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JSE NBKP
NBKP
NBKP- Nedbank- Reviewed interim financial results: six months ended 30 June 2007
Nedbank Limited
Reg No 1951/000009/06
Incorporated in the Republic of South Africa
JSE share code: NBKP ISIN: ZAE000043667
Reviewed interim financial results for the six months ended 30 June 2007
Overview
Nedbank is a wholly owned subsidiary of Nedbank Group Limited, which is listed
on JSE Limited. These consolidated financial results are published to provide
information to holders of Nedbank`s listed non-redeemable non-cumulative
preference shares.
Commentary relating to the consolidated Nedbank financial results is included in
the Nedbank Group Limited group results, as presented to shareholders on 6
August 2007. Further information is provided on the website:
www.nedbankgroup.co.za.
Accounting policies
Nedbank Limited (the `company`) is a company domiciled in South Africa. The
reviewed financial results of the company at and for the period ended 30 June
2007 comprise those of the company and its subsidiaries (together referred to as
the `group`) and the group`s interests in associates and jointly controlled
entities.
The group`s principal accounting policies have been applied consistently with
those disclosed in the consolidated financial statements of Nedbank Limited at
and for the year ended 31 December 2006. The interim condensed consolidated
financial statements of Nedbank Limited have been prepared in accordance with
IAS 34: Interim Financial Reporting and consist of the consolidated income
statement, consolidated balance sheet, condensed consolidated statement of
changes in equity, condensed consolidated cash flow statement and selected
explanatory notes. The selected explanatory notes are marked with (1).
Reviewed results - auditors` opinion
KPMG Inc and Deloitte & Touche, the company`s independent auditors, have
reviewed the interim condensed financial statements contained in this interim
report and have expressed an unmodified conclusion on the interim condensed
financial statements. The review report is available for inspection at the
company`s registered office.
Nedbank non-redeemable non-cumulative preference shares - declaration of
dividend no 9
Notice is hereby given that preference dividend no 9 of 46,72603 cents per share
has been declared for the period from 1 January 2007 to 30 June 2007, payable on
Monday, 3 September 2007, to shareholders of the non-redeemable non-cumulative
preference shares recorded in the books of the company at the close of business
on Friday, 31 August 2007.
In accordance with the provisions of STRATE, the electronic settlement and
custody system used by JSE Limited, the relevant dates for the payment of the
dividend are as follows:
Last day to trade cum dividend Friday, 24 August 2007
Shares trade ex dividend Monday, 27 August 2007
Record date Friday, 31 August 2007
Payment date Monday, 3 September 2007
Share certificates may not be dematerialised or rematerialised between Monday,
27 August 2007, and Friday, 31 August 2007, both days inclusive.
Where applicable, dividends in respect of certificated shares will be
transferred electronically to shareholders` bank accounts on the payment date.
In the absence of specific mandates, dividend cheques will be posted to
shareholders. Shareholders who have dematerialised their share certificates
will have their accounts, at their participant or broker, credited on Monday, 3
September 2007.
For and on behalf of the board
RJ Khoza TA Boardman
Chairman Chief Executive
6 August 2007
Registered office:
Nedbank Sandton, 135 Rivonia Road, Sandown, 2196;
PO Box 1144, Johannesburg, 2000
Transfer secretaries:
Computershare Investor Services 2004 (Pty) Ltd, 70 Marshall Street,
Johannesburg, 2001; PO Box 61051, Marshalltown, 2107
Directors:
Dr RJ Khoza (Chairman), Prof MM Katz (Vice-chairman), ML Ndlovu (Vice-chairman),
TA Boardman* (Chief Executive), CJW Ball**, MWT Brown* (Chief Financial
Officer), TCP Chikane, BE Davison, N Dennis (British), MA Enus-Brey, Prof B de L
Figaji, RM Head (British), JB Magwaza, ME Mkwanazi, CML Savage, GT Serobe, JH
Sutcliffe (British)
* Executive **Senior independent director
Company Secretary: GS Nienaber
Sponsors: Investec Bank Limited, Nedbank Capital
Consolidated income statement
for the period ended Reviewed Reviewed Audited
June June December
Rm 2007 2006 2006
Interest and similar income 18 319 12 118 27 089
Interest expense and similar 11 961 7 253 16 600
charges
Net interest income 6 358 4 865 10 489
Impairments charge on loans and 1 009 804 1 465
advances
Income from lending activities 5 349 4 061 9 024
Non-interest revenue* 4 679 4 047 8 566
Operating income 10 028 8 108 17 590
Total expenses 6 018 5 343 11 725
Operating expenses* 5 948 5 278 11 581
BEE transaction expenses 70 65 144
Indirect taxation 129 151 334
Profit from operations before non- 3 881 2 614 5 531
trading and capital items
