Overview

Nedbank Bancassurance and Wealth provides services across Retail, Business and Corporate Banking as well as the high-net-worth segment and independent financial adviser market. The businesses within Bancassurance and Wealth encompass life assurance, short-term insurance, financial planning, stockbroking, insurance brokerage, private banking, fiduciary services and asset management.

Strategy

The year 2009 has been significant for Bancassurance and Wealth. With effect from 1 June 2009 Nedbank acquired the remaining shares of the previously held Old Mutual joint ventures:

• 50% of BoE (Pty) Limited;
• 50% of Nedgroup LifeAssurance Company; and
• 29,7% of Fairbairn Private Bank.

The purchase of the joint ventures has removed all structural and legacy obstacles. This now presents an opportunity to become more client-centric, simplify focus and maximise value through cross-selling and further penetration of the Nedbank client base. As a result the component businesses of Bancassurance and Wealth have been restructured to drive and deliver on this strategy. The most significant changes to the structure is the consolidation of four previously independent asset management operations and the alignment of the local and international Wealth Management businesses into a single high-net-worth business and proposition.

The positioning of Bancassurance and Wealth as a new client-facing cluster has emphasised the focus and opportunity that Bancassurance and Wealth presents in growing non-interest revenue (NIR) and economic profit (EP).

Review of 2009

We started 2009 amid a global financial crisis, with international interest rates at record lows and the local economy firmly in recession. The weak domestic demand and retail sales conditions remained challenging throughout most of the year.

Regardless of the tough operating environment, overall financial performance has been satisfactory with Bancassurance and Wealth headline earnings totalling R480,6 million for the year. On a like-for-like basis overall earnings were down 7,2%, while expense growth was well-controlled at 5,6%. The return on risk-adjusted capital at 54,62% is down on the 62,6% achieved in 2008, primarily as a result of the acquisition of the joint ventures.These results have been included in Nedbank Retail results for 2009, but will be reported separately for 2010.

The asset management division increased assets by 12,3% to R93,6 billion. While international assets under management declined, the domestic asset management business had strong net inflows of R7,2 billion on the back of good fund performance. Nedgroup Investments were recently awarded third place in the Domestic Management Company of the Year Awards, and received two Raging Bull awards for individual funds.

The Bancassurance Division had a very successful year, despite higher lapses and claims. The short-term insurance gross written premiums totalled R669 million, up 14,5% on 2008. The life assurance business achieved excellent results with annual premium equivalent growth of 30,0% and value of new business growth of 54,0%.

The Wealth Management Division was impacted by increased impairments, particularly in BoE Private Clients where the credit loss ratio deteriorated to 0,81% from 0,34% in 2008. In addition the UK environment of record low interest rates resulted in a reduction of net interest income in Fairbairn Private Bank from £14 million in 2008 to £7,7 million in 2009. Advice-based sales through Nedbank Financial Planning increased 36% to R6,9 billion, mainly into the low-risk and money market funds. BoE Private Clients was rated No 1 in Service and Advice in an independent survey by SMRC Marketing Solutions (Pty) Limited and Fairbairn Private Bank voted Best International Wealth Manager 2009.

Prospects for 2010

Bancassurance and Wealth is a key focus area in the strategy of driving the growth in NIR and EP for the group. In 2010 we will focus on

• Opportunities to increase penetration of the existing Nedbank client base.
  
• Expanding our short-term and life product range.
  
• Aligning of our high-net-worth business and proposition.
  
• Incorporating Imperial Professional Finance.
  
• Penetrating the Imperial Motor Finance Corporation base with short-term and credit life insurance.
  
• Building a single asset management division.
  

Our business

Bancassurance and Wealth comprises four divisions:

Bancassurance

• Nedgroup Life Assurance Company – provides credit life protection for death, disability and retrenchment as well as simple savings and investment products.
  
• Nedbank Group Insurance Brokers – facilitates and brokers a variety of short-term insurance products into the Nedbank client base.
  
• Nedgroup Insurance Company – provides short-term insurance, including homeowner’s insurance and personal accident cover.
  

Asset Management

• Nedgroup Investments – supplies a range of SA and offshore best-of-breed unit trusts and investment solutions.
  
• BoE Private Clients and Fairbairn Private Bank – provides both active asset management and investment solutions to the high-net-worth market.
  

Wealth Management (Africa)

• BoE Private Clients – offers a fully integrated spectrum of services, including investment management, financial and retirement planning, private lending facilities, call, notice and fixed-term deposits, tax and estate planning, and transactional banking.
  
• Fiduciary and trust services – provides high-net-worth trust and fiduciary services.
  
• Nedbank Financial Planning – provides professional advice on financial and assurance products.
  

Wealth Management (Europe and Middle East)

• Fairbairn Private Bank – offers private banking, investment and corporate services, with offices in the United Kingdom and Middle East, on the Isle of Man and Jersey, and in South Africa.
  
• International Fiduciary and Trust Services – provides trust management services for the Old Mutual Group, the high-net-worth segment and the independent financial adviser market.
  

Management team

Nic Andrew (38) Managing Executive: Asset Management 12 years’ service • CA (SA), PGDip(Tax Law), CFA, AMP (Insead Business School)	Lance Blumeris (38) Chief Operating Officer: Life Assurance 13 years’ service • CA (SA), IEP (Insead Business School)
Vince Boulle (45) Managing Executive: Wealth Management (Africa) 5 years’ service • CA (SA)	Andrew Culbert (47) Managing Executive: Bancassurance 22 years’ service • AMP (Insead Business School), FCIS
Franklin Dikgale (36) Executive Head: Fiduciary and Trusts (Africa) 3 years’ service • BProc	Paul Finlayson (41) Executive Head: BoE Private Clients 11 years’ service • CA (SA), AMP (Insead Business School)
Greg Horton (53) Managing Executive: Wealth Management (Europe and Middle East) 7 years’ service • ACIB, FSI	Patiswa Jumba (37) Executive Head: Human Resources 1 year’s service • LLB
Susan le Roux (53) Executive Head: Financial Planning 6 years’ service • MBA	Andrew Lodge (52) Executive Head: Fiduciary and Trusts 14 years’ service • MBA, MSI (Europe and Middle East)
Walter Marte (33) Chief Financial Officer 5 years’ service • CA (SA)	Dion Nair (34) Chief Operating Officer 4 years’ service • MBA
Iolanda Ruggiero (38) Chief Operating Officer 7 years’ service • Hons (B&A), AMP (Insead Business School)	Anees Vazeer (40) Chief Operating Officer: Short-term Insurance 3 years’ service • CA (SA)