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BEYOND COMPLIANCE
TRANSFORMING FINANCIAL
SERVICES
Nedbank Group remains committed to delivering social
sustainability and economic upliftment that transcends
mere compliance. As such, the group has retained the
process of setting and delivering on Financial Sector
Charter (FSC)-based internal targets as it believes that
these will help ensure that it continues to entrench and
expand the transformation of the business services and
its client base.
ACCESS TO FINANCIAL SERVICES
A significant part of this transformation commitment,
and fundamental to Nedbank Group's achievement of
its objective to be a bank for all, the group continues to
invest in making banking services and accounts more
accessible to all members of SA's population.
At the end of 2011 the Nedbank Group boasted a total
of 1 080 national Nedbank-branded and staffed points
of presence across SA. It continues to take an aggressive
approach to growing its footprint in the non-traditional
branch space, with several new innovations such as
'Branch in the Box', mobile branches, inretailer outlets,
Personal Loan Branches and Personal Loans Kiosks.
These innovations bring a much more cost-efficient
option for ensuring accessibility for the group's clients
and are fast proving their popularity in new markets.
The self-service channel strategy has also been subject
to an aggressive expansion plan over the past three
years, resulting in a base of 2 272 self-owned Nedbank
automated teller machines (ATMs), 549 outsourced
ATMs and self-service devices (SSDs), 385 self-service
terminals (SSTs) and 6 391 cashback point-of-sale
(POS) devices as at the end of 2011.
- The Nedbank@Work business unit, which
falls within Nedbank Retail, was specifically
reengineered in 2011 with the purpose of
delivering employee banking offerings to the
group's most valued corporate and business
banking clients.
- Mzansi – Nedbank Retail has consistently used
mobile sales teams (MSTs) to go into rural
settlements and help educate residents on
their finances and assist them to open Mzansi
accounts or Nedbank Group's attractively priced
offerings with Ke Yona and Vodacom m-pesa.
The table below shows the number of open and
active Mzansi accounts through Nedbank since
1 January 2009:
- Extended banking hours – A pilot initiative started in November 2010 proved that there was merit in extending Nedbank branch business hours during the week and on Sundays. This was implemented in 2011 to positive feedback from clients. 59 Nedbank branches across the country have extended their trading hours and now trade during the week until 18:00 and from 10:00 to 14:00 on Sundays.
Nedbank Group views targeted investment as an opportunity to extend the effectiveness of its social sustainability efforts through debt financing of, credit extension to, or equity investment in SA projects that will help to close any gaps or backlogs that still exist in the country's economic development and facilitate job creation for future growth. The group's targeted investment activities comprise:
- Black agriculture finance
- Affordable housing
- Black small and medium enterprise (SME) financing and support
- Transformational infrastructure finance
BLACK AGRICULTURE FINANCE
Nedbank Group's agriculture focus targets the three
subsectors of agriculture, namely horticulture, livestock
and field crops – all incorporating the entire value
chain (primary and secondary agriculture). Clients have
access to a focused range of products and to specialist
agriculture economists in regional offices throughout
the country. Solutions range from access to finance
to capacity building and mentorship. In 2011 many
emerging black farmers and cooperatives benefited from this approach, which combines finance with
business skills training and specialist advisory services.
Since 2009 Nedbank Group has provided finance in this
area totalling R164m.
AFFORDABLE HOUSING – MORTGAGES
The value of loans originated from January 2011 to
December 2011 declined by 31% when compared with
the same period in 2010.
Poor credit history and affordability continue to be the
biggest hurdles for client approvals.
The cost of an entry-level house is in the region of
R300 000, which requires a monthly income of around
R10 300 to qualify for a 20-year mortgage. In this case
the monthly home loan instalment would be R3 100
a month.
There are signs that the supply of new housing may be
improving. This is demonstrated by the 13,9% increase
in houses built that are less than 80 m2, a good proxy
for affordable-housing activity, when compared with
the same period in 2010. Since 2009 Nedbank Group
has provided finance in this area totalling R2 037m.
AFFORDABLE HOUSING –
DEVELOPMENT FINANCE
Nedbank Group acknowledges the growing need for
focused, specialised funding of new affordable-housing
developments to increase access to housing for the
broad segment of South Africans who are in the lower
income brackets. To this end the group's Affordablehousing
Unit in the Nedbank Property Finance Division
leveraged the momentum achieved in this business
during 2009 and 2010 to provide further claimable
funding of more than R297m for new affordablehousing
developments in the major metropolises
across SA.
In acknowledgement of the fact that individuals
who earn less than R12 000 a month are unable to
afford entry-level affordable housing, the group has
implemented a responsive funding approach that
enables its clients who develop affordable housing to
produce rental stock that caters for those in this lowerincome
bracket.
BLACK SMALL AND MEDIUM ENTERPRISE
FINANCING
SME
plays a critical role in job creation, income
generation and the economic growth of the country.
