The global economic crisis of 2008 and 2009 saw much of the world facing recessionary conditions, which resulted in the closure, or near closure, of a number of well-known and highly regarded international financial institutions. Despite having managed through the resulting financial crisis, Nedbank Group was left in no doubt regarding the importance of ensuring that its economic sustainability does not depend solely on external factors or the state of the economic environment in which we operate. This understanding that inherent economic sustainability is the bedrock of any viable and resilient business has led us to focus on developing and implementing worldclass governance and compliance practices and honing our risk management skills to ensure that, regardless of external forces, Nedbank Group is well-positioned to continue growing shareholder value, protecting the financial interests of our clients, employees and suppliers, and contributing positively to the economic future of the country.
|Targeted investments (Rm)||R1 137||R2 319|
|BEE transaction financing (Rm)||R911||R1 362|
The challenges impacting Nedbank’s ability to reach the target include the financial market meltdown, resulting in capital scarcity to finance black businesses and the higher risk requirements.
During the year under review Nedbank Retail also reengineered and increased the presence of the mobile sales team and the sales team’s product offering from four products to 12, and increased community-based product sales with a view to encouraging clients to reduce dependency on cash through the use of appropriate and affordable banking products.
Intermediaries are an integral part of the Nedbank Retail sales distribution strategy. During 2009 Nedbank Retail reviewed its mortgage originator agreements and pricing structures. Given our focus on meeting the needs of the mass market in particular, Nedbank Retail grew its direct sales capabilities in the Personal Loans Division and implemented an electronic interface to afford merchants easier credit applications and quicker turnaround times.
|Access to financial products (Mzansi Accounts)||78 261||317 286|
|Access to financial services – Reach (FSC sites)||7||0|
|Origination: Affordable Housing (Rm)||R1 290||R841|
|Black agriculture financing (Rm)||R45||R20|
|Black SME financing (Rm)||R200||R759|
|Client education – % of retail net profit after-tax spend per annum||0,20%||0,29%|
The aim of consumer education is the development of consumers’ skills, attitudes, knowledge and understanding of the financial sector and its products and services so that consumers are able to use consumer information effectively. Consumer education empowers consumers with knowledge and skills to enable them to make more-informed decisions about their finances and lifestyles. The resulting benefits include the correct use of financial products, greater confidence in making financial decisions and improved financial wellbeing.
More details and case studies regarding Nedbank Group’s Enterprise Development are included in the www.nedbankgroup.co.za .available at
Nedbank continued to be actively involved on the Banking Association’s Affordable Housing Committee, with the specific intent to develop the affordable-housing market by undertaking research and working closely with sector stakeholders, particularly the Department of Human Settlements.
Property Finance takes action
The Affordable Housing Unit of Property Finance is part-funding a housing development worth approximately R600 million in total development cost in Polokwane, Limpopo Province.
The mixed-use development, to be developed by Matome Maponya Investments (Pty) Ltd (MMI), will consist of 564 housing units catering for the FSC market and 845 houses for the gap market. This development is in line with government’s Breaking New Ground Policy.MMI is a diversified group operating in property and civil infrastructure development, middle- and low-income housing construction, disaster housing projects, industrial building renovations and engineering consulting and is 100% black-empowered.
Nedbank’s greatest current preferential procurement challenge is that of procuring from BWO suppliers. There are few large female-owned suppliers, and the majority of BWO suppliers are investment companies, as opposed to operating entities. Nedbank has thus enhanced efforts to source BWO suppliers through setting targets and subtargets at individual and business unit level.
Nedbank is partnering with two businesswomen organisations that will assist it to source BWO suppliers based on a number of identified opportunities such as facilities management, recruitment and catering. Nedbank will work with these organisations to assist in development areas and has assigned a senior commodity manager to this. Nedbank has identified the need to raise the number of black SMEs and the value of their spend through preferential selection.
It was launched in November 2007. The total portfolio size at the end of December 2009 was R5,1 million. The number of accounts at the end of December 2009 was 3 766 (2008: 1 630) (year-on-year growth of 131%).