Nedbank Group · JSE:NED
Nedbank — ESG Presentation (May 2024)
51 slides from Nedbank's sustainability presentation, May 2024
Slide 1: 11th Annual Nedbank Group board ESG roadshow
11th Annual Nedbank Group board ESG roadshow May 2024 NEDBANK GROUP LIMITED – 11th Annual Board ESG roadshow 1
Slide 2: Nedbank Group's 11th ESG roadshow – board members
Nedbank Group’s 11th ESG roadshow – board members Daniel Mminele Hubert Brody Independent Director Lead Independent Director Chairperson: Board Chair: Remco & DAC Other committees: DAC & GSCRC Other committees: GAC, GITCO 1 year on the board 6 years on the board DAC: Group Directors’ Affairs Committ
Slide 3: Agenda
Agenda ▪ Top of mind items & ESG at Nedbank Objectives ▪ Governance ▪ Maintain strong relationships ‒ Board & Group Exco succession between the Nedbank ‒ Ethics & reputational matters Group board & the investment ‒ IT & cyber oversight community ‒ Capital management ‒ Remuneration ▪ Communicate Nedb
Slide 4: Top of mind items
Top of mind items ▪ Chief Executive succession – planning on track for a seamless handover from Mike Brown to Jason Quinn. Jason’s appointment has been well-received by the market. ▪ Board matters – independent board evaluation found that the board & its committees effectively discharge their duties
Slide 5: ESG is embedded in the Nedbank purpose & strategy
ESG is embedded in the Nedbank purpose & strategy Our purpose To use our financial expertise to do good for individuals, families, businesses & society Strategic value drivers Risk & Growth Productivity Capital Management Strategic value unlocks Digital Market-leading Focusing on areas Efficient Cre
Slide 6: Creating positive impacts – our market-leading ESG ratings, credentials & milestones
Creating positive impacts – our market-leading ESG ratings, credentials & milestones Nedbank ESG ratings Commitments & achievements Top 5% 2030 financed Net-zero Zero exposure AAA of global emission targets operational water to fossil-fuel- banks for thermal-coal, oil use (since 2018) related activi
Slide 7: We align to world-class ESG standards & frameworks
We align to world-class ESG standards & frameworks Report in accordance with Reporting is aligned with Signatory to the PCAF the International Finance the Global Reporting Equator Principles Aligned to King IV methodology used to Corporation (IFC) Initiative Standards Financial Institution CRISA pri
Slide 8: Our suite of integrated reporting covers all aspects of ESG
Our suite of integrated reporting covers all aspects of ESG ESG data table with over 200 ESG KPIs over > 5 years & links to our ESG-related policies Control-click on a report to download it from our group website NEDBANK GROUP LIMITED – 11th Annual Board ESG roadshow 8 * Available on our website: ne
Slide 9: Our 2023 ESG-related recognition & awards
Our 2023 ESG-related recognition & awards 2023 African 2023 Global 2023 Bonds, Loans 2023 Top Banker Awards Banking & Finance & ESG Capital Empowerment Awards Markets Africa Awards Awards Sustainable Bank Best Corporate ESG Loan Deal of Top Empowered of the Year Sustainability the Year Company: Lege
Slide 10: Governance
Governance NEDBANK GROUP LIMITED – 11th Annual Board ESG roadshow 10
Slide 11: The Nedbank Group board – diverse & independent
The Nedbank Group board – diverse & independent E RE Election at 57th AGM Re-election at 57th AGM Independent non- Independent non-executive Non-executive Executive executive director directors director directors and Chairperson RE E RE RE Daniel Hubert Neo Errol Phumzile Rob Linda Terence Stanley B
Slide 12: Board changes & succession planning
Board changes & succession planning Board succession planning Board changes since 57th AGM ▪ Skills added over past 3 years1 include amongst others: risk ‒ Mteto Nyati stepped down management, banking & financial services, accounting & auditing, ‒ Terence Nombembe appointed mining, resources & infra
Slide 13: Board skills & training
Board skills & training Director updates & training in 2023 – a diverse set of topics, including: ▪ Geopolitical challenges ▪ SA’s Just Energy Transition Plan; energy transition & new technologies; the global state of responsible investing; ISSB sustainability disclosures & assurance ▪ Labour market
