A passion for making things happen in the lives of less fortunate individuals has seen Nedbank Group earn a reputation as a caring financial institution- a reputation that it is determined to live up to by taking a genuine interest in improving the health , education and wellbeing of the communities in which it operates, while empowering its staff and clients to do the same.

Aligned with the group’s key material issue to build societal capital in South Africa, this section of the report includes information on:

Socioeconomic development (SED)
• Corporate social investment (CSI)
• Consumer and sustainability education
• Nedbank Affinities
• Nedbank Group Sponsorships

Beyond compliance
• Access to financial services
• Targeted investments
• Black economic empowerment (BEE) transaction financing

Enterprise development (ED)
Preferential procurement

SOCIOECONOMIC DEVELOPMENT

When it comes to supporting, uplifting and empowering individuals and communities, Nedbank Group takes the term ‘socioeconomic’ literally. Based on the belief that neither ‘social’ nor ‘economic’ can be fully effective on its own, this component of the group’s social sustainability thrust comprises both economic and social development initiatives. Wherever possible, these are closely and fully integrated to deliver lasting results relating to the living conditions, financial situations, business potential and transformation of individuals and companies benefiting from the group’s social sustainability commitment.

While this commitment is never purely target-driven, the Department of Trade and Industry (dti) Codes stipulate that 1% of SA net profit after tax (NPAT) (based on the 2009 financial year) should be allocated to SED. For Nedbank Group this equated to R54,1 million.

The following chart illustrates the group’s performance against the compliance target since the inception of the dti Codes. Nedbank Group has consistently spent more than the minimum required, which is aligned to its commitment in this area. Socioeconomic development spend for 2010 was more than R 79 million (1,46% of NPAT).

Corporate social investment – nedbank foundation

For Nedbank Group CSI is a non-negotiable business imperative and a responsibility shared by all stakeholders in South Africa. There are no quick fixes and the group seeks out long-term projects with the potential to sustain themselves once an initial investment has been made.

As the primary CSI arm of Nedbank Group, the work of the Nedbank Foundation is key to the group’s social sustainability efforts. To ensure that the difference it makes to individuals and communities in need is a lasting one, the foundation focuses its efforts and contributions on:

• Education – including school-based educational projects, early childhood development (ECD), rural-school refurbishment, teacher training, tertiary education and other government-identified priorities.
  
• Community development – with a particular focus on initiatives that support and care for communities in need and vulnerable groups.

• Skills development – including training, skills development and enterprise support and development.

• Health – including interventions for people with disabilities, diseases such as HIV/Aids, cancer, diabetes and tuberculosis (TB), as well as providing training and infrastructural development in
  communities.

By carefully and equitably aligning its CSI spend across these primary focus areas, Nedbank Group avoids the risk of diluting its financial support to the point that it is no longer an effective enabler of transformation, upliftment and development within the targeted communities. Funding is granted only after a comprehensive investigation of the applications received and no political or discriminatory organisations are supported.

The positive impact of the Nedbank Foundation’s support is further enhanced by the fact that it is never merely a financial injection. Once approved, ongoing monitoring of projects, input by business and social upliftment experts, and administrative assistance ensure that the supported projects are sustainable and have a significant impact on as many beneficiaries as possible.

To ensure that all projects or initiatives supported by the foundation are in line with its specified focus areas and the group’s social sustainability objectives a rigorous funding approval process is followed:

• A background check is performed, including requests for information on the organisation and individuals within that organisation.
• A Nedbank Foundation official conducts a face-to-face interview with representatives of the organisation to understand the project needs.
• A Nedbank Foundation official visits the project to confirm the information received.
• The Nedbank Foundation ensures that proper financial control measures and governance structures exist within the project.
• The confirmation of cofounders’ names eliminates the possibility of a conflict of interest, and avoids reputational risk to the bank and duplicated funding for the same purpose.

Proposals are approved by the head of the foundation, the management committee or the board of trustees, depending on the value of the proposal.

