SEGMENTAL REPORTING
FOR THE YEAR ENDED 31 DECEMBER
The group’s identification of its segments and the measurement of segment results are based on the group’s internal management reporting as used for day-to-day decisionmaking. The segments have been identified according to the nature of their respective products and services and their related target markets.
Nedbank Capital
Nedbank Capital comprises the group’s investment banking businesses that together manage the structuring, lending, underwriting and trading businesses. Nedbank Capital seeks to provide seamless specialist advice, debt and equity raising and execution and trading capabilities in all the major South African business sectors.
Nedbank Corporate
Nedbank Corporate comprises the client-focused businesses of Corporate Banking, Property Finance, Nedbank Africa and the specialist businesses of Transactional Banking and Shared Services. These businesses focus mainly on providing lending, deposit-taking and transactional banking solutions and execution services to the wholesale banking client base of Nedbank Corporate Banking services companies with an annual turnover in excess of R400 million as well as black economic empowerment (BEE) and public sector clients. Property Finance specialises in commercial and industrial property finance in the middle to large corporate market and also invests in property equities and in large property developments in partnership with selected clients. Nedbank Africa has banking operations in Lesotho, Malawi, Namibia, Swaziland and Zimbabwe. Nedbank Africa operates in the retail and wholesale banking segments in each country.
Business Banking
Business Banking offers the full spectrum of commercial banking products and related services to companies with an annual turnover of up to R400 million.
Nedbank Retail
Nedbank Retail fulfils the financial services needs of individuals and small businesses through its offering of various transactional, card, lending, investment and insurance products. Nedbank Retail also services merchants and large corporates in respect of card-acquiring services. Services are provided through the brands within the Nedbank Retail stable, being Nedbank, Nedgroup Investments, BoE Private Clients, Fairbairn Private Bank and Fairbairn Trust Company. The retail product portfolio includes transactional accounts, home loans, vehicle and asset-based finance, card, personal loans, bancassurance, investments and specialised products such as wills, stockbroking and portfolio advice.
Imperial Bank
Imperial Bank is a joint venture with Imperial Holdings Limited and provides predominantly asset-based finance, with most advances comprising vehicle finance and selected niche market financing. The bank has four divisions, namely Motor Finance, Property Finance, Proffesional Finance and Supplier Asset Finance. Supplier Asset Finance is focused on financing office equipment for the business community, providing asset-based finance to the aviation, transport and material handling sectors, and rendering a specialised debt collection service. Professional Finance provides a range of asset-based financial products to the medical and dental markets in South Africa, making finance available for residential properties, motor vehicles, equipment, practice needs and project finance for large medical facilities by way of mortgage loans, instalment sale facilities and loans.
Shared Services
Shared Services is an aggregation of business operations that provide various support services to the Nedbank Group, which includes the following clusters: Group Technology, Group Strategy and Corporate Affairs, Human Resources, Enterprise Governance and Compliance, Group Risk and Group Finance – Shared Services.
Central Management
Includes group capital instruments together with certain group overheads not recoverable from business segments.