Slide 14: Board & committee evaluations – effective discharge of their duties
Board & committee evaluations – effective discharge of their duties & overall feedback positive Board performance (score out of 5) (5) Exemplary (4) Exceeds expectations (3) Meets expectations 4,4 4,2 4,1 3,9 4,4 4,2 4,1 Strategic focus, Core Board Board Company Company Board priorities and governan
Slide 15: ESG oversight at Nedbank Group Board & its committees
ESG oversight at Nedbank Group Board & its committees Nedbank Group Board Overall ESG responsibility Group Information Group Director’s Affairs Group Audit Group Remuneration Technology (DAC) (GAC) (Remco) (GITCO) Governance & other Oversight of reputational & Oversight of financial Oversight of rem
Slide 16: Nedbank Group Exco members & changes
Nedbank Group Exco members & changes 12x internal appointments to Group Exco Exco changes in 2023/2024 ▪ Trevor Adams (CRO) retired 31 March 2023 – Dave-Crewe Brown (CRO) appointed ▪ Fred Swanepoel (CIO) retired 30 June 2023 – Ray Naicker (CIO) appointed ▪ Mike Brown (CE) retires 31 May 2024 – Jason
Slide 17: Chief Executive succession – a seamless, well-managed process
Chief Executive succession – a seamless, well-managed process Announced 2023 AGM 2024 AGM Announced appointment of appointment of Daniel Mminele Daniel Mminele Jason Quinn as Chairperson- Jason Quinn joins the became Chairperson as CE-designate designate board as CE Mike Brown retires Daniel Mminele
Slide 18: Ethics & reputational matters – Nedbank has zero tolerance for corruption
Ethics & reputational matters – Nedbank has zero tolerance for corruption Suspicious transactions State Capture related investigations Client off-boarding reported to FIC (000)1 ▪ No findings were made against Nedbank. Some ▪ Decisions to terminate banking transactions involving Nedbank where relati
Slide 19: Technology oversight – GITCO oversight of the Managed Evolution IT build
Technology oversight – GITCO oversight of the Managed Evolution IT build & digital developments GITCO oversight in 2023 Core Product Core product systems ▪ Operational resilience – monitored the availability & stability of banking lifecycle systems (2023: 99,6% uptime). Monitored the management of I
Slide 20: Benefits from our world-class technology platform & enhanced digital innovation
Benefits from our world-class technology platform & enhanced digital innovation Benefits for our clients Benefits for Nedbank Digital Digital servicing Revenue growth Beyond Banking onboarding Retail VAS > 200 > 400 cross-sell revenue Avo clients APIs Seamless FICA-compliant onboarding of individual
Slide 21: Active capital management – strong capital position supports growth & dividends
Active capital management – the group’s strong capital position supports growth, capital optimisation & future dividend payments Capital R12bn Completed the R5bn capital optimisation initiative, average with the following outcomes (full-year basis): CET1 ratio (%) surplus capital & CET1 well- ▪ CET1
Slide 22: Remuneration – overview
Remuneration – overview Business performance highlights Remuneration highlights 2024 guaranteed Short-term 2024 LTI DHEPS Dividend/share package increases incentives awards ▲14% ▲15% Group exco & non- STI pool LTI awards all (HE +11%) bargaining unit ▲4,6% 100% performance employees to R3,0bn orient
Slide 23: Remuneration – addressing shareholder concerns reflected in 2023 AGM vote support
Remuneration – addressing shareholder concerns reflected in 2023 AGM remuneration policy vote support of 90% Key issue Remco response Voting history on remuneration ▪ No material remuneration concerns were raised Shareholder votes in favour of proposed during the group’s 2023 ESG shareholder roadsho
Slide 24: Remuneration – guaranteed package & fair pay
Remuneration – guaranteed package & fair pay Guaranteed Package (GP) increases from 2013 GP increases: minimum GP vs BU vs non-BU to 2024 (indexed) 222 (%) 208 Minimum GP Bargaining unit Non-BU 168 177 2024 +7,1% +7,0% +5,3% 168 159 2023 +10,0% +7,0% +5,6% 2022 +5,6% +5,2% +4,0% 13 14 15 16 17 18 19
