Nedbank Group · JSE:NED
Nedbank — Investor Day (May 2023)
49 slides from Nedbank's investor day presentation, May 2023
Slide 1: Investor Showcase – The Township Economy
Nedbank Group Investor Showcase – The Township Economy May 2023 NEDBANK | RETAIL BANKING INVESTOR SHOWCASE
Slide 2: Strategic overview
Nedbank Group Strategic overview NEDBANK | RETAIL BANKING INVESTOR SHOWCASE
Slide 3: Nedbank Group purpose & strategy
Nedbank Group 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 Delivering Ongoing disruptive Driving efficient Focusing on areas marke
Slide 4: 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 Client onboarding Digital services Speed of innovation Systems uptime Eclipse1 NBH2 IT changes into Retail Juristic production per annum 99% >75% 99,3% (1Individual & juristi
Slide 5: Medium- & long-term targets that support shareholder value creation
Medium- & long-term targets that support shareholder value creation Short Targets to 2023 term DHEPS ROE Cost-to-income ratio Net Promoter Score > 2 565 cents > 15% < 54% #1 bank (2019 levels) (2019 levels) (from #3 in 2019) Medium Targets to 2025 term > CPI + GDP + 5% > 17% < 52% #1 bank (CAGR to e
Slide 6: Overview of the Township Economy
Overview of the Township Economy NEDBANK | RETAIL BANKING INVESTOR SHOWCASE
Slide 7: A human-centric approach to defining the market opportunity
A HUMAN-CENTRIC APPROACH TO DEFINING THE MARKET OPPORTUNITY THE TOWNSHIP ECONOMY Fundamental to its success is its unique expression of SOCIAL VALUE which is often placed ahead of financial value. A vital part of the SA economy where value is created and exchanged in monetary and non-monetary terms
Slide 8: Estimating the size of the market – by any definition it is very big
Estimating the size of the market – not accurately defined or sized, but by any definition it is very big NEDBANK GROUP LIMITED 8
Slide 9: Estimating the size of the market – sizing by province
Estimating the size of the market – sizing by province helps us with the prioritisation of opportunities by region when needed NEDBANK GROUP LIMITED 9
Slide 10: Estimating the size of the market – urban & peri-urban focus
Estimating the size of the market – with the focus on urban & peri-urban, these are the areas where the informal opportunity is the biggest Values indicate the size of the population NEDBANK GROUP LIMITED 10
Slide 11: The numbers are important but they only tell part of the story
THE NUMBERS ARE IMPORTANT BUT THEY ONLY TELL PART OF THE STORY… THE TOWNSHIP ECONOMY IS… NEDBANK | RETAIL BANKING INVESTOR SHOWCASE
Slide 12: The Township market has eight value creation activities
The Township market has eight value creation activities NEDBANK GROUP LIMITED 12
Slide 13: Drivers of social value fundamental to the township economy
…underpinned by 6 drivers of social value fundamental to the township economy value-exchange ecosystem NEDBANK GROUP LIMITED 13
Slide 14: The impact of loadshedding on small businesses in the Township Economy
The impact of loadshedding on small businesses in the Township Economy We have surveyed more than 200 small businesses in the Township market Trader sector Provincial breakdown Other 8,0% Gauteng Auto 2,4% Kwazulu Natal Consulting 2,4% Limpopo 8% Healthcare 2,8% Free State 4% Marketing 2,8% Eastern
Slide 15: Five key insights from the survey
Five key insights from the survey Operational 64% 66% costs Solar Mental health of township mentioned increased, is the most threat & small they have revenue lost, popular hustling businesses shed jobs & margins alternative resilience stop because of decreased (54%), though impact operations load sh
Slide 16: Responses to loadshedding
Responses to loadshedding What do you do when load shedding hits? Businesses surveyed have indicated that they react as follows to Nothing/Close Operate suboptimal Improvise Other tasks loadshedding: Find new location Gas/Parafin Generator Inverter/Battery Alternative sources of Energy Solar • Gener
Slide 17: Businesses have been forced to either close or reduce headcount
Businesses have been forced to either close or reduce headcount 5% Only 5% of businesses indicated that the loss of jobs was 29% because they closed down. Business Closed Reduced 90% have been operating for less than 10 years headcount No staff loss 66% Top 4 sectors that shed jobs due to loadsheddi
Slide 18: Solar is the most popular alternative (54%)
Solar is the most popular alternative (54%), though most businesses don’t know where to start looking for this solution Which options would you consider? Battery powered equipment 28% Inverter/UPS 47% Use gas 19% Solar power 54% Generators 46% ▪ From 3% currently using solar to 54% who would conside