Non-trading and capital items 19 250 183
Impairment of goodwill (1)
Profit on sale of subsidiaries, 21 260 242
investments and property and
equipment
Net impairment of investments, (2) (10) (58)
property and equipment, and
capitalised development costs
Profit from operations 3 900 2 864 5 714
Share of profits of associates 55 17 68
and joint ventures
Profit before direct taxation 3 955 2 881 5 782
Direct taxation 1 034 785 1 645
Taxation on non-trading and (2) 33 24
capital items
Profit for the period 2 923 2 063 4 113
Attributable to:
Profit attributable to equity 2 777 1 951 3 870
holders of the parent
Profit attributable to minority 139 112 243
interest - ordinary shareholders
- preference shareholders 7
Profit for the period 2 923 2 063 4 113
* June 2006: Reclassification of transaction costs in non-interest revenue
(NIR)
Expenses amounting to R26 million for the period, directly related to NIR, have
been reclassified from operating expenses, consistent with industry practice,
and have been included in NIR.
These expenses represent transaction costs directly attributable to the
acquisition of trading investments recorded at fair value, which do not include
transaction costs. The carrying amount of financial instruments, other than
those at fair value through profit or loss, generally includes transaction
costs. Consequently, transaction costs that would be included in the
determination of the effective interest rate of the instruments and the interest
attributable to these instruments have been disclosed within NIR.
Earnings reconciliation (1)
for the period ended Reviewed Reviewed Audited
June June December
Rm 2007 2006 2006
Profit attributable to equity 2 777 1 951 3 870
holders of the parent
Less: non-trading capital items 21 217 159
Impairment of goodwill (1)
Net profit on sale of 21 260 242
subsidiaries, investments and
property and equipment
Net impairment of investments, (2) (10) (58)
property and equipment, and
capitalised development costs
Taxation on above items 2 (33) (24)
Headline earnings 2 756 1 734 3 711
Condensed consolidated cash flow statement
for the period ended Reviewed Reviewed Audited
June June December
Rm 2007 2006 2006
Cash generated by operations 5 574 3 821 8 114
Change in funds for operating (1 595) (6 524) (5 267)
activities
Net cash generated from operating 3 979 (2 703) 2 847
activities before taxation
Taxation paid (1 245) (198) (752)
Cash flows from/(utilised by) 2 734 (2 901) 2 095
operating activities
Cash flows utilised by investing (930) (387) (730)
activities
Cash flows from financing 1 780 1 583 508
activities
Net increase/(decrease) in cash 3 584 (1 705) 1 873
and cash equivalents
Cash and cash equivalents at the 18 191 16 318 16 318
beginning of the period*
Cash and cash equivalents at the 21 775 14 613 18 191
end of the period*
* Including mandatory reserve deposits with central bank.
Consolidated balance sheet
at Reviewed Reviewed Audited
June June December
Rm 2007 2006 2006
Assets
Cash and cash equivalents 14 046 8 587 11 165
Other short-term securities 14 175 13 347 13 855
Derivative financial instruments 9 189 11 154 10 314
Government and other securities* 25 107 16 587 22 031
Loans and advances** 346 299 277 640 319 180
Other assets 5 021 6 110 5 120
Clients` indebtedness for 2 651 1 617 2 544
acceptances
Current taxation receivable 832 119 138
Investment securities 2 850 2 595 2 385
Non-current assets held for sale 25 7 41
Investments in associate 839 390 690
companies and joint ventures
Deferred taxation asset 85 125 48
Investment property 66 71 66
Property and equipment 3 411 3 127 3 323
Long-term employee benefit assets 1 409 1 279 1 357
Computer software and capitalised 1 235 1 226 1 236
development costs
Mandatory reserve deposits with 7 729 6 026 7 026
central bank
Goodwill** 1 369 1 370 1 369
Total assets 436 338 351 377 401 888
Total equity and liabilities
Ordinary share capital 27 27 27
Ordinary share premium 14 422 14 422 14 422
Reserves 11 686 7 631 9 583
Total equity attributable to 26 135 22 080 24 032
equity holders of the parent
Preference share capital and 3 131 2 770 2 770
premium
Minority shareholders` equity
attributable to
- ordinary shareholders 1 230 828 955
- preference shareholders 300 300 300
Total equity 30 796 25 978 28 057
Derivative financial instruments 10 089 14 260 11 549
Amounts owed to depositors 368 233 290 152 339 164
Other liabilities* 10 134 7 917 9 098
Liabilities under acceptances 2 651 1 617 2 544
Current taxation liabilities 249 371 338
Deferred taxation liabilities 1 933 742 1 410
Long-term employee benefit 1 225 1 124 1 210
liabilities
Long-term debt instruments 11 028 9 216 8 518
Total liabilities 405 542 325 399 373 831
Total equity and liabilities 436 338 351 377 401 888
Guarantees on behalf of clients 18 524 12 798 15 235
* Certain bond positions were not set off in the June 2006 reporting period and
have been restated for comparability purposes.