| Nedbank Group | Nedbank Capital | ||||||||
| 2009 | 2008 | 2009 | 2008 | ||||||
| STATEMENT OF FINANCIAL POSITION (Rm) | |||||||||
| Cash and cash equivalents | 18 375 | 18 674 | 2 875 | 2 488 | |||||
| Other short-term securities | 18 550 | 18 589 | 12 233 | 8 880 | |||||
| Derivative financial instruments | 12 710 | 22 321 | 12 471 | 21 972 | |||||
| Government and other securities | 35 983 | 42 138 | 12 519 | 11 466 | |||||
| Loans and advances | 450 301 | 434 233 | 55 315 | 47 686 | |||||
| Other assets | 34 784 | 31 068 | 3 393 | 3 473 | |||||
| Intergroup assets | – | – | 97 754 | 92 741 | |||||
| Total assets | 570 703 | 567 023 | 196 560 | 188 706 | |||||
| Equity and liabilities | |||||||||
| Amounts owed to depositors | 469 355 | 466 890 | 175 041 | 157 017 | |||||
| Provisions and other liabilities | 24 729 | 22 262 | 6 399 | 4 844 | |||||
| Derivative financial instruments | 11 551 | 23 737 | 11 404 | 23 521 | |||||
| Intergroup liabilities | – | – | |||||||
| Long-term debt instruments | 20 084 | 14 061 | 739 | ||||||
| Allocated capital | 44 984 | 40 073 | 2 977 | 3 324 | |||||
| Total equity and liabilities | 570 703 | 567 023 | 196 560 | 188 706 | |||||
| STATEMENT OF COMPREHENSIVE INCOME (Rm) | |||||||||
| Net interest income | 16 306 | 16 170 | 1 111 | 938 | |||||
| Impairments charge on loans and advances | 6 634 | 4 822 | 141 | 36 | |||||
| Income from lending activities | 9 672 | 11 348 | 970 | 902 | |||||
| Non-interest revenue | 11 906 | 10 729 | 2 235 | 1 782 | |||||
| Operating income | 21 578 | 22 077 | 3 205 | 2 684 | |||||
| Total operating expenses | 15 100 | 13 741 | 1 605 | 1 419 | |||||
| Operating expenses | 14 974 | 13 547 | 1 570 | 1 387 | |||||
| BEE transaction expenses | 126 | 194 | 35 | 32 | |||||
| Indirect taxation | 438 | 374 | 23 | 24 | |||||
| Profit/(Loss) from operations | 6 040 | 7 962 | 1 577 | 1 241 | |||||
| Share of profits of associates and joint ventures | 55 | 154 | |||||||
| Profit/(Loss) before direct taxation | 6 095 | 8 116 | 1 577 | 1 241 | |||||
| Direct taxation | 1 232 | 1 757 | 230 | (32) | |||||
| Profit/(Loss) after direct taxation | 4 863 | 6 359 | 1 347 | 1 273 | |||||
| Profit attributable to non-controlling interest: | |||||||||
| – ordinary shareholders | 242 | 257 | (2) | 7 | |||||
| – preference shareholders | 344 | 337 | |||||||
| Headline earnings | 4 277 | 5 765 | 1 349 | 1 266 | |||||
| SELECTED RATIOS* | |||||||||
| Average interest-earning banking assets (Rm) | 481 378 | 441 713 | 139 087 | 106 770 | |||||
| Return on average assets (%) | 0,8+ | 1,1+ | 0,7 | 0,8 | |||||
| Return on risk-adjusted capital (%) | 11,5+ | 17,7+ | 45,3 | 38,1 | |||||
| Interest margin (%) | 3,39 | 3,66 | 0,80 | 0,88 | |||||
| Non-interest revenue to gross income (%) | 42,2 | 39,9 | 66,8 | 65,5 | |||||
| Credit loss ratio (%) | 1,47 | 1,17 | 0,26 | 0,06 | |||||
| Efficiency ratio (%) | 53,5 | 51,1 | 48,0 | 52,2 | |||||
| Efficiency ratio (excluding BEE transaction expense) (%) | 53,1 | 50,4 | 46,9 | 51,0 | |||||
| Effective taxation rate (%) | 20,2 | 21,6 | 14,6 | (2,6) | |||||
| Contribution to group economic profit (Rm) | (74) | 1 790 | 955 | 805 | |||||
| Number of employees | 27 037 | 27 570 | 695 | 693 | |||||
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| Depreciation of R632 million (2008: R616 million) and amortisation of R497 million (2008: R414 million), costs for property, equipment, computer software, capitalised development and other intangible assets are charged on an activity-justified transfer pricing methodology by the segment owning the assets to the segment utilising the benefits thereof. | |||||||||
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