Slide 19: Nedbank Integrated Channels strategic overview
Nedbank Integrated Channels strategic overview NEDBANK | RETAIL BANKING INVESTOR SHOWCASE
Slide 20: Nedbank Integrated Channel strategy – painting South Africa green
Nedbank Integrated Channel strategy – painting South Africa green We thrive in GROWING OUR PEOPLE, who CARE about and ENABLE GREAT MONEY CHOICES for all of SA Winning Aspiration Our aspiration is to paint South Africa Green with effective & synchronised distribution channels meeting the changing nee
Slide 21: Our biggest opportunity lies in the informal market
Our biggest opportunity lies in the informal market We want to play a meaningful & relevant role in enabling the Township Economy to drive economic recovery for the country by leveraging our financial expertise to help them grow their business Target segments The opportunity Church Taxi ▪ >50% of th
Slide 22: Shifting our RBB organisational structure to be more client-centred
Shifting our RBB organisational structure to be more client-centred – delivering great client experiences, drive revenue uplift & productivity enhancements through improvements in-branch & from our digital channels Branch staff sales Dedicated branch sales Nedbank branches Nedbank in retailers (Sale
Slide 23: Our points of presence
Our points of presence NEDBANK GROUP LIMITED – Nedbank Channel Showcase 23
Slide 24: Changing environments – our distribution footprint
Changing environments – our distribution footprint caters to market needs through a different mix of channels – physical & digital Physical Nedbank owned Partner presence – A mobile, highly skilled channels – to improve our reach in workforce that can meet client 5 different branch formats informal
Slide 25: Physical Nedbank owned channels – different branch formats
Physical Nedbank owned channels – 5 different branch formats, focusing on market needs Mega Nedbank Express Township Easy branch branch branch Mega branch Access branch Small branch Full service Conveniently centred around banking, with Full service Full service located branch, acquisition in high a
Slide 26: Partner presence – to improve our reach in informal & townships
Partner presence – to improve our reach in informal & townships Full- Acquisition Sales APIs MFC Home service model points channels loan model channels Provide Leveraging high Provide Extending our Reaching Reaching convenient footfall in convenient offering through clients through clients through a
Slide 27: A mobile, highly skilled workforce that can meet client needs anywhere
A mobile, highly skilled workforce that can meet client needs anywhere Formal Informal Relationship Specialised Service market market bankers services managers Staff operating in Informal market Highly skilled Specialised Dedicated formal markets mobile teams Business, Small Bankers working services
Slide 28: An agile micro-market operating model
An agile micro-market operating model – based on deep market insights A Micro Market is a geographical demarcation of an Branch area/location based on demographics, income level, footprint distance and propensity to travel, as well as the Cash & complexity of the clients. A micro market is made up o
Slide 29: A 'Layered' footprint through stores, mobile teams & partner stores
A ‘Layered’ footprint through a combination of Nedbank stores, mobile teams & 3rd Party/Partner stores NEDBANK GROUP LIMITED 29
Slide 30: Township market channel experiences
Township market channel experiences NEDBANK GROUP LIMITED – Nedbank Channel Showcase 30
Slide 31: Channel experiences – Immersion in the Khayelitsha Micro Market
Channel experiences – Immersion in the Khayelitsha Micro Market Nedbank owned model Relationship 1. Mobile Banker – meeting In-retailer partnership clients where they are Banking model 2. Branch – self-assisted, semi- model assisted & staff-assisted Showing up for our Rethinking branch zones clients
Slide 32: Channel experience 1: In-retailer model
Channel experience 1 In-retailer model NEDBANK GROUP LIMITED 32
Slide 33: Showcase flow within the Boxer Khayelitsha store
Showcase flow within the Boxer Khayelitsha store (30 mins walk through) Showcase of a client being onboarded Nedbank kiosk Nedbank representatives Nedbank overview of in store Showcase operating model of the ATM and strategy bank & our ATM Nedbank ATM Boxer Khayelitsha Investor welcome Briefing Boxe
Slide 34: Boxer is key strategic distribution partner of Nedbank
