| Thu 7 Feb 2002, 0:00 | | Nedcor Investment Bank Holdings Limited - Financia |
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Nedcor Investment Bank Holdings Limited
(Incorporated in the Republic of South Africa)
(Reg No 1963/003972/06)
Share code: NIB ISIN code: ZAE0000019030
CHAIRPERSON'S REVIEW
The Nedcor Investment Bank Group (`NIB') has achieved sound financial
results since the formation of the merged group in 1997, achieving annual
compound headline earnings growth of 25,5% and an average annual return on
equity (`ROE') of 23%.
Through its ongoing focus on core activities and key strategic objectives,
NIB achieved headline earnings of R742,8 million (2000: R614,7 million) and
headline earnings per share of 46,1 cents (2000: 38,6 cents) for the year
ended 31 December 2001, despite challenging market conditions.
The environment
The past year has been particularly difficult. The economic downturn in the
United States has spread and has had a global impact. Declining consumer
confidence was aggravated by the events of
11 September, which had far-reaching consequences. All of this resulted in
volatility in the international financial markets. Germany and Japan's own
economic downturns led to the first global synchronised downturn since the
mid-1970s, and global equity and commodity markets came under pressure.
These circumstances prompted policy responses in the form of lower interest
rates and fiscal stimulation, and international markets staged a recovery
towards year-end.
Domestically, the year started with promise as lower interest rates and good
export growth boosted economic activity. However, as the year progressed,
export demand started to falter as world economic prospects worsened. The
weaker rand offset the negative revenue implications for local exporters but
failed to boost volumes. The rand's volatility and vulnerability dominated
for much of the year, but particularly in the final quarter following the 11
September events, as a variety of factors impacted on sentiment. These
included weaker commodity prices, the worsening conditions in Zimbabwe, and
emerging-market difficulties in Argentina and elsewhere. During the short
period from mid-November to late December the currency fell by over 30% on a
trade-weighted basis.
Financial markets were inevitably affected by the currency's depreciation.
The focus in the equity market was firmly on rand hedge stocks, with
resource shares rising by over 85% in 2001 despite declining dollar
commodity prices. Financial shares fared badly, falling by 12,2% as interest
rate fears began to surface late in the year. The industrial sector fell by
4%, mainly due to large declines in IT and telecommunications shares. The
bond market initially ignored the rand's plight, with long-term yields
falling to 20-year lows on reduced government borrowing and hopes of lower
inflation and short-term interest rates. However, yields reversed
significantly as the rand plummeted in December. Merger and acquisition
activity was sharply reduced, which is naturally adverse for the business of
investment banking.
Strategy
Objectives
Since its formation, NIB has consistently pursued a strategy in terms of
which it will:
- enhance the quality of its portfolio and underlying assets, and secure a
diverse income flow, both divisionally and geographically, on a sustainable
basis;
- create a generalised risk framework, which will be applied throughout the
organisation and underpin all existing and new operational initiatives and
products. This framework provides the organisation with a disciplined
approach to the assessment of pricing and risk;
- focus its core businesses on the wholesale and institutional segments of
the market;
- enter into joint ventures with partners, both domestically and
internationally, who offer complementary skills, distribution and products;
- seek actively to manage businesses requiring intellectual `value-add'.
Systems and administratively intensive businesses are not a core focus; and
- ringfence its shareholders' funds, ie not blend free funding into its
operations and only apply these funds either on a relatively risk-free basis
or in pursuit of value-added growth opportunities and offshore expansion.
NIB aims to achieve a capital adequacy ratio of at least 12,5% inclusive of
primary and secondary capital, and sustain an ROE in excess of 20%.
