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UNAUDITED INTERIM RESULTS for the SIX MONTHS ENDED 30 JUNE 2021 Contents

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UNAUDITED INTERIM RESULTS for the SIX MONTHS ENDED 30 JUNE 2021 Contents UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2021 Contents MESSAGE FROM OUR 01 CHIEF EXECUTIVE INTERIM RESULTS 02 PRESENTATION 2021 INTERIM RESULTS 40 COMMENTARY FINANCIAL 54 RESULTS STATEMENT OF FINