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Nedbank Limited - Audited financial results for the year ended 31 December 2003
Nedbank Limited
(Registration number 1951/000009/06)
Share Code: NBKP
ISIN: ZAE000043667
Audited financial results for the year ended 31 December 2003
Commentary
Nedbank Limited is a wholly owned subsidiary of Nedcor Limited, which is listed
on the JSE Securities Exchange South Africa. These consolidated annual financial
results are published to provide information to holders of Nedbank Limited"s
listed non-redeemable non-cumulative preference shares.
The consolidated financial statements are prepared in accordance with, and
comply with, South African Statements of Generally Accepted Accounting Practice
and the requirements of the South African Companies Act and Banks Act. The
accounting policies adopted and applied are in all material respects consistent
with those of the previous year with the exception of the change in the basis of
accounting and certain restatements as set out in the Nedcor Limited Financial
results.
The consolidated financial results of Nedbank Limited comprise for 2002 the
restated net assets and results of Nedbank Limited, Peoples Bank Limited,
Imperial Bank Limited and, for 2003 with effect from 1 January 2003, the net
assets and results of operations acquired from BoE Limited, Nedcor Investment
Bank Holdings Limited (NIB) and Cape of Good Hope Bank Limited (CoGHB).
Nedbank Limited was required to adopt the complex accounting standard AC133
`Financial Instruments: Recognition and Measurement" with effect from 1 January
2003.
These structural and accounting policy changes mean that the results for the
years ended 31 December 2002 and 2003 are not comparable, as the 2002 figures do
not include the operations of BoE, NIB and CoGHB, and the figures for 2003 are
prepared on the AC133 basis of accounting.
Commentary relating to the consolidated Nedbank Limited financial results was
included in the Nedcor Limited group results as presented to shareholders on 23
February 2004. Further information is provided on our website at www.nedcor.com.
In terms of a SENS notice of 23 February 2004 preference dividend No 2 of
51,16438 cents per share was declared for the period from 1 July 2003 to 31
December 2003 and paid on 29 March 2004 to shareholders of the non-redeemable
and non-cumulative preference shares recorded in the books of the company at the
close of business on 26 March 2004.
These results have been audited by the company"s auditors, KPMG Inc. and
Deloitte & Touche, and the audit opinion is available for inspection at the
company"s registered office.
CF Liebenberg Chairman TA Boardman Chief Executive
29 March 2004
Registered office: Transfer secretaries:
Nedcor Sandton Computershare Limited
135 Rivonia Road, Sandown, 70 Marshall Street,
2196 Johannesburg, 2001
PO Box 1144, Johannesburg, PO Box 1053, Johannesburg,
2000 2000
Directors:
CF Liebenberg (Chairman), WAM Clewlow (Deputy Chairman), Prof MM Katz (Vice-
chairman), TA Boardman (Chief Executive), CJW Ball, RG Cottrell, BE Davison, N
Dennis (British), Prof B Figaji, BJS Hore, MJ Levett, JB Magwaza, ME Mkwanazi,
DGS Muller, ML Ndlovu, PF Nhleko, TH Nyasulu, JVF Roberts (British), CML Savage,
JH Sutcliffe (British)
Company Secretary: WJ Kruger
NedBANK Limited
Reg No: 1951/000009/06
Share code: NBKP
ISIN code: ZAE000043667
2003 2002
Income statement Audited Restated
for the year ended 31 December Rm Rm
Interest income 28 609 15 824
Interest expense 22 600 11 644
Net interest income 6 009 4 180
Non-interest revenue 6 451 4 229
Foreign currency translation losses (1 058) (1 068)
Total income after foreign currency 11 402 7 341
translation losses
Impairment of advances 2 058
Specific and general provisions 1 347
Exceptional general provision reversed (400)
Income after impairment of advances 9 344 6 394
Operating expenses 9 415 5 828
Merger and reorganisation expenses 393 212
(Loss)/Profit from operations before (464) 354
exceptional items
Exceptional items (863) (1 478)
Capital loss on investment in Dimension (1 080)
Data
Amortisation of goodwill (90) (172)
Impairment of goodwill (280) (75)
Loss on sale of subsidiaries, investments (254) (22)
and property and equipment
Merger and reorganisation expenses (35)
Net impairment of investments and (239) (94)
property and equipment
Loss from operations (1 327) (1 124)
Attributable earnings of associates 119 142
Loss before taxation (1 208) (982)
Taxation 571 93
Taxation on merger and reorganisation (74) (29)
expenses
Taxation on exceptional items (38) (171)
Loss after taxation (1 667) (875)
Minority interest attributable to (125) (94)
ordinary shareholders
Loss attributable to ordinary (1 792) (969)
shareholders
Loss per share (cents) (6 725) (4 359)
Headline (loss)/earnings per share (3 629) 1 521
(cents)
Number of shares in issue (m) 26,8 22,8
Weighted average number of shares (m) 26,7 22,2
Number of preference shares in issue (m) 0,3 0,2
2003 2002
Headline earnings reconciliation Audited Restated
at 31 December Rm Rm
Loss attributable to ordinary (1 792) (969)
shareholders
Less: non-headline-earning items (825) (1 307)
Exceptional items (863) (1 478)
Taxation on exceptional items 38 171
Headline (loss)/earnings (967) 338
Headline earnings (excluding foreign 91 1 406
currency translation losses)
2003 2002
Balance sheet Audited Restated
at 31 December Rm Rm
Assets
Cash and short-term funds 11 716 9 699
Other short-term securities 8 802 7 780
Government and public sector securities 21 451 10 491
Derivative instruments 25 788 33 034
Advances 220 608 133 627
Sundry debtors 3 919 2 725
Deferred taxation asset 3 072 1 287
Current taxation prepaid 250 363
Investments in associate companies 1 471 1 310
Other investments 3 244 1 675
Property and equipment 2 596 2 161
Computer software and capitalised 1 654 1 552
development costs
Goodwill 416 335
Customers" indebtedness for acceptances 835 1 120
Total assets 305 822 207 159
Shareholders" equity and liabilities
Ordinary share capital 27 23
Ordinary share premium 10 054 2 681
Reserves 2 357 7 415
Ordinary shareholders" equity 12 438 10 119
Preference share capital and premium 2 802 1 987
Shareholders" equity 15 240 12 106
Minority shareholders" equity
Attributable to preference shareholders 122
Attributable to ordinary shareholders 686 364
Total shareholders" equity and minority 16 048 12 470
shareholders" equity
Deposits, current accounts and other 250 253 152 891
creditors
Derivative instruments 25 897 31 581
Deferred taxation liabilities 2 654 1 683
Current taxation liabilities 49 42
Long-term debt instruments 10 086 7 372
Liabilities under acceptances 835 1 120
Total shareholders" equity and 305 822 207 159
liabilities
AC133: Balance sheet classification
of financial instruments Assets Liabilities
at 31 December 2003 Rm Rm
Fair value 70 966 33 290
Held for trading 70 939 33 290
Available for sale 27
Amortised cost 234 856 256 484
Originated loans and receivables 225 545
Held to maturity 1 323
Non-trading liabilities 253 781
Other assets and liabilities 7 988 2 703
Shareholders" funds 16 048
305 822 305 822
AC133: reserve adjustments
at 31 December 2003 Rm
Distributable reserves
Impairment of advances (1 700)
Fair-value adjustments (970)
Taxation 795
Minority interest 1
Total adjustment to distributable reserves (1 874)
opening balance
Abridged cash flow statement 2003 2002
Audited Restated
for the year ended 31 December Rm Rm
Cash flows from operating activities 2 269 1 861
Cash received from clients 34 952 19 898
Cash paid to clients, employees and (31 489) (17 201)
suppliers
Dividends received 106
Ordinary dividends paid (1 167) (836)
Preference dividends paid (133)
Net increase in operating funds (7 096) (3 822)
Taxation paid (336) (641)
Net cash utilised in investing (3 715) (737)
activities
Net cash provided by financing 10 895 6 166
activities
Net proceeds of ordinary shares issued 7 377 635
Net proceeds of preference shares 815 1 987
issued
Increase in subordinated debt 2 703 3 544
Net increase in cash and short-term 2 017 2 827
funds
Cash and short-term funds at beginning 9 699 6 872
of year
Cash and short-term funds at end of 11 716 9 699
year
Statement of changes in shareholders" equity
for the year ended 31 December
Non- Pre-
Ordinary Ordinary distri- Distri- ference
share share butable butable share-
capital premium reserves reserves holders
Rm Rm Rm Rm Rm
Balance at
31 December 22 2 047 471 8 871
2001, as
previously
reported
Opening 109
adjustment
Balance at
31 December 22 2 047 471 8 980
2001, as