Initiatives
During the year NIB:
- bedded down the Franklin Templeton NIB Investments (`FTNIBI') merger
between the South African operations of Franklin Templeton Inc and NIB Asset
Management, and completed the transfer of related support systems to
FinSource (Pty) Limited, in which NIB has a 20% stake;
- continued to improve the quality of its property loan book, which has
resulted in its properties in possession (`PIPs') reducing from a level of
R437 million in 2000 to its current level of R301 million. During 2001 a
total of R311 million of PIPs were disposed of. Further developments over
the period have been the disposal of the residual transactional (small
balance) property book of some
R400 million subject to regulatory approvals;
- disposed of its 20% shareholding in Galaxy Portfolio Services Limited, an
administratively intensive linked-product service provider;
- transferred a major portion of its private equity portfolio to new funds
managed in partnerships with specialist managers;
- investigated various acquisition opportunities and entered into
preliminary discussions with a number of potential joint-venture partners;
- bolstered its offshore multimanager operations and extended its treasury
presence offshore. These initiatives have, inter alia, resulted in 33% of
shareholders' funds being deployed offshore;
- continued to integrate, where appropriate, the traditional corporate
finance services with Edward Nathan & Friedland (`ENF'); and
- introduced throughout the group a system of `operational risk' committees
reporting to the Audit Committee. NIB's risk management systems have been
supplemented by the employment of daily third-party verification of treasury
risk positions.
This focused strategy has resulted in the realisation of continued
efficiencies, with NIB's cost-to-income ratio having improved from 45,4% in
1997 to 32,6%, and NIB generating a consistently satisfactory ROE over the
period, which currently stands at 23,1%.
Liquidity of Nedcor Investment Bank Holdings Limited (`NIBH') shares
Information from market analysts over some time has indicated that there is
a concern about the lack of a free float, which has resulted in illiquidity
in the shares in NIBH. To address this matter, while at the same time taking
cognisance of the group's capital adequacy, which has reduced over the
course of the financial year from 13,5% to 11,1%, the board has adopted a
programme with the objectives of achieving:
- a capital adequacy ratio, inclusive of primary and secondary capital, at a
level of at least
12,5%; and
- the JSE's minimum public free-float requirement.
To achieve these objectives a cash dividend of 15,4 cents per share payable
in April 2002 has been declared, which is consistent with the cash dividend
policy adopted in the previous financial year. Shareholders will be able to
elect to utilise the cash proceeds to subscribe for additional shares in
NIBH. Nedcor will elect to exercise this right and has undertaken to place
the resulting shares, subject to market conditions permitting, with
institutional investors so as to reduce its shareholding in the company from
some 84% to 80%.
This is the first phase in the continuing process of addressing the
liquidity of NIB shares.
Corporate consciousness and social responsibility
NIB's social investment is regarded as an integral part of its business and
the group remains committed to creating, developing and maintaining an
equitable, non-discriminatory culture in an environment that promotes and
values openness and human dignity for, and superior performance of, all its
people.
During the year NIB introduced a diversity workshop programme for all staff
in terms of which the issues of diversity in South Africa, specifically in
the workplace, and their attitude towards social, racial and religious
differences were explored. The feedback from staff in this regard has been
extremely positive.
Our external monetary social-responsibility contributions have been effected
through the Nedcor Foundation. Through the Nedcor Foundation NIB is
affiliated with government, the non-government sector and other corporate,
business and development agencies, and contributes funding towards various
black management and business organisations. NIB contributed R8,1 million to
the Nedcor Foundation, these contributions being used primarily on
educational projects and initiatives conducted under the NIB brand.
NIB is represented on the boards of several empowerment companies and plays
an active role in providing strategic direction and counsel.
Credit rating
During the year NIB received further endorsements from independent rating
agencies. CA - Ratings, an affiliate of Standard and Poor, has given NIB its
highest possible short-term rating of zaA1 and a long-term rating of zaA,
indicating a strong capacity to pay interest and repay capital relative to
other South African obligators. Fitch IBCA has also given NIB its highest
possible short-term rating of F1 as well as a long-term rating of A+, which
also is its maximum long-term rating.
Board members
The NIB Board has been extended by the appointment to the board, as non-
executive directors, of Mr Rick Cottrell (effective January 2001), Mr
Phuthuma Nhleko (effective January 2002) and more recently Mr Nick Dennis,
whose appointment to the board becomes effective after 1 March 2002.