However, there are still many challenges that restrict
the growth and development of SMEs and Nedbank
Group is proactively helping this important sector
address and overcome these challenges.
Nedbank Business Banking, through its presence in more
than 65 locations extends support to SMEs across the
country, giving them access to dedicated, skilled bankers
supported by a team of finance and business specialists.
Solutions are customised from a suite of products and
service to meet the individual business needs.
This is augmented through a comprehensive enterprise
development proposition that offers entrepreneurs
easier access to finance, underpinned by training,
mentorship, specialist advisory services and capacity
building. Since 2009 Nedbank Group has provided
finance in this area totalling R3 916m.
TRANSFORMATIONAL
INFRASTRUCTURE
Transformational infrastructure deals with financing
basic infrastructure in previously disadvantaged areas,
assisting those areas to become more productive and
part of the mainstream economy. Since 2009 Nedbank
Group has provided finance in this area totalling
R2 781m.
Some of the major transformational infrastructure
projects funded by Nedbank Group in 2011 included:
- Gauteng Online – This network solution provides
internet service protocol (ISP) to 2 200 schools
in Gauteng. This five-year contract includes the
implementation of school computer laboratories,
IT infrastructure and mobile education facilities.
The aim is to empower learners and educators in terms of the Gauteng Department of Education's guidelines on e-learning. - City of Johannesburg Metropolitan Municipality – All long-term funding for the city is generally for infrastructure purposes. Loans were mainly required for water and sanitation infrastructure, electricity and transport infrastructure.
- eThekwini (KwaZulu-Natal) – This R500m loan was used for the acquisition of motor vehicles, and plant and equipment as part of the local government's ongoing integrated development plan aimed at infrastructure service delivery.
- Bakwena Toll Road Project (Mpumalanga) – Nedbank Capital was the lead arranger for the refinancing of the Bakwena N1/N4 Toll Road Project to the value of R3,7bn, resulting in the largest refinancing of an infrastructure project yet completed in SA.
BLACK ECONOMIC EMPOWERMENT
TRANSACTION FINANCING
BEE
transaction financing is defined as the supply of
equity and transaction financing for BEE companies
other than exempted microenterprises (EMEs)
and qualifying small entities (QSEs). Nedbank
Group remains strongly positioned in this area of
transformation financing, the purpose of which is to
enable black-empowered and black-owned entities
to achieve their growth goals and prosper in the
long term. These types of equity deals also facilitate
ownership by more people, thereby promoting the
sharing of wealth and sustainable development of the
economy. Since 2009 Nedbank Group has provided
finance in this area totalling R7 349m.
| Breakdown of 2011 Nedbank Group empowerment financing Category (Rm) |
2011 | 2010 | 2009 |
| Targeted investments | 10 590 | 5 681 | 2 319 |
| Transformational infrastructure | 2 781 | 1 906 | 559 |
| Affordable housing | 3 253 | 2 033 | 982 |
| Black agriculture loans | 164 | 70 | 20 |
| Black SME financing | 3 916 | 1 672 | 759 |
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|
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| BEE transaction financing | 7 349 | 6 570 | 1 362 |
¹ 2011 measurements complies to recommended standards developed as part of the Financial Sector Code.
ENTERPRISE DEVELOPMENT
Enterprise development is a cornerstone of social
sustainability for SA as it is key to ongoing creation of
much-needed employment opportunities. For Nedbank
Group the importance of enterprise development
extends even further since, in many ways, it is an
essential requirement for the continued expansion
and sustainability of the group's business and retail
client base.
Given the many barriers to entry for businesses in
this country, Nedbank Group takes a multifaceted,
highly proactive approach to enterprise development,
including a mix of funding, transactional and support
products, and services that provide fl exibility and
adaptability across all industries.
Some of the enterprise development initiatives
undertaken or supported by Nedbank Group in 2011
included:
- Laundry Cooperative (KwaZulu-Natal) – This cooperative is situated in rural KwaZulu-Natal and comprises 30 members who provide laundry services to various campsites and lodges in and around the Giant's Castle area. Nedbank Business Banking provided grant assistance to the cooperative in 2010 and additional loan assistance in 2011 for procurement of equipment.
- Poultry Cooperative (KwaZulu-Natal) – Nedbank Business Banking provided financial assistance and business advice to this small cooperative located in the Nula district, near Port Shepstone. The funds will enable the cooperative to increase production from 600 birds per six-week cycle to 4 000 birds per six-week cycle.
- Non-profit organisations – Nedbank Group views non-profit organisations (NPOs) that facilitate employment opportunities for rural communities as a key roleplayer in job creation. The group provided assistance to an NPO in KwaZulu-Natal that focuses on facilitating market access for small businesses in the region through partnerships with rural and other marginalised communities. Altogether 520 beneficiaries were positively impacted through this intervention, with 316 jobs supported or created.
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