During 2010 the Nedbank Foundation spend was R 35,08 million* (2009: R 30,5 million) in support of 283 projects and causes (2009: 291) in all nine provinces of South Africa.
* Includes direct project spend: R28, 94 million.

*Corporate Social Investment

Over the course of the past five years the Nedbank Foundation has provided funding in excess of R 131 million to projects in its stated areas of focus across South Africa.

*Corporate Social Investment

Gauteng non-government organisations (NGOs) have historically received the majority of funding provided by the Nedbank Foundation. This is largely due to the fact that the NGO sector based in the area is more developed and therefore more ably taps into the funding available. In 2011 greater focus will be put on increasing the spend across the provinces in line with population density.

Measurement of the impact of the projects funded by the foundation is key and a full impact study is to be undertaken in 2011. During 2010 the impact was measured via regular project visits and reporting from the NGOs concerned.

While it is beyond the scope of this report to provide information on all projects supported by the Nedbank Foundation, the following examples of projects offer some insight into the effectiveness of the foundation’s focused CSI approach.

Nedbank foundation projects

EDUCATION

Protec
Protec is an NGO that provides high-quality, affordable Science, Mathematics and Technology Education, as well as a career development programme to learners in previously disadvantaged educational districts.

Protec’s aim is to produce economically and technologically literate citizens who will contribute towards a technologically sophisticated economy in a democratic South Africa.

The Nedbank Foundation sponsored a teacher development and support project, focused on Mathematics, Science and Technology Education training, through inservice training and classroom-based support.

‘I’m a hard-working educator, who is prepared to learn against all the odds to empower myself. Through the support I received from Protec, I was able to offer Physical Science lessons with confidence.’
Ms SD Mogomotsane, Physical Science educator at President Mangope Technical High School

Financial support
R434 000

Beneficiaries:
A total of 30 teachers and more than 3 000 learners from 10 different secondary and high schools in the area.

Impact
It is evident from the results achieved in both Mathematics and Science that the teaching methodologies used at Protec are having a positive impact. The project is not only helping learners to understand these important subjects, but also equipping teachers to continue imparting their knowledge to future learners.

Leema Primary School
The school serves the educational needs of three rural villages, but given the socioeconomic challenges of the region, money is particularly scarce and learning conditions are poor. The situation had become so bad that, when it was raining, lessons had to be stopped due to the leaking roofs.

The Nedbank Foundation provided funding for infrastructural expansion and improvement to facilitate learning for grades R to 7. In addition, financial contributions were made towards the funding of rainwater-harvesting tanks, a borehole, a revamped playground area and a vegetable garden with fencing for the school’s feeding scheme. The Nedbank Foundation also donated a mobile library, with a combination of teacher training and learner reading material both in English and Setswana.

‘Through this donation received from the Nedbank Foundation, we now have access to more learners and can provide better attention to each child.’
A teacher from Leema Primary School

Financial support
R250 000

Beneficiaries
Nine teachers and 376 learners from three surrounding villages, Marogong, M abeleng and Tlhatlanyane.

Impact
Previously 68 grade R and 1 learners shared one classroom. With the additional three classrooms grade R and 1 learners are more comfortably accommodated, resulting in a far more positive learning experience.

HEALTH CARE

Msunduzi Hospice
Msunduzi Hospice assists and cares for members of the surrounding communities – many of them children – who have life-threatening illnesses. The organisation recently set up a programme offering community-based psychosocial support and clinical support to orphans and vulnerable children and women, and families infected and affected by HIV/Aids. Thanks to the donation from the Nedbank Foundation, the Memory Work Project, which is part of the hospice’s children’s team programme, has been able to continue having a meaningful impact on the lives of children and their families.
The overall objective of this project is to enhance resilience in vulnerable children and orphans affected by HIV/Aids. If children know the history of their parents, they are better able to overcome the suffering caused by the illness or death of their parents.