restated
Shares 1 635
issued
during the
year
Preference 2 000
shares
issued
Share issue (1) (13)
expenses
Loss for the (969)
year
attributable
to
shareholders
Transfer 53 (53)
to/(from)
reserves
Foreign (236)
currency
translation
Dividends to (836)
shareholders
Acquisitions
of
subsidiaries
Disposals of
subsidiaries
Other 5
Balance at
31 December 23 2 681 288 7 127 1 987
2002, as
restated
AC133 (1 874)
transitional
adjustments
Adjusted
balance at
1 January 23 2 681 288 5 253 1 987
2003
Shares 4 7 386
issued
during the
year
Preference 825
shares
issued
Share issue (13) (10)
expenses
Preference (133)
share
dividend
paid
Loss for the (1 792)
year
attributable
to
shareholders
Transfer (57) 57
(from)/to
reserves
Foreign (93)
currency
translation
Dividends to (1 167)
shareholders
Acquisition
of
subsidiaries
Other 1
Balance at
31 December 27 10 054 138 2 219 2 802
2003
Statement of changes in shareholders" equity
for the year ended 31 December
Minority interest
Pre- Total
Share- ference Ordinary share-
holders" share- share- holders"
equity holders holders equity
Rm Rm Rm Rm
Balance at
31 December 11 411 385 11 796
2001, as
previously
reported
Opening 109 109
adjustment
Balance at
31 December 11 520 385 11 905
2001, as
restated
Shares 636 636
issued
during the
year
Preference 2 000 2 000
shares
issued
Share issue (14) (14)
expenses
Loss for the (969) 94 (875)
year
attributable
to
shareholders
Transfer
to/(from)
reserves
Foreign (236) (236)
currency
translation
Dividends to (836) (836)
shareholders
Acquisitions (1) (1)
of
subsidiaries
Disposals of (135) (135)
subsidiaries
Other 5 21 26
Balance at
31 December 12 106 364 12 470
2002, as
restated
AC133 (1 874) (1 874)
transitional
adjustments
Adjusted
balance at
1 January 10 232 364 10 596
2003
Shares 7 390 7 390
issued
during the
year
Preference 825 825
shares
issued
Share issue (23) (23)
expenses
Preference (133) (133)
share
dividend
paid
Loss for the (1 792) 125 (1 667)
year
attributable
to
shareholders
Transfer
(from)/to
reserves
Foreign (93) (93)
currency
translation
Dividends to (1 167) (1 167)
shareholders
Acquisition 122 202 324
of
subsidiaries
Other 1 (5) (4)
Balance at
31 December 15 240 122 686 16 048
2003
Segmental analysis
2002
2003 Restated 2003
Total total Gross
average average operating
assets* assets* income
for the year ended 31 December Rbn Rbn Rm
Nedbank Corporate 133 121 6 063
Nedbank Capital 142 87 1 511
Imperial Bank 11 7 785
Retail and Wealth
Management 80 71 5 933
Peoples Bank 15 10 1 664
Shared Services 14 11 5 642
Capital Management and Central 35 25 (6 837)
Funding
Foreign currency losses, merger and (167) (103) (1 416)
reorganisation expenses and general
provision release
Total Nedcor Group 263 229 13 345
Fellow subsidiary adjustments (6) (83) (1 943)
Total Nedbank Group 257 146 11 402
* Excluding derivative instruments
Segmental analysis
2002
Restated 2002
gross 2003 Restated
operating Headline headline
income earnings earnings
for the year ended 31 December Rm Rm Rm
Nedbank Corporate 4 402 1 931 1 532
Nedbank Capital 1 347 359 542
Imperial Bank 507 116 82
Retail and Wealth
Management 5 497 564 719
Peoples Bank 1 076 20 302
Shared Services 4 435 (972) (581)
Capital Management and Central (4 487) (241) 866
Funding
Foreign currency losses, merger and (1 216) (1 722) (986)
reorganisation expenses and general
provision release
Total Nedcor Group 11 561 55 2 476
Fellow subsidiary adjustments (4 220) (1 022) (2 138)
Total Nedbank Group 7 341 (967) 338
* Excluding derivative instruments
Basis of preparation
Segment results are based on management results which are prepared on a Nedcor
group basis and include revenue, provisioning, expenses and taxes directly
attributable to a segment and the relevant portion of revenue and expenses that
can be allocated in a reasonable ratio to a segment, whether from external
transactions or transactions with other segments. Segment assets or liabilities
are based on average balances and comprise those operating assets and
liabilities that are directly attributable to a segment or can be allocated to a
segment on a reasonable basis. Fellow subsidiary adjustments to the segment
results relate to differences between the management results prepared on a
Nedcor group basis and the Nedbank group results.
