, ensuring the right mix of frontline skills, an appropriate risk appetite and greater speed of service enabled through preapproved facilities and simplified processes. A holistic approach was also taken to providing a seamless banking experience for business owners and their households, businesses and employees. Further innovative solutions, tailored to the needs of small businesses, are scheduled for release in 2013. This follows the successful recent launch of the mobile card point-of-sale device, PocketPOSTM, as an alternative mobile payment channel, as well as enhanced self-service capabilities in addition to clients' dedicated relationship bankers. A strong focus on enterprise development has benefited over
4 000 emerging entrepreneurs since 2009, including those in the agriculture sector. Nedbank Business Banking maintained its high-performance culture, as measured by the Barrett and Nedbank Staff Satisfaction Surveys, in a highly pressured environment through driving continuous change for greater effectiveness and an enhanced client experience. This resilience of our people is a result of continuous investments in skills development and visible leadership at all levels, with clear strategic direction complemented by ongoing, transparent communication.
|Year ended||% change||2012||2011|
|Headline earnings (Rm)||9,0||944||866|
|Efficiency ratio (%)||65,3||63,0|
|Credit loss ratio – banking advances (%)||0,34||0,53|
|Average advances (Rm)||(1,0)||58 958||59 563|
|Average deposits (Rm)||5,5||86 941||82 446|
|Allocated economic capital (Rm)||8,2||4 401||4 066|
|Return on equity (%)||21,5||21,3|
Nedbank Business Banking grew its headline earnings by 9,0% to R944m (2011: R866m) and generated EP of R368m (2011: R338m) with a return on equity (ROE) of 21,5%.
Although short-term earnings growth continues to be challenging in a low-growth economy, Nedbank Business Banking remains committed to the principles that have enabled consistently high returns on equity and an excellent CLR experience.
The excellent collaboration with Nedbank Retail in focusing on the small-business sector, expanding in key growth nodes, and optimising costs and footprint through the integrated-channel strategy is proving very valuable in enhancing the client experience and unlocking growth opportunities.
Emphasis is also on removing variability in the delivery of distinctive client-centred offerings and lowering cost to serve while remaining committed to the decentralised, accountable business service model and 'influencer' strategy to unlock the virtuous circle of the business owners, their business and employees, which are recognised by our clients as compelling differentiators.
With our highly committed, values-driven team of people, Nedbank Business Banking remains outwardly focused to partner with its clients for growth for a greater SA.
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