Boxer is key strategic distribution partner of Nedbank, where we provide in-store financial services solutions that can be concluded within the shopping experience Partnership of 15 years talks to the The in-store offering to clients The instore operating model has positive solutions we bring to the
Slide 35: Our future with Boxer will build on our present investments
Our future with Boxer will build on our present investments 2022 a year of investment as we put in place a foundation for ramping up for growth 200 534 7 million > 450 000 > 150 000 new financial withdrawals from till point deposits at Money transfers products sold within ATM’s within the Boxer cash
Slide 36: Strategic focus areas as we grow our Boxer value & footprint
There are a number of strategic focus areas that we continue to work on as we grow our Boxer value & footprint Adopting DPC Unlocking value Breaking the with competitor Achieving operational effectiveness counter by within the micro clients to solve for proactive selling market holistic solutions ▪
Slide 37: Leveraging Boxer opportunities within the Western Cape
Within the Western Cape we have leveraged the opportunities provided by Boxer, as they have scaled up their distribution footprint 15 Boxer stores within the Western Cape of 6 which we are in stores and will be operating a Boxer Lite model within the other 9 stores Within Boxer Khayelitsha there are
Slide 38: Channel experience 2: Nedbank Owned Model
Channel experience 2 Nedbank Owned Model NEDBANK GROUP LIMITED 38
Slide 39: Overview – Mobile Banker, Branch & Community Zone timelines
Overview – Mobile Banker, Branch & Community Zone timelines Mobile Bankers – Branch Walk Through – Community Zone – 15 minutes 10 minutes 5 minutes • Activation – 20 minutes NEDBANK GROUP LIMITED 39
Slide 40: Mobile Bankers – meeting clients where they are
Mobile Bankers – meeting clients where they are Operating model ▪ Informal mobile teams unlocking opportunities in hot-spot areas, building trust & loyalty within these areas ▪ Using 2-in-1 mobile devices off-site ▪ Partnering with Codeta Taxi association to improve our reach in informal & Township
Slide 41: Khayelitsha Mall Go to Market Activation
Khayelitsha Mall Go to Market Activation – onboarding of clients, current account, investments, funeral plans ONBOARDING NEW ATTRACTING MONEY CLIENTS CLIENTS APP 2-in-1 DEVICE • Digital for the simple and Human Onboard Money App, Funding, Onboard Money App, Funding for the complex and sensitive Gr
Slide 42: In-Branch Experience – Digital when you want it, Human when you need it
In-Branch Experience – ‘Digital when you want it, Human when you need it’ (branch zones in an Imagine format) Self-Service Semi-Assisted Fully Assisted Community zones *Boxer Acquisitions ✓ House all bank-owned Self- ✓ Provide Cash Services ✓ Solve Complex Clients ✓ Public meeting room space (Stokve
Slide 43: Community zone purpose
Community zones have turned Nedbank into an integral part of the community Community zone purpose Hosting financial education Provide relevant learning Provide infrastructure Provide infrastructure relevant to community material to community needs Who is the Community we are Financial Education doin
Slide 44: Community zones enable Nedbank to help South Africans make better money choices
Community zones enable Nedbank to help South Africans make better money choices for a better future Usage statistics since Onboarding What is it used for? launch new clients Consumer Financial Education a generic regulated financial programme that targets previously 75% 153 economically excluded cli
Slide 45: Channel experience 3: Relationship Banking Model
Channel experience 3 Relationship Banking Model NEDBANK GROUP LIMITED 45
Slide 46: Client visit: Nomenti Gas
Client visit: Nomenti Gas OWNER CUSTOMERS INDUSTRY Nomenti Gas Supplier of CNG & LPG gas in the Khayelitsha Ms 2 000+ area & surroundings 15-year-old business Mavis local Nongogo township residents Background EMPLOYEES Mavis Nongogo & her husband are the owners of this well- 45 - 50 employees establ
Slide 47: Nomenti Gas business journey
Nomenti Gas business journey • Mavis & her husband started a gas business in 2 containers back in 2004 Business 2004 opened • Due to the worldwide recession in 2008 the business suffered a set back, but opened its doors again in 2011 at the premises she now operates from. Business managed to buy the
Slide 48: Thank you
Thank you NEDBANK GROUP LIMITED 48
Slide 49: Disclaimer
Disclaimer Nedbank Group has acted in good faith and has made every reasonable effort to ensure the accuracy and completeness of the information contained in this document, including all information that may be defined as 'forward-looking statements' within the meaning of United States securities le