Geographic - contribution 2003 2002
to headline earnings Audited Restated
as at 31 December Rm Rm
South Africa (422) 1 940
- South Africa - Operations 1 433 2 926
- Foreign currency losses, merger and
reorganisation expenses, general (1 722) (986)
provision release
- Preference share dividend paid (133)
Rest of Africa 198 272
Rest of world 279 264
Headline earnings per Nedcor Group 55 2 476
Fellow subsidiary adjustments (1 022) (2 138)
Headline (loss)/earnings per Nedbank (967) 338
Group
Income statement (Restated)
for the year Peoples Change in
ended 31 basis
December 2002
As Bank accounting
previously put relating
to
Rm reported option AC105/AC102
Interest income 16 048 (151)
Interest 11 514 130
expense
Net interest 4 534 (130) (151)
income
Non-interest 4 336
revenue
Foreign (863)
currency
translation
losses
Total income 8 007 (130) (151)
Specific and 1 658
general
provisions
Exceptional (400)
general
provision
reversed
Income after 6 749 (130) (151)
specific and
general
provisions
Operating 5 796
expenses
Merger and 212
reorganisation
expenses
Profit from 741 (130) (151)
operations
before
exceptional
items
Exceptional (1 478)
items
Loss from (737) (130) (151)
operations
Attributable 142
earnings of
associates
Loss before (595) (130) (151)
taxation
Taxation 241 (151)
Taxation on (29)
merger and
reorganisation
expenses
Taxation on (171)
exceptional
items
Loss after (636) (130) -
taxation
Minority (224) 130
interest
attributable to
ordinary
shareholders
Loss (860) - -
attributable to
shareholders
Adjusted for:
Exceptional 1 478
items
Taxation on (171)
exceptional
items
Headline 447 - -
earnings
Income statement (Restated)
for the year Historical Prior- Prior-
ended 31 year
December 2002
currency year losses
on
translation debit Business
Rm gains items Banking Restated
book
Interest income (256) 183 15 824
Interest 11 644
expense
Net interest (256) 183 - 4 180
income
Non-interest (115) 8 4 229
revenue
Foreign (205) (1 068)
currency
translation
losses
Total income (576) 191 - 7 341
Specific and (35) (276) 1 347
general
provisions
Exceptional (400)
general
provision
reversed
Income after (576) 226 276 6 394
specific and
general
provisions
Operating 82 (50) 5 828
expenses
Merger and 212
reorganisation
expenses
Profit from (658) 276 276 354
operations
before
exceptional
items
Exceptional (1 478)
items
Loss from (658) 276 276 (1 124)
operations
Attributable 142
earnings of
associates
Loss before (658) 276 276 (982)
taxation
Taxation (48) (32) 83 93
Taxation on (29)
merger and
reorganisation
expenses
Taxation on (171)
exceptional
items
Loss after (610) 308 193 (875)
taxation
Minority (94)
interest
attributable to
ordinary
shareholders
Loss (610) 308 193 (969)
attributable to
shareholders
Adjusted for:
Exceptional 1 478
items
Taxation on (171)
exceptional
items
Headline (610) 308 193 338
earnings
This and additional information is available on our website:
www.nedcor.com
Date: 31/03/2004 11:39:35 AM Produced by the JSE SENS Department
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