Mr George Bulterman reached the mandatory retirement age as a non-executive
director in terms of the articles of association and the board thanks him
for his service and for his astute contribution over the years since the
formation of NIB.
Corporate governance
Effective corporate governance and risk management are given priority by the
board and management of NIB, and constitute an integral part of the
development of NIB's strategy. Sound governance and risk management are of
fundamental importance in the context of banking businesses.
During the year Rick Cottrell was appointed as chairman of NIB's Audit
Committee, taking over from Mr Peter Joubert. Due to Mr Joubert's current
responsibility as chairman of the Nedcor Group Audit Committee, he has
decided to vacate the chairmanship of the NIB Audit Committee, but remains a
member thereof. The board extends its appreciation to Mr Joubert for his
excellent input and leadership of this committee over the years. The board
of NIB was expanded to comply with the King Committee recommendations. The
management of `operational risk' referred to under the strategy section
above forms a cornerstone of the governance of the business.
Outlook
For the economy
With a sensible combination of appropriate fiscal and monetary policies,
South Africa has unique opportunities to advance its economy and promote the
wellbeing of its peoples by concentrating on at least the following areas:
- tourism - South Africa is becoming an internationally favoured tourist
destination and important events such as the Earth Summit, the Conference of
the International Bar Association and the World Cricket Cup to be hosted in
the near future should be fully exploited;
- the construction and delivery of housing;
- the enhancement of infrastructure; and
- privatisation
Job creation will significantly benefit from these activities.
For the company
With the continued difficult economic environment in South Africa and
further expected regulatory changes, 2002 will be a challenging year for the
banking industry. We continue to pursue our immediate strategic objectives,
detailed previously, with specific emphasis on improving the liquidity of
the NIB share, developing our offshore operations and making complementary
acquisitions. NIB's advisory services are well-positioned to play a
meaningful role in the growth areas of the economy as identified above.
Acknowledgements
My sincere gratitude is extended to my colleagues on the NIB Board for their
great contributions over the past year. We are also most grateful to Nedcor
for all the assistance and cooperation we continue to receive. NIB's success
over the past year can be attributed to the commitment, enthusiasm and
professionalism of Izak Botha, Chief Executive, his executive colleagues and
all the employees of NIB. We are truly grateful to all of them for their
commitment to NIB's activities.
Prof MM Katz
Chairperson
Johannesburg
6 February 2002
CHIEF EXECUTIVE'S REVIEW
Earnings and balance sheet profile
Our earnings and continued growth in 2001 were based on diverse income
sources that have been strategically developed and shielded NIB from severe
market volatility over the second half of the year.
The return on average equity achieved was 23,1% (2000: 23,4%). Expenses were
well-contained and operating margins continued to strengthen, resulting in
an expense-to-income ratio of 32,6% (2000: 35,4%). Offshore earnings
continued to deliver good returns, increasing to 46,2% of total earnings
(2000: 39,3%), while local operations had another year of solid performance.
It is pleasing that NIB, as an investment bank in a volatile market, has
grown its assets by R5,0 billion to R30,2 billion and operating income by
R176 million to R1 323 million. As expected, there has been underlying
volatility in the profile of NIB's income and assets, notably driven by
NIB's treasury activities, which generated significant non-interest revenue
(`NIR') and altered the profile of its assets. Although advances in NIB's
Property and Structured Finance Divisions grew by 15% and 16% respectively,
NIB's net advances grew by only R531 million, mainly attributable to
reductions in the size of NIB's treasury trading book.
Since its formation, NIB has pursued a diversification strategy that
included an international initiative. This required NIB to invest capital
offshore, currently US$123 million, which has enabled NIB to apply for
certain regulatory licences to allow it further to develop its offshore
operations. The realised currency gain on its foreign capital structure was
R172,4 million (2000: R121,4 million). NIB actively hedges the currency risk
on its offshore capital and consequently the weaker rand did not directly
correlate to gains on NIB's foreign capital structure. NIB's hedging
strategy ensures that its earnings are protected against volatile exchange
rate fluctuations, as well as any post-financial-year-end strengthening of
the rand.
Advisory business
NIB's corporate finance and advisory business is focused predominantly on
advising large domestic corporates.
ENF continued to maintain its market position by actively pursuing a number
of niche areas in which the company is able to add value for clients. This
involved the restructuring of the relevant business units into dedicated
teams.
Progress was made with achieving closer cooperation, where appropriate,
between NIB and ENF. Fees of R145 million earned from the combined advisory
business reflect a 28% increase on the previous year's level.
In spite of a significant slowdown in corporate activity, the business
continued to grow and advised on a number of major transactions.
Capital account
NIB continues to manage shareholders' funds on a ringfenced basis, with core
activities managed on a fully costed, marginal-contribution basis. This
strategy has protected NIB from the adverse market contagion that undermined
a number of financial services companies during the year. NIB reports income
from capital account on a segmental basis, being `Capital Account -
Endowment' and `Capital Account - Value Added'. The `endowment' return is
the relative risk-free return on shareholders' funds invested in cash and
other liquid securities. The `value-added' return, including the foreign
structure gains, is the excess return achieved by capital account in support
of NIB's operations, including offshore activities.
Returns on NIB's capital invested in offshore structures have been reflected
separately in the detailed segmental analysis. The US$123 million, including
unappropriated reserves, invested in NIB's foreign operations represents
approximately 33% of NIB's shareholders' funds being deployed in the ongoing
development of NIB's foreign treasury, structured- and project finance, and
multimanager activities.
Private equity investment
NIB has continued to focus its private equity activities by direct
investment for own account and by investment in and funding of private
equity theme funds that manage third-party money. NIB also invests directly
in the respective management companies of these funds. In particular, NIB co-
invests with experienced individuals who manage private equity funds and who
have incentives to outperform benchmarked performance.
NIB participates in four funds, namely NIB-MDM, a fully invested R100-
million small-capitalisation private equity fund; the Transformation Fund, a
R240-million empowerment-based fund; the Treacle Fund, which is a R244-
million fund focusing on technology media and telecommunications; and
Partnership Investments, a fully invested management buyout fund of R80
million.
During the year provisions and writedowns of R30 million were made to the
general equity portfolio as investment values were downgraded in line with
the small-capitalisation sector of the equity market.
The private equity market remains uncertain and NIB will continue to take a
cautious view of the industries in which it invests.
Property Division
Property Finance
The Property Finance Division continues to exercise strict credit criteria
in determining which property investments it will finance. With these
criteria in place, the loan portfolio grew by 15% over the year to over R6,2
billion (2000: R5,4 billion). Particular success was achieved during the
year in providing funding for several listed property entities within the
property unit trust and property loan stock sectors. Interest rates had a
stabilising effect on the property market, but surplus office capacity
continues to be a concern. Property Finance's loan portfolio profile is such
that any negative impact on this market will have a minimal effect on
portfolio returns.
A pleasing trend has been the reduction by R921 million over the last two
years of high risk exposures, which include non-performing exposures in our
property finance activities. This has been achieved through constant
management by our centralised Credit Risk Management Department. The level
of non-performing loans has reduced from R358 million at the end of 1999 to
R93 million by the end of 2001. Non-performing loans, net of provisions and
interest reserved, now amount to R39 million, which is 0,62% (2000: 3,29%)
of Property Finance's book. This reduction will have a favourable impact on
future earnings.
Properties in possession
PIPs typically arise from properties acquired by NIB in exercising its right
to underlying security on loan defaults. NIB was successful during the year
in disposing of a large number of PIPs, thereby reducing the total
investment in bought-in properties by a net R42 million to R301 million by
year-end.
Other strategic alliances managed by NIB
Trusts
Syfrets Trust Limited (`STL'), a 50:50 joint venture with Nedcor Bank
Limited, continued to enhance its market positioning and infrastructure
through its acquisition of the KwaZulu-Natal fiduciary business of Deloitte
& Touche. A number of initiatives are being pursued through Nedbank's retail
distribution network to broaden the income sources of the business. STL
administers trusts with a value of R2,1 billion.