Financial support
R131 735

Beneficiaries
Altogether 499 patients were cared for at the hospice during 2010 for illnesses ranging from HIV/Aids and cancer to TB.

Impact
Through the programme these vulnerable children are given a sense of their family and culture, which provides much-needed courage and the strength to face their illnesses.

The programme is also a key feeder project for the mobilisation of community-based paediatric palliative care practice, provision of nutritional support and support to the many women, both infected and affected, who have to care for their own children and those of deceased family members or friends.

EDUCATION

Financial support
R2,6 million

Beneficiaries
More than 2 000 grade 12 learners monthly.

Impact
The programme was especially relevant in 2010, given the extensive strikes that took place at the time of the matric examinations. Where comparative 2009 data was available from the schools, an average of a 9% improvement in results was shown.

COMMUNITY DEVELOPMENT

HIPPO WATER ROLLERS
Designed to hold up to 90 litres of water, the Hippo Water Roller is a large reinforced drum with a metal handle, which allows it to be pushed or pulled over various types of terrain – making it far easier for rural community members to collect and transport large volumes, but make fewer trips to the water source. These Hippo water rollers are very durable and can last up to five years before maintenance is required, which makes it a long-term solution for the community.

Thanks to the financial support of the Nedbank Foundation, the first 450 Hippo Water Rollers were handed over to recipients in Eastern Cape rural communities and another 450 to residents in Mpumalanga in 2010.

In addition to the Hippo Water Rollers, the foundation also funded the provision of boreholes in a number of the communities.

Financial support
R1,3 million

Beneficiaries
Some 250 000 community members, many of them women and children who have to carry water for their families.

Impact
The impact of this project on communities has been huge, especially for the school-going children who are responsible for collecting water during school hours for their families. It is estimated that the Hippo water rollers save about four hours a week in collection time, which means the children can now spend more time at school, focusing on their education.

SOCIOECONOMIC DEVELOPMENT

Vezokuhle Youth Development Project
Crime is a threat to democratic and individual rights. As a business Nedbank is aware of the role it can play in helping to fight crime. In addition to supporting Business Against Crime, this project is another example of Nedbank Group’s other crime-fighting initiatives.

Vezokuhle Youth Development Project (VYPD) offers life skills training to young prisoners to help them reintegrate into society and also offers viable, sustainable training to the youth of the Nelson Mandela Metro (NMM) and the broader community of Eastern Cape Province. Through its programmes, this dynamic youth-driven organisation is reaching numerous school-going youths, out-of-school (unemployed) youths and young people infected with and affected by HIV/Aids. Nedbank Group’s sponsorship of the programme effectively cuts across its skills development and education development focus areas by empowering these young people to rejoin society and become contributors to the SA economy.

Financial support
R500 000

Beneficiaries
More than 30 ex-offenders and community members of NMM communities.

Impact
To date 13 out of the 30 ex-offenders have been trained in electronics, computers, electrical engineering and catering. Altogether 10 ex-offenders have been placed in direct jobs and there still need to complete the training. For those who have not found employment VYDP provides assistance in starting self-owned businesses. Eight offenders have registered to undergo the Nedbank Foundation funded programmes during 2011. These former inmates have been screened and home visits have been conducted. The next training intake will start in March 2011.

Staff volunteerism

As an integral part of our cultural sustainability, Nedbank Group encourages its employees and clients to play their part in uplifting and empowering communities. This fosters a culture of selflessness and builds a strong sense of community spirit.

Nedbank Group operates two successful staff volunteerism programmes in the form of the Local Hero Programme and the Nedbank Team Challenge. Through these volunteer programmes employees of Nedbank Group are afforded the opportunity to work with causes close to their hearts and, with the financial support of the foundation, make a tangible and lasting difference to people less fortunate than themselves.

The group also partners with its clients through the Local Hero programme. The client aspect of the programme allows Nedbank Group to make a tangible and sustainable impact on many smaller organisations that are often overlooked by large CSI initiatives.