Slide 25: Remuneration – short-term incentive outcomes
Remuneration – short-term incentive outcomes STI increases versus DHEPS & EP (%) 120 90 60 30 0 -30 -60 -90 -120 2015 2016 2017 2018 2019 2020 2021 2022 2023 EP growth DHEPS growth STI growth ▪ STI pool of R3,0bn (2022: R2,9bn) was up +4,6%, representing 12,4% of HE* (2022: 13%) ▪ STI pool driven by
Slide 26: Remuneration – long-term incentive scheme vesting
Remuneration – long-term incentive scheme vesting Remco applied a downward discretionary adjustment to the 2024 vesting outcomes of the 2021 awards through a 10% upward adjustment to the DHEPS target metrics**** *** * 100% of awards vesting to ‘Executive directors’ from 2017 to 2023 & 2025 onward ar
Slide 27: Remuneration – 2024 LTI scheme linked to corporate performance targets
Remuneration – 2024 LTI scheme linked to corporate performance targets * * NEDBANK GROUP LIMITED – 11th Annual Board ESG roadshow 27
Slide 28: Remuneration – 2024 LTI scheme: retained financial CPTs
Remuneration – 2024 LTI scheme: retained financial CPTs & aligned to the group’s 2025 (medium-term) & long-term targets NEDBANK GROUP LIMITED – 11th Annual Board ESG roadshow 28
Slide 29: Remuneration – LTI CPTs linked to the group's targets
Remuneration – LTI CPTs linked to the group’s targets Diluted headline ROE Cost-to-income Net Promoter earnings per share ratio Score Short By end 2023 term > 2 565 cents 15% < 54% #1 bank (2019 levels) (2019 levels) (from #3 in 2019) 3 199cents 15,1% 53,9% #1 bank Medium By end 2025 term > CPI + GD
Slide 30: Remuneration – 2024 LTI scheme: E&S and strategic CPTs
Remuneration – 2024 LTI scheme: E&S and strategic CPTs NEDBANK GROUP LIMITED – 11th Annual Board ESG roadshow 30
Slide 31: Remuneration – terms of outgoing & incoming Chief Executives
Remuneration – terms of outgoing & incoming Chief Executives Mike Brown (outgoing CE) will step down from his CE role at the 2024 AGM, effective 31 May 2024. Mike will remain employed with Nedbank in an advisory role until 31 August 2024 when he retires. This will allow for an orderly transition per
Slide 32: Remuneration – executive remuneration
Remuneration – executive remuneration Mike Brown Mfundo Nkuhlu Mike Davis Chief Executive Chief Operating Officer Chief Financial Officer GP LTI face value GP LTI face value GP1 LTI face value (R 000) (R 000) (R 000) (R 000) (R 000) (R 000) +4% +5% +1% +2% +5% +2% +2% +4% >+100% +8% +7% 26 000 16 50
Slide 33: Remuneration – single figure remuneration driven by 67% share price appreciation
Remuneration – single figure remuneration driven by 67% share price appreciation from start 2021 to end 2023 (top performing bank share) NEDBANK GROUP LIMITED – 11th Annual Board ESG roadshow 33
Slide 34: Remuneration – proposed non-executive director fees
Remuneration – proposed non-executive director fees ▪ Increases to the Chairperson’s fee, board fees and committee fees (excluding VAT) are proposed to be 5% aligned with the proposal for NBU employees, excluding the Remco, TSEC and IT committee, where higher increases of 10% are proposed to align w
Slide 35: Climate
Climate NEDBANK GROUP LIMITED – 11th Annual Board ESG roadshow 35
Slide 36: Climate – governance & 2023 highlights
Climate – governance & 2023 highlights Governance Leading disclosures Supporting our clients Good progress on targets ▪ GSCRC, previously ▪ Disclosed power generation ▪ Engaged with over 120 ▪ Sustainable Development Finance GCRC, has broadened & fossil-fuel glidepaths to clients in climate-sensitiv
Slide 37: SDG-related finance – R145bn of exposures supporting sustainable development financing
SDG-related finance – R145bn of exposures at the end of December 2023 that support sustainable development financing (SDF) Sustainable development finance1,2 (Rbn) R15bn sustainable finance across multiple SDGs for CIB clients (R27bn limits) >R150bn 20% R28bn support for farmers & the agriculture se
Slide 38: Renewable energy finance – entrenching our leadership position