Securities
NIB Securities (Pty) Limited endured pressure on margins and market volumes,
with extreme market volatility, which resulted in tough trading conditions
and marginal profitability. However, as a result of its low cost structure
and established institutional client base, it is well-placed to take
advantage of any improvement in market conditions.
Structured and Project Finance
The division had a highly successful year, characterised by growth of 16% in
its advances book. This forms a sound basis for future annuity earnings. A
highlight for Project Finance was the finalisation of the R2,7 billion N4
Bakwena Platinum Tollroad structure, for which NIB acted as joint lead
arranger and underwriter.
Structured Finance experienced continued demand for general funding and
capital projects, both in South Africa and Namibia, resulting in the
finalisation of transactions of some R2 billion in the year. The team, which
was further enhanced during the year by additional appointments, is in the
process of exploring a number of other new business opportunities.
Treasury Division
All Treasury's business units, namely funding, market-making, financial
products, derivatives and sales, performed well and within risk limits.
Diversification of income proved to be a resilient strategy in difficult
market conditions.
Treasury Division's activities during the course of the year included the
following:
- The appointment as lead manager for the R2 billion Nedcor Limited
secondary capital raising.
- The combining of NIB Quants Asset Management (`NIB Quants') business with
Treasury's cash outperformance funds management business to form an
alternative asset management business with funds under management in excess
of R9 billion.
- The addition of an agricultural commodity trading desk to Treasury's
product suite.
- The submission of regulatory applications to allow for the expansion of
NIB's London treasury operations to include asset management, deal sourcing
and structuring.
Asset Management
NIB manages R43,5 billion (2000: R28,4 billion) of third-party funds through
different styles of asset management. During the year NIB made pleasing
progress in consolidating and focusing these businesses.
Franklin Templeton NIB Investments
FTNIBI is an active judgmental asset management 50:50 equity-accounted joint
venture that manages a wide range of institutional, unit trust and private
client portfolios with an aggregate value of some R22 billion. During the
year the business completed the merger between Franklin Templeton and NIB's
domestic asset management operations and absorbed all related merger costs.
After a slow start it is pleasing that the business is generating promising
profitability and that its investment performance has improved. FTNIBI's
institutional fund management performance and retention and building of
skills were issues that required significant management attention during the
year. FTNIBI's suite of unit trusts performed particularly well, gaining
high rankings in the annual Plexus survey and receiving a Raging Bull award
for its flagship Prime Select Fund. In collaboration with FTNIBI's
international shareholder, Franklin Templeton Inc, clients have invested
assets in excess of R2 billion in the Franklin Templeton range of
international SICAV funds, which were recently ranked first of the 20
largest US fund groups in an analysis by Kanon Bloch Carre.
NIBi
The fusion of our local and international multimanager business under a
single brand - NIBi - was complemented with the launch of various innovative
products. NIBi is well-positioned as a niche rand hedge multimanager with
80% of its income in US dollars. NIBi now has assets under management in
excess of R11 billion (2000: R7,6 billion) and is achieving scale benefits
that reflect in profits.
Notwithstanding the difficult asset management environment in 2001, NIBi
delivered strong organic growth and has built a reputation as an alternative
investment specialist in offshore jurisdictions, as well as the Middle East.
Locally, NIBi was instrumental in launching a new empowerment asset
management initiative, Sonotha Investment Managers, together with a number
of influential empowerment partners.
Quantitative asset management and cash outperformance funds management
NIB Quants was combined with NIB Treasury's enhanced cash management
business, resulting in total assets under management in excess of R9,0
billion. This combined business, which falls under Treasury Division, is
well-positioned to offer new and existing clients enhanced equity, bond and
cash management on an indexed, hedged or absolute-return basis.
