Nedbank Group · JSE:NED

Nedbank — UBS 7th SA Financial Services Conference October 2004

30 slides from Nedbank's conference presentation, October 2004

1. Slide 1: UBS Conference October 2004

   UBS Conference October 2004 Tom Boardman Chief executive

2. Slide 2: Introduction

   Introduction 2  Reduced risk  Firming up on the strategy  Key focus on improving staff morale  Nedcor reorganisation – to improve client focus & accountability  Strategic Recovery Programme on track & 3 year plan in place  Trading update on 11 November 2004 … we are listening in order to impro

3. Slide 3: Reducing the risks

   Reducing the risks 3 • Complete balance sheet clean-up  • New executive team in place & working together  • Recapitalise the group – R5bn rights issue  • Reduce forex exposure & interest rate risks  – Repatriated & hedged R4bn of forex – Hedging new fixed rate liabilities – Hedging of R6bn subor

4. Slide 4: A more external focus

   A more external focus 4  Restored the bank - Strongly capitalised - Earnings volatility substantially reduced - Progress made to restore ROE  Build for the future – strategic focus - Scenario planning - Vision articulated - Key strategic focus areas identified

5. Slide 5: Strategy, value & brand workshops

   Strategy, value & brand workshops 5  Staff survey  Talk-to-Tom e-mail facility  Commitment to engage with staff  Alignment of Strategy, Values & Brand  Cross section of staff from across the bank participated  Participants extremely positive  Greater buy-in to our strategy, values & brand  I

6. Slide 6: Strategy

   Strategy 6 Vision “To become Southern Africa’s most highly rated & respected bank… …by our staff, clients, shareholders, regulators & communities.” What will dictate our business We need to be great at listening, model? understanding clients’ needs & delivering Making sure it happens Nedbank Strateg

7. Slide 7: Single brand endorsed strategy

   Single brand endorsed strategy 7 The Nedbank brand has to S–T–R–E–T–C–H Nedcor Group Nedbank Group Multibrand strategy Single brand endorsed strategy  Niche  Mass aspirational  Unashamedly not for everyone  Proudly for everyone Brands phased & being phased out:  Nedcor Bank  Nedcor Investment

8. Slide 8: Drive transactional banking

   Drive transactional banking 8 Retail Corporate Number of Retail customers Nedbank Corporate Market Share 40% 37% % primary customers 35% 30% 30% 25% 25% 22% 20% 20% 15% 15% 12% 10% 5% 0% Corporate Foreign Trade Transactional Commercial Lending Securities Busines Business Accounts & Industrial Deposi

9. Slide 9: Building a high performance culture

   Building a high performance culture 9  Less focus on hierarchy - Prior March 2003: 17 grades - March 2003: 7 broadbands - Feb 2005: 5 levels  Change in remuneration policy towards pay for performance  Career management  Communication & training has begun

10. Slide 10: Financial Sector Charter - Staff

    Financial Sector Charter - Staff 10  FSC targets = minimum achievement Objectives  Change organisational culture to embrace diversity  Develop, retain & attract key skills & talent – focus on black generic & women  A balanced scorecard approach to people development Commitments  30% Of Group Ex

11. Slide 11: Financial Sector Charter Cont.

    Financial Sector Charter Cont. 11  CSI progressing well: - Included in JSE Socially Responsible Investment (SRI) Index - Inclusion in Dow Jones World Sustainability Index (only 4 SA co’s.) - Trialogue Ratings: #2 corporate grantmaker, #1 in financial services - Mail & Guardian awards – finalist for

12. Slide 12: New Nedbank Group Structure

    New Nedbank Group Structure 12 Nedbank Group Tom Boardman Nedbank Nedbank Nedbank Group Tech. Group Group HR Retail Corporate Capital & Support Strategy Serv. & Corp. Affs. Graham Brian Len de Nolitha Rob Shuter Dempster Kennedy Villiers Fakude Ivan Mzimela Compliance Risk CEO’s Group Strategic Offi

13. Slide 13: Improving the structure

    Improving the structure 14  Building a client-focused organisation  Clear accountability  Faster decision making & turnaround times Nov 2003: 3 clearly defined front end units + support centres Aug 2004: Integration of branch operations into Retail Oct 2004: Reorganisation: back to basics

14. Slide 14: Integrating branch operations

    Integrating branch operations 15 13 Jul: Decision to integrate Retail & Branch Operations: 5 000 staff moved into Retail 28 Jul: Integration project team & project principals established 3 Aug: Consultation with Unions 6 Aug: Placement of Divisional Directors 11 – 13 Aug: Assessment & placement proc

15. Slide 15: Back to basics reorganisation

    Back to basics reorganisation 16  Allocation of certain operations from the centre into business units - Consolidation of Card, Homeloans & Microlending in Retail - Creation of an integrated operations unit in Nedbank Corporate  Creation of a centralised technology unit  Increased responsibility

16. Slide 16: Strategic Recovery & Turnaround Office

    Strategic Recovery & Turnaround Office 17 Purpose Monitor, provide assurance & assist to achieve the group’s strategic aspirations Who Highly focused small team of 20-30 specialists Mandate  Review cluster aspirations, targets & milestones  Raise issues & facilitate resolution  Evaluate clusters

17. Slide 17: Optimise Mix

    Optimise Mix 18  Underweight Retail – Retail assets & contribution to NIR too low - Customers per branch low versus competitors - Inadequate primary banker status  Require system refinement – particularly in Nedbank Corporate  Sub-optimal Interest Earning Asset mix

18. Slide 18: Nedbank Retail problem areas

    Nedbank Retail problem areas 19  Financial underperformance  Losing market share in homeloans & card  Nedbank brand ranks poorly in certain key aspects  Complex structure  Complex operational model  Poor primary banker status

19. Slide 19: High-net-worth

    High-net-worth Private Personal Segments Mass Market Underserved Structure - standard 3D matrix 20

20. Slide 20: High-net-worth segments, products and channels

    Pr High-net-worth o Pr du High-net-worth o du Ho cts m C ct s ar el d Private AB oa n F s Private a r Lo Lo Personal an s/ Personal o C ans S ve a Segments rd af t ra er g Segments ft dr s Mass Market u Mass Market I Amex Sa nt v in gs Underserved t Underserved C C nve Ass Ins Branch ur Branch re d

21. Slide 21: Scattered and fragmented card business

    Scattered and fragmented card 22 business Current structure of the card business Nedbank divisions Group Business Central Operations Risk Front-line businesses Innovation Product Process CPO NCCC Risk Retail Amex JV Visa, Card issuing Amex Mastercard Visa, Card acquiring Amex Mastercard Visa, compet

22. Slide 22: Card after reorganisation

    Card after reorganisation 23 New structure of the card business Retail Cluster – Nedbank Card (Sydney Gericke) Card issuing Card acquiring • Visa / Mastercard Card processes • Amex Card operations • Card Operations competency centres • Card Fraud Card Functions & Card helpdesk • Card Authorisations

23. Slide 23: Retail strategy - resolve complexity

    Retail strategy - resolve complexity 24  3 focussed integrated businesses under the Nedbank brand - Card - Home loans - Micro-lending  Flexible channel strategy  Integrated high-net-worth offering  Product & Process functions aligned to client-driven strategy in each business cluster Resolve com

24. Slide 24: Nedbank Retail reorganised

    Nedbank Retail reorganised 25 Personal Assistant Nedbank Retail Natalie Bolleurs Rob Shuter Executive Assistant Ryan Steele Retail Client Nedbank Retail Banc- Retail Product Retail Shared Service Home Loans assurance & Solutions Services Wealth Acting position reserved for EE candidate Clive van Hor

25. Slide 25: Nedbank Corporate

    Nedbank Corporate 27  Systems refinements & enhancements – already achieved some quick wins  Transactional banking – increase primary banker status  Focus on improving cross-sell  Realignment of product & operations to improve client focus  Focus on ROE – removing low yielding assets

26. Slide 26: Nedbank Capital

    Nedbank Capital 28  Reviewed & put in place new incentive schemes in Q1 2004  Migration of staff to the same premises completed in Q1 2004  Increased focus on sector specialists – deal origination  Deal pipeline looks promising – uplift in activity over past three months  Recent mandates includ

27. Slide 27: Merger Update

    Merger Update 29  BoE Business Banking: 115 000 clients migrated by June 2004  Property & Asset Finance: successfully integrated 4 operating systems to a single platform with 12,600 contracts and R16bn in value migrated by July 2004  NBS: 696 000 clients to be migrated - 608 000 clients already m

28. Slide 28: Nedcor Position & Outlook

    Nedcor Position & Outlook 30  Risks addressed – platform set  Strategy simplified, communicated & being implemented  Divisional strategies evolving in line with group strategy  Focus on staff morale  Business aligned - improve client focus & accountability  Focus on growing Retail to improve m

29. Slide 29: “There is no miracle moment. Small incremental wins in one common direction will restore

    “There is no miracle moment. Small incremental wins in one common direction will restore Nedcor to a highly rated & respected financial institution.”

30. Slide 30: Thank you

    Nepcor $f Thank you

Nedbank Group — UBS 7th SA Financial Services Conference October 2004 on 6ix