Staffmembers are also encouraged to participate in a voluntary payroll giving initiative, in which they donate funds monthly to the SA Children’s Charity Trust (SACCT), to support five charities across different sectors.

Apart from these initiatives, the Nedbank Foundation encourages staff members to volunteer their time to share their skills on an ad hoc basis at events such as National Volunteer Week, Nelson Mandela Day and the Angel Tree project.

The total spend by the Nedbank Foundation in support of volunteer programmes for the year to 31 December 2010 amounted to R2 047 588 (2009: R 2 250 000). The spend in this area decreased slightly as a result of fewer requests for funding being received from staff. During 2011 efforts to encourage more participation in the various staff volunteer programmes will be ramped up.

‘QASA is extremely proud to be a beneficiary of Nedbank’s Payroll Giving programme. This important and essential revenue is used to fund our development projects. In 2010 we offered 14 bursaries for education of our quadriplegics and paraplegics, together with the opportunity for them to participate in sport. Another project that is now being supported by the Payroll Giving programme is a driver training programme. In 2010 this gave 14 people with disabilities the opportunity to learn to drive. The Nedbank Payroll Giving programme plays a huge part in the improvement and development of the lives of people with disabilities.’ Ari Seirlis, National Director, QASA The Dream Makers team was the winning team in the 2010 Nedbank Team Challenge. In addition to making a difference in the lives of the educators and children at the Ecclesia Educare Centre in Bellville, Cape Town, the team earned R 50 000 towards further sustainable improvements at the centre. But just as importantly, they discovered that, when you are willing to give of yourself to help others, your life is made richer in return. Ecclesia cares for 60 children between three months and five years of age, and the daily hustle and bustle of 60 pairs of little feet had begun to take its toll. Team leader Dawn Booysen recognised an opportunity to make a difference and rallied her colleagues from various Nedbank business areas to establish the Dream Makers team. After a full analysis of the crèche’s needs, the team set to work – doing everything, from cleaning up the grounds, fertilising the soil and painting the building, to raising R 13 000, planting a vegetable garden, and acquiring wind turbines and a solar geyser – all with a view to making the centre comfortable for the children, self sufficient and sustainable. ‘For most of us, this was a life-changing experience,’ says Dawn, ‘we learned the value of caring for others and sharing our time and abilities and all of us discovered how rewarding it is simply to share your heart with other people and make the effort to care for them.’ The fact that the Dream Makers used sustainable, environmentally friendly solutions to meet the needs of the crèche made this project a clear winner. On the back of its success the Dream Makers team is now turning its attention to the surrounding communities.

Nedbank Group staffmembers are not forced to participate in the staff volunteer or Payroll Giving programmes, but are encouraged to get involved if they wish to make a difference in the lives of others.

Feedback from employees who participate in the programmes reveals that they enjoy immense personal growth, are hugely motivated and inspired by their involvement, and gain great personal satisfaction from knowing that their efforts are helping others. Many also point out that they have gained valuable experience and life skills through their involvement, while the tremendous sense of unity that is built among team members is brought back to Nedbank Group, serving to enhance the corporate culture and sense of unity of the entire organisation in the process.

consumer and sustainability education

Consumer education
Nedbank Group is acutely aware of the need for effective financial education among SA consumers – particularly given the current difficult economic conditions. The group places a high priority on educating consumers and clients, and a number of initiatives were undertaken in this regard in 2010, including:

Click to enlarge

Consumer education was offered to the M etro Police of eThekwini and Johannesburg through their academies. Education sessions have also been conducted among traditional leaders of KwaZulu-Natal and Eastern Cape, and via the KwaZulu-Natal expanded public works programme (EPWP ).

Sustainability education
During 2010 Nedbank Group launched its Caring for Communities sustainability education programme, which aims to impart knowledge and understanding of environmental, economic, social and cultural sustainability to community members across the country. Through interactive course content that engages adult and youth attendees, and concludes with a practical application of the learning, the Caring for Communities programme has enjoyed significant success. (For details of the programme please refer to the case study here.)

Nedbank AfFinity programme review for 2010

Nedbank Group is committed to enabling its staff and clients to make a difference in the lives of those less fortunate and to the world in which they live. This cooperative approach to social and environmental sustainability not only enhances the effectiveness of the group’s efforts, but also increases the group’s sustainability reach and contributes to the creation of a more inclusive mindset among all stakeholders. The continued success of the Nedbank Affinity programme also serves as proof of the value that can be unlocked via a highly integrated approach to sustainability – for the organisation, the beneficiaries it serves and the environment (as outlined in the Environmental Sustainability section of this report on here).

The Nedbank Arts Affinity and the Arts & Culture Trust

The Arts & Culture Trust (ACT) was established with the purpose of attracting funding for the sustainable development and growth of the arts, culture and heritage in South Africa. ACT has funded nearly 600 projects in the development areas of job creation, creative skills, management skills, cultural diversity and cultural tourism marketing.

Examples of the projects and initiatives funded by ACT in 2010 include:

The ACT Development Programme, which funds programmes that support artistic excellence in creative production, professional development and training for the youth, ie:

• The Break A Leg Drama Project, which provides free drama training and life skills coaching to children from previously disadvantaged communities in Western Cape.
  
• Drama for Life, which is a unique cross community HIV/Aids arts education, activist and therapeutic intervention in the form of a travelling festival.
  

Since inception the Nedbank Arts Affinity has donated more than R10 million to ACT. In 2010 Nedbank Affinity donations to the Arts & Culture Trust grew by 9% to R872 216 (2009: R 743 986).

The Nedbank Children’s Affinity and the Nelson Mandela Children’s Fund

The Nedbank Children’s Affinity was launched in mid-2005 in partnership with the Nelson Mandela Children’s Fund (NMCF). The vision of the NMCF, which was founded by former president Nelson Mandela in 1995, is to ‘change the way society treats its children and youth’. The fund was established to look after orphaned and vulnerable children. To achieve this it supports five key strategic programme areas, namely:

• The wellbeing of a child – strengthens families and communities to mitigate the impact of both HIV/Aids and child abuse.
  
• Leadership and excellence – identifies and nurtures youth with leadership potential.
  
• Skills development – realises the potential of young people to contribute positively to their own development and that of others.
  
• Disability – improves the quality of life of disabled children and youth.
  
• Goelama – builds links between services offered by government and NGOs in communities.

Examples of NMCF-supPorted projects include:

• The Champions for Children Campaign, which builds a national movement for the protection, safety, care and nurturing of children.
• Diketso Eseng Dipuo (DEDI), which enables young and old women in and around Smithfield, near Bloemfontein, to take charge of their lives through training.

Since inception the Nedbank Children’s Affinity has donated over R25 million to the NMCF. In 2010 Nedbank Affinity donations to the NMCF amounted to more than R5,7 million (2009: R 5,8 million).

The Nedbank Sport Affinity and The Sports Trust

The vision of The Sports Trust is to build active communities by providing all South Africans with opportunities to play sport. It provides sporting equipment and upgrades sporting facilities in outlying or previously disadvantaged communities, advances sport in South Africa, helps to identify young sporting talent, and offers coaching and training programmes.

Examples of the projects supported by The Sports Trust in 2010 include:

• 100 Days, 100 Kits for 100 Schools, a programme that saw 100 soccer kits donated to 100 schools in 100 days.
  
• Nedbank Sports Trust Cycling Programme, which donated 151 bicycles, helmets and cycling kits to children from the Boland and Cape Flats in 2010.
  
• The Sports Trust Golf Challenge, which is held the day after the Nedbank Golf Challenge and raises more than R 1 million for the trust each year.
  

Since inception the Nedbank Sport Affinity has donated over R10 million to The Sports Trust. In 2010 Nedbank donations grew by 81% to nearly R1,9 million (2009: R 1,02 million).

Nedbank Group Sponsorships

While the primary aim of Nedbank Group Sponsorships is to provide a platform on which to profile the Nedbank brand, the group is also committed to harnessing its sponsorships to make a difference in the lives of people from the various communities in which it operates. This commitment is clearly demonstrated through the strong developmental focus of all sponsorship opportunities. Nedbank Group’s portfolio of sponsorships currently includes:

Golf
The profile of golf in South Africa has changed dramatically in recent years and the sport offers opportunities for sponsorship at every level, from professional competition to golf development and golf for people with disabilities. By sponsoring golfing events, Nedbank Group reaches a large section of its existing client base, as well as its target market. Through this sponsorship it also reaches the emerging market and contributes to the development of golf among the previously disadvantaged.

Nedbank Group’s current golf sponsorship portfolio includes:
• Nedbank Golf Challenge.
• Nedbank South African Disabled Golf Open.
• Nedbank Affinity Cup (Sunshine Tour event).
• The Sports Trust Golf Challenge (in cooperation with Sun International).

The Sports Trust Golf Challenge. This joint initiative between Nedbank Group and Sun International raises R1 million in aid of sport development annually and is played on the Gary P layer course the day after the Nedbank Golf Challenge. To date over R10 million has been raised in aid of The Sports Trust through this event.

The Nedbank Affinity Cup. This forms part of the Sunshine Tour and is played on the Lost City Golf Course three days prior to the Nedbank Golf Challenge. Nedbank Group donates an annual amount equal to the winner’s prize money to a Nedbank affinity of the winners choice.

Sport for the disabled
Nedbank Group’s association with sport for the disabled dates back to 1992, with the sponsorship of the annual Nedbank National Championships for the Physically Disabled and cosponsoring the SA Paralympic Team, to which the group has committed its support (along with six other corporate sponsors) for Team South Africa to the 2012 London Paralympic Games.

This sponsorship has already generated significant benefits for sport for the disabled, with a number of athletes competing at the Nedbank National Championships for the Physically Disabled being selected for the SA Paralympic Team. The impressive list of athletes includes Paralympic triple-gold-medalist, Oscar Pretorius, and Hilton Langenhoven.

Nedbank Group’s current ‘sport for the disabled’ sponsorship portfolio includes:

• Nedbank National Championships for the Physically Disabled.
• Nedbank Technical Excellence and Administration Programme.
• Nedbank South African Disabled Golf O pen.
• Partner to the South African Paralympic Team.

Road running
With its low barrier to entry, road running is one of South Africa’s most accessible sports. As such, the sport gives Nedbank Group an excellent platform from which to engage effectively with participants and spectators across the country. The group operates 13 running clubs in all nine provinces. During 2010 these Nedbank Running Clubs enjoyed a steady increase in membership, growing from 1 800 runners in 2009 to 2 300 in the current financial year. Two of the clubs are specifically identified as having a development focus, while the remainder are effective in building the profile of road running in general.

Nedbank Group’s current road running sponsorship portfolio includes:

• The Comrades Marathon (cosponsor).
• Nedbank Running Clubs.

In 2010 Nedbank Group presented a cheque for R 80 000 to The Sports Trust. Funds were collected from runners during various road running activities and were generated through the group’s involvement at the 2010 Comrades Expo.

Brand ambassadors
While Nedbank Group does not sponsor individuals, since 2007 it has appointed and supported a number of ‘brand ambassadors’, who represent the Nedbank brand and promote the association of the group with various sports or sponsorship properties. In 2010 Nedbank Group had two brand ambassadors in the form of Hilton Langenhoven (sport for the disabled) and René Kalmer (road running), both of whom are exceptional sporting talents and appeared at roadshows, functions and prize givings. They also featured in certain Nedbank Group advertising campaigns.

Soccer
Nedbank Group sponsored the Nedbank Cup – the South African Premier Soccer League’s official knockout cup competition – for the third time in 2010. The competition features 32 teams – 16 from the Premier League, eight from the National First Division and eight from the South African Football Association – and is the only cup competition that addresses football development through the inclusion of both professional and amateur teams.

Nedbank, in partnership with The Sports Trust, celebrated the 2010 Nedbank Cup season with a campaign aimed at giving underprivileged children an opportunity to enjoy the game of soccer. Titled 100 Kits to 100 Schools in 100 Days, the campaign saw no fewer than 100 schools across the country receiving full soccer kits during the leadup to the 2010 FIFA World Cup.

The Businesswomen’s Association
Nedbank Group has sponsored and supported the Business women’s Association (BWA) for the past 10 years. The annual BWA South African Women in Leadership Census, in partnership with Nedbank Group, has grown in stature over the past seven years and now plays a pivotal role in gender transformation within corporate South Africa. By highlighting the progress that has been made and the disparities that still exist, the census delivers a constant reminder to corporate South Africa of the need to transform.

Cape Winemakers Guild
Nedbank Group’s sponsorship of the CWG enables the group to be highly involved in the country’s wine industry and supportive of its transformation. Established by Nedbank Group and the CWG in 1999, the Nedbank Cape Winemakers Guild Development Trust is wholly funded by donations and proceeds raised through silent and charity auctions at various Nedbank/CWG events throughout the year. The trust invested more than R 500 000 in social upliftment, scholarship and mentorship programmes for aspiring winemakers in 2010. The trust also provides finance for infrastructural projects at local schools, school tuition fees and bursaries for potential Protégé Programme students.



The Nedbank and Old Mutual Budget Speech Competition
Now in its 39th year, this competition (run in cooperation with the Department of Finance) aims to contribute to economic excellence in South Africa by promoting the principles of sustainable economic development, developing future leaders in the field of economics, making young South Africans excited about Economics as a subject and career path among pre- and postgraduate students.

BEYOND COMPLIANCE

As one of the main financial institutions in South Africa, Nedbank Group plays an important role in improving access to financial services for previously disadvantaged individuals, businesses and communities. This is primarily achieved through delivery in areas previously measured under the Financial Sector Charter (FSC), but not included in the dti Codes, including:

• Access to financial services.
• Targeted investments.
• BEE transaction financing.

Access to financial services

By way of realising its vision of being a bank for all South Africans, Nedbank Group continues to invest in making banking services and accounts more accessible to all members of South Africa’s population. The table below shows the financial aspect of that investment commitment during 2010:

Mzansi
Nedbank adopted the industry standard Mzansi product, opting not to introduce its own similar product given the affordability of Mzansi Accounts for the previously unbanked market. Nedbank Retail has implemented mobile sales teams that visit rural settlements to help residents open Mzansi Accounts. This has been a key driver of the group’s continued success in terms of Mzansi Account acquisition. The table below illustrates the number of open and active Mzansi Accounts at 31 December 2010 (since 1 January 2009):

Nedbank branches
In 2010 Nedbank Group opened five new branches dedicated to the needs of the previously unbanked market: two in Gauteng (Soshanguve and Westonaria) and three in Western Cape (Nonqubela, Z evenverwacht and Nomzamo).

ATMs
Nedbank Group has maintained its steady penetration of the market, recognising the accessibility of ATMs as secondary only to a full function branch in terms of the provision of financial services.

number of nedbank atms

Targeted investment

Targeted investment by Nedbank Group comprises the following subcategories:

• Transformational infrastructure.
• Affordable housing.
• Black agriculture financing.
• Black small and medium enterprise (SME) financing.

The graph below shows Nedbank Group’s performance in each of these areas in 2010:

Transformational infrastructure
Transformational infrastructure deals with the financing of the supply of basic infrastructure in previously disadvantaged areas, which can include, but is not restricted to, water, sanitation, schools, roads and any other infrastructure that can help the area become more productive and inclusive within the mainstream economy. Some of the major projects funded during 2010 included:

• City of Johannesburg Metropolitan Municipality – R 1,8 billion in various loans mainly required for the 2010 FIFA World Cup (ie stadiums such as Soccer City), water and sanitation infrastructure, electricity and road/transport infrastructure such as the Bus Rapid Transport System (BRT).
  
• City of Tshwane – R 720 million as part of the R 1 081 billion long-term funding for its approved 2009/2010 capital expenditure programme.
  
• eThekwini – A R 500 million term loan as part of the ongoing integrated development plan to meet the requirements of the infrastructure service delivery programme for the municipality.

Affordable housing
With the exclusion of affordable housing from the dti Codes, the sector is legally unable, in terms of the Competition Act, to set an industry affordable-housing target. Notwithstanding this impasse, Nedbank Group has agreed its own internal five-year target.

This target market remains under affordability pressure due to ever-increasing property (land) and building prices. Fortunately, the stable interest rates over the reporting period have not added further pressure to new and existing clients.

Nedbank Group has remained actively involved with the Banking Association’s Affordable Housing Committee, with the specific intent to develop the affordable-housing market by undertaking research and working with sector stakeholders, particularly the Department of Human Settlements.

Black agriculture financing
Challenges in agriculture continue to impact on overall investment in the sector. Nedbank Group has embarked on various strategies and initiatives to help to transform this market and has been vocal and visible in the media and the market with its view on sustainable land reform. One of the key focus areas remains private-public sector partnerships through collaboration between corporate companies, industry bodies and government. Regionally, through value networking and sponsorships, the group is linking up with government, industry bodies and organised agriculture to identify current and proposed projects.

Nedbank Business Banking has formalised a national agriculture structure, which provides strategic direction and coordination of agricultural initiatives and processes. In line with this, and the rolling out of an agriculture operating model nationally, additional resources have been allocated to provide strategic intent and additional capacity to service the sector.

Black SME financing
Nedbank Group is actively engaged with the SME market and puts a specific focus on the financing of black SMEs through the delivery of innovative solutions to this market segment, such as the ‘Free banking’ offer to startup small businesses. Furthermore, the group has given priority to markets where it previously had a limited presence, such as business communities in townships.

Black economic empowerment transaction financing

The supply of equity and transaction financing for BEE companies other than exempt micro-enterprises* (EMEs) and qualifying small entities** (QSEs) that formed part of the FSC, is known as BEE transaction financing. This is a particular area of strength for Nedbank Group. The financing enables black-empowered and black owned entities to achieve their own growth goals and prosper in the long term. Equity deals allow ownership by more people, promoting the sharing of wealth and sustainable development of the economy.

* EME – annual turnover of less than R 5 million.
** QSE – annual turnover of between R 5 million and R 35 million.

ENTERPRISE DEVELOPMENT

Nedbank Group’s alignment with the financial reporting cycle means that ED is measured based on annual performance against the previous year’s NPAT. The group’s qualifying ED contributions include:

Engagement with municipalities and provincial governments remains a crucial component of sustainable enterprise development for Nedbank Group, particularly through its participation in various incubator programmes that create sustainable businesses and boost job creation. Nedbank Business Banking participates in various such programmes and interventions through the provision of grant funding, training and capacity building.

PREFERENTIAL PROCUREMENT

During 2010 Nedbank Group improved its performance against all procurement targets, with an overall BEE spend of 85,12% (up 1,7% on 2009). In the subtargets the SME spend was at 27,13%, the blackowned enterprises spend was 12,56%, and the black-women-owned (BWO ) enterprises spend was 5,24%.

This combined spend translates to a total score for procurement of 19,75 (2009: 18,79) on the generic dti scorecard. P articularly noteworthy is the improvement in the BWO spend, which rose from 2,27% in 2009 as a result of specific strategic objectives and initiatives in this area. Early payment of suppliers amounted to more than R224 million.

The following table and graph represent Nedbank Group’s 2010 scorecard for preferential procurement:

Nedbank Group ’s 2010 scorecard for preferential procurement