NIB Quants continued to experience strong growth in its core enhanced index
business. Additionally, a number of absolute-return mandates was secured and
reflects a growing trend in the industry. New business inflows exceeded R1
billion. Important additions were made to its product range and technology
suite during the year to maintain its position in the vanguard of
developments in index and absolute-return core fund management.
Declaration of dividend
Notice is hereby given that a final cash dividend of 15,4 cents (2000: 12,9
cents) per ordinary share was declared on 6 February 2002 for the 12 months
ended 31 December 2001.
All shareholders entitled to participate in this dividend will, after
becoming entitled thereto, have the right to elect to apply the full
proceeds of the dividend to subscribe for new shares in the company (`the
subscription shares') in the ratio that 15,4 cents per share multiplied by
1,05 bears to the weighted average traded price of the shares on the JSE
Securities Exchange South Africa (`JSE') for the 20 trading days ending at
the close of business on Tuesday, 19 March 2002, subject to a minimum
subscription price of 300 cents per share. A further announcement will be
published on or about Wednesday, 20 March 2002, setting out further details.
For shareholders exercising the above election the dividend will be paid in
cash for their benefit and on their behalf into a dedicated trust account
held with Syfrets Trust Limited, and the proceeds of such payment will
forthwith be applied in paying for their subscription shares on Monday, 8
April 2002.
Trading in the STRATE environment requires settlement within five business
days. In accordance with the settlement procedures of STRATE NIBH has
determined the last day for trading to participate in the final dividend to
be Wednesday, 27 March 2002. NIBH's shares will commence trading ex-dividend
on Thursday, 28 March 2002.
The subscription shares will not participate in this dividend.
A circular setting out the full details of these arrangements and containing
the necessary election forms will be posted to shareholders on or about
Wednesday, 13 March 2002. In order to be valid completed election forms will
need to be received by NIBH's transfer secretaries not later than 12:00 on
Wednesday, 3 April 2002. The record date will be Friday, 5 April 2002.
Dividend transfers will be made to and subscription shares will be
registered in the names of shareholders on Monday, 8 April 2002.
A further announcement will be published on or about Tuesday, 9 April 2002,
giving details of the results of the subscription election.
Prospects
Despite continued market volatility, subdued merger and acquisition
activity, and tight conditions in structured finance, NIB's transaction
pipeline for the coming year is encouraging and all our teams expect to
expand their market presence both locally and internationally.
With our diverse income base and stability in our staff complement we are
optimistic about the opportunities available for NIB in 2002.
Acknowledgements
The board and Nedcor Group have played a large part in contributing to the
growth and success of NIB over the years. In particular, I would like to
thank my executive management and all the employees of NIB for their
unstinting effort and professionalism in contributing to our success.
Dr IJ Botha
Chief Executive
Johannesburg
6 February 2002
Financial highlights
Audited Audited %
2001 2000 change
Selected ratios
Return on average equity (%) 23,1 23,4 (1)
Return on average Banks Act
risk-adjusted assets (%) 3,3 3,8 (0)
Non-interest revenue to total income (%) 76,3 71,9 6
Expense-to-income ratio (%) 32,6 35,4 8
Capital adequacy
Shareholders' funds (Rm) 3 311 3 192 4
Total assets (Rm) 30 242 25 176 20
Group capital adequacy ratio (%) 11,1 13,5 (18)
Share statistics
Headline earnings per share (cents) 46,1 38,6 20
Diluted headline earnings per
share (cents) 43,3 36,6 18
Weighted average number of shares (m) 1 610 1 591 1
Shares in issue (m) 1 612 1 608 -
Share price (cents) 300 270 11
Market capitalisation (Rbn) 4,8 4,3 12
Group income statement
Audited Audited
2001 2000 %
Rm Rm change
Interest income 2 546 2 465 3
Interest expense 2 223 2 133 (4)
Net interest income 323 332 (3)
Non-interest revenue 1 040 850 22
Operating income 1 363 1 182 15
Specific and general provisions 40 35 (15)
Net income 1 323 1 147 15
Operating expenditure 445 419 (6)
Net operating income 878 728 21
Income from associated companies 9 17 (47)
Net capital profit on disposal
and restructuring of businesses - 13 -
Net income before taxation 887 758 17
Taxation 144 78 (86)
Income attributable to shareholders 743 680 9
Headline earnings reconciliation
Income attributable to shareholders 743 680 9
Less: Net capital profit after
taxation on disposal
and restructuring of businesses - (65) -
Headline earnings 743 615 21
Group balance sheet
Audited Audited
2001 2000
Rm Rm
Assets
Cash and short-term funds 3 961 1 668
Other short-term securities 2 389 1 794
Government and public sector securities 3 689 2 498
Advances and other accounts 18 624 18 093
Associated companies 61 58
Other investments 1 481 975
Property and equipment 37 81
Customers' indebtedness for acceptances - 9
Total assets 30 242 25 176
Equity and liabilities
Shareholders' funds 3 311 3 192
Long-term debt 2 1
Deposit, current and other accounts 26 929 21 974
Liabilities under acceptances - 9
Capital, reserves and liabilities 30 242 25 176
Consolidated statement of changes in equity
Non-
Ordinary distribu- Distribu-
share Share table table
capital premium reserves reserves Total
Rm Rm Rm Rm Rm
Balance as at
1 January 2000 16 398 16 2 105 2 535
Prior-year adjustment* (11) (11)
Restated balance as
at 1 January 2000 16 398 16 2 094 2 524
Issue of new share capital 36 36
Transfers (3) 3 -
Currency translation and
other adjustments (2) (37) (39)
Attributable earnings 680 680
Dividend - cash election (9) (9)
Balance as at
31 December 2000 16 434 11 2 731 3 192
Issue of new share capital 4 4
Redemption of preference
share capital (400) (400)
Currency translation
and other adjustments (3) (17) (20)
Attributable earnings 743 743
Dividend - cash (208) (208)
Balance as at
31 December 2001 16 38 8 3 249 3 311
* Prior year adjusted to align with AC116 (Employee Benefits), on a post-tax
basis, relating to leave pay provisions.
Consolidated cash flow statement
Audited Audited
2001 2000
Rm Rm
Cash flows from operating activities 941 817
Cash received from clients 3 475 3 248
Cash paid to clients, employees and suppliers (2 654) (2 529)
Dividends received on investments 120 98
Changes in working funds 2 487 565
Taxation paid (50) (48)
Net cash utilised in investment activities (478) (419)
Net cash utilised by financing activities (607) (52)
Net cash generated 2 293 863
Cash and short-term funds at beginning of year 1 668 805
Cash and short-term funds at end of year 3 961 1 668
Segmental analysis of headline earnings
Audited Audited
2001 2000 %
Rm Rm change
By major business area
Advisory services 36 33 9
Capital account 369 261 42
Multimanager 19 5 287
Private equity investments (24) 19 (224)
Property 36 23 60
Strategic alliances 9 17 (47)
Structured and project finance 143 125 15
Treasury 155 132 17
743 615 21
Domestic earnings 400 373 7
Return on investment in
offshore structure 172 122 42
International earnings 171 120 42
743 615 21
Comparative figures are restated, where necessary, to afford a proper
comparison. Percentages are calculated using actual numbers.
www.nib.co.za
Registered office
1 Newtown Avenue, Killarney, Johannesburg, 2193
Transfer secretaries
Mercantile Registrars Limited, 11 Diagonal Street, Johannesburg, 2001
Transfer Secretaries (Pty) Limited, PO Box 2401, Windhoek, Namibia
Directors
Prof MM Katz *(Chairperson), Dr IJ Botha *(Chief Executive), JR Bestbier*,
RG Cottrell, ML Davis, BE Davison, PG Joubert, PH Lane*, RCM Laubscher, CF
Liebenberg, E Molobi, SG Morris, PF Nhleko, Dr LA Porter, GF Richardson, WC
Ross*, AA Routledge, R van Wyk*
(*Director)
Company Secretary
JS Eisenhammer
Hard Thinking
Flawless Execution
Tangible Results