Renewable energy finance – entrenching our leadership position Renewable energy financing Renewable energy financing opportunities ( drawn exposures, limits, Rbn) to date >R2bn RBB renewable finance Limits: +22% yoy ▪ Strong growth in Commercial Banking & Retail. MFC solar 36 37 46 finance in place
Slide 39: Nedbank's climate change journey – our commitment to net zero
Nedbank’s climate change journey – our commitment to net zero Our journey to net zero Climate change resolutions passed with Thermal-coal glidepaths Power generation Oil & gas glidepaths 2020 100% votes of approval at our 53rd AGM (ktCO2e financed) (ktCO2e financed) Adopted & disclosed our market-le
Slide 40: Nedbank's climate change journey – 2023 performance against targets
Nedbank’s climate change journey – 2023 performance against targets 2023 performance against target 2025 Sustainable development finance (SDF) exposures to around 20% of the On track: Exposures of R145bn supporting SDF (16% of the group’s group’s total gross loans & advances (GLAA) by the end of 202
Slide 41: Society
Society NEDBANK GROUP LIMITED – 11th Annual Board ESG roadshow 41
Slide 42: Transformation – retained our BBBEE level 1 & 124,4 points for 2023
Transformation – retained our BBBEE level 1 (six years-in-a-row) & 124,4 points for 2023 the highest in the peer group Nedbank’s BBBEE level & points Nedbank 2023 scorecard Target Achieved 1 1 1 Ownership 23 26,1 1 1 1 2 124,4 Management control 20 15,0 122,4 121,5 119,4 2 117,6 117,6 Level 2 2 2 Sk
Slide 43: Diversity, equity & inclusion – ongoing improvement in black representation metrics
Diversity, equity & inclusion – ongoing improvement in black representation metrics Gender diversity (%) Male Female Nedbank is deeply committed to diversity, 2019 equity & inclusion & the 61,8 continued transformation of corporate SA, which is a 2023 strategic priority for the 61,7 Board. Racial di
Slide 44: Human Capital – higher levels of employee satisfaction
Human Capital – higher levels of employee satisfaction notwithstanding ongoing business optimisation Employee morale Optimising our business for a more digital world Training spend – Great place to work NPS Permanent headcount (#) Employee attrition (%) Employee training spend Employee NPS (%) (Rm)
Slide 45: Financial inclusion – strategy spans distribution, products & services
Financial inclusion – strategy spans distribution, products & services to entry- level clients & SMEs, community interventions & financial education Financial inclusivity Financial inclusivity Community-based Financial Inclusive distribution individuals businesses interventions wellness & education
Slide 46: 57th AGM resolutions
57th AGM resolutions 31 May 2024 NEDBANK GROUP LIMITED – 11th Annual Board ESG roadshow 46
Slide 47: Resolutions to be voted on at May 2024 AGM
Resolutions to be voted on at 31 May 2024 AGM Ordinary resolutions 1.1 & 1.2 Election of directors of the company appointed during the year: Mr J Quinn & Dr TM Nombembe Ordinary resolutions 2.1 to 2.3 ▪ Re-election of Mr DA Dames ▪ Re-election of Mrs NP Dongwana ▪ Re-election of Mr MC Nkuhlu Ordinar
Slide 48: Resolutions to be voted on at May 2024 AGM
Resolutions to be voted on at 31 May 2024 AGM Ordinary resolution 5 ▪ Placing the authorised but unissued ordinary shares under the control of directors. o ‘The below authority to place authorised but unissued shares under the control of the directors will be used only for the purposes of the Nedban
Slide 49: Resolutions to be voted on at May 2024 AGM
Resolutions to be voted on at 31 May 2024 AGM Special resolutions 1.1 to 1.12 ▪ Remuneration of the Non-executive directors Special resolutions 2.1 to 2.3 ▪ Remuneration of non-executive directors appointed as Acting Group Chairperson, Acting Lead Independent Director or Acting Committee Chairperson
Slide 50: Thank you
Thank you NEDBANK GROUP LIMITED – 11th Annual Board ESG roadshow 50
Slide 51: Contact us
Contact us Nedbank Group CFO Nedbank Investor Relations nedbankgroup.co.za Mike Davis Head: Investor Relations Nedbank Group Limited Email: MichaelDav@nedbank.co.za Alfred Visagie Physical address Email: AlfredV@nedbank.co.za 135 Rivonia Road Group Company Secretary Sandown Jackie Katzin Larisa Baye