** Goodwill on acquisition of BoE Bank Limited assets and liabilities by
Nedbank Limited
On the acquisition of the assets and liabilities of BoE Bank Limited the excess
of the purchase price over the identifiable assets, liabilities and contingent
liabilities was applied to reduce the loan amount owing to BoE Bank Limited. To
align the accounting with the purchase agreement the excess amounting to R807
million has been raised as goodwill. June 2006 results have been restated
accordingly.
Contingency note
Historically a number of group companies entered into structured-finance
transactions with third parties, using their tax bases. In the majority of these
transactions the underlying third parties contractually agreed to accept the
risk of any tax imposed by the South African Revenue Service (SARS), although
the obligation to pay rested in the first instance with the group companies. It
would only be in limited cases, for example where the credit quality of a client
became doubtful or where the client specifically contracted out of the repricing
of additional taxes, that the recovery from a client could be less than the
liability arising on assessment, in which case provisions would be made.
SARS has recently assessed structures in a manner contrary to the way initially
envisaged by the contracting parties and continues to examine other structures.
As a result group companies are, or could be, obliged to pay additional amounts
to SARS and recover these from clients under various applicable contractual
arrangements.
Condensed consolidated statement of changes in equity
Minority
Total equity shareholders`
attributable equity
to equity Preference attributable
holders of share capital to preference
Rm the parent and premium shareholders
Balance at 31 20 712 2 770 -
December 2005
Net income recognised (73) - -
directly in equity
Foreign currency 26
translation reserve
movement
Available-for-sale (124)
reserve movement
Share-based payments 55
reserve movement
Other movements (30)
Profit for the period 1 951
Dividends paid to (400)
ordinary shareholders
Dividends paid to (110)
preference
shareholders
Shares 300
issued/(repurchased)
by subsidiary
Balance at 30 June 22 080 2 770 300
2006
Net income recognised 410 - -
directly in equity
Foreign currency 62
translation reserve
movement
Available-for-sale 182
reserve movement
Revaluation of owner- 75
occupied property
Share-based payments 79
reserve movement
Other movements 12
Profit for the period 1 919
Dividends paid to (268)
ordinary shareholders
Dividends paid to (109)
preference
shareholders
Balance at 31 24 032 2 770 300
December 2006
Net income recognised 71 - -
directly in equity
Foreign currency 6
translation reserve
movement
Available-for-sale 3
reserve movement
Revaluation of owner- 1
occupied property
Share-based payments 58
reserve movement
Other movements 3
Profit for the period 2 777 7
Ordinary minority 6
shareholders` share
of preference
dividends paid
Dividends paid to (745) (13)
shareholders
Issues of shares net 361
of expenses
Shares issued by
subsidiary
Balance at 30 June 26 135 3 131 300
2007
Minority
shareholders`
equity
attributable
to ordinary Total
Rm shareholders equity
Balance at 31 872 24 354
December 2005
Net income recognised 1 (72)
directly in equity
Foreign currency 26
translation reserve
movement
Available-for-sale (124)
reserve movement
Share-based payments 55
reserve movement
Other movements 1 (29)
Profit for the period 112 2 063
Dividends paid to (7) (407)
ordinary shareholders
Dividends paid to (110)
preference
shareholders
Shares (150) 150
issued/(repurchased)
by subsidiary
Balance at 30 June 828 25 978
2006
Net income recognised (1) 409
directly in equity
Foreign currency 62
translation reserve
movement
Available-for-sale 182
reserve movement
Revaluation of owner- 75
occupied property
Share-based payments 79
reserve movement
Other movements (1) 11
Profit for the period 131 2 050
Dividends paid to (3) (271)
ordinary shareholders
Dividends paid to (109)
preference
shareholders
Balance at 31 955 28 057
December 2006
Net income recognised 3 74
directly in equity
Foreign currency 6
translation reserve
movement
Available-for-sale 3
reserve movement
Revaluation of owner- 1
occupied property
Share-based payments 58
reserve movement
Other movements 3 6
Profit for the period 139 2 923
Ordinary minority (6) -
shareholders` share
of preference
dividends paid
Dividends paid to (11) (769)
shareholders
Issues of shares net 361
of expenses
Shares issued by 150 150
subsidiary
Balance at 30 June 1 230 30 796
2007
Condensed operational segmental reporting (1)
for the period ended Reviewed Reviewed Audited
June 2007 June 2006 December
2006
Rbn Rbn Rbn
Total Total Total
assets assets assets
Nedbank Corporate 187 149 175
Nedbank Capital 149 128 138
Nedbank Retail 142 108 125
Imperial Bank 34 26 30
Shared Services 6 7 8
Central Management 18 13 13
Eliminations (75) (50) (64)
Total per Nedbank Group 461 381 425
Fellow-subsidiary adjustments (25) (30) (23)
Total 436 351 402
Segmental reporting comparative results have been restated for improved
profitability measurement.
Condensed operational segmental reporting (1)
for the period ended Reviewed Reviewed Audited
June 2007 June 2006 December
2006
Rm Rm Rm
Operating Operating Operating
income income income
Nedbank Corporate 4 233 3 505 7 596
Nedbank Capital 1 245 1 298 2 605
Nedbank Retail 4 782 3 975 8 591
Imperial Bank 541 427 932
Shared Services 44 47 286
Central Management (421) (437) (859)
Eliminations (130) (80) (203)
Total per Nedbank Group 10 294 8 735 18 948
Fellow-subsidiary adjustments (266) (627) (1 358)
Total 10 028 8 108 17 590
Segmental reporting comparative results have been restated for improved
profitability measurement.
Condensed operational segmental reporting (1)
for the period ended Reviewed Reviewed Audited
June 2007 June 2006 December
2006
Rm Rm Rm
Headline Headline Headline
earnings earnings earnings
Nedbank Corporate 1 541 1 198 2 515
Nedbank Capital 545 576 1 145
Nedbank Retail 956 711 1 463
Imperial Bank 107 89 193
Shared Services 20 (82) (138)
Central Management (394) (388) (743)
Eliminations
Total per Nedbank Group 2 775 2 104 4 435
Fellow-subsidiary adjustments (19) (370) (724)
Total 2 756 1 734 3 711
Segmental reporting comparative results have been restated for improved
profitability measurement.
Condensed geographical segmental reporting (1)
for the period ended Reviewed Reviewed Audited
June 2007 June 2006 December
2006
Restated
Operating Operating Operating
Rm income income income
South Africa 9 627 8 151 17 616
Business operations 9 627 8 151 17 616
BEE transaction costs
Profit attributable to
minority interest -
preference shareholders
Rest of Africa 288 281 657
Business operations 288 281 657
BEE transaction costs
Rest of world - business 379 303 675
operations
Total per Nedbank Group 10 294 8 735 18 948
Fellow-subsidiary adjustments (266) (627) (1 358)
Total 10 028 8 108 17 590
Condensed geographical segmental reporting (1)
for the period ended Reviewed Reviewed Audited
June 2007 June 2006 December
2006
Headline Headline Headline
Rm earnings earnings earnings
South Africa 2 631 1 984 4 176
Business operations 2 839 2 157 4 516
BEE transaction costs (79) (63) (121)
Profit attributable to (129) (110) (219)
minority interest -
preference shareholders
Rest of Africa 50 41 76
Business operations 51 41 99
BEE transaction costs (1) (23)
Rest of world - business 94 79 183
operations
Total per Nedbank Group 2 775 2 104 4 435
Fellow-subsidiary adjustments (19) (370) (724)
Total 2 756 1 734 3 711
These results and additional information are available on www.nedbankgroup.co.za
A Member of the OLD MUTUAL Group
Date: 06/08/2007 08:00:16 Produced by the JSE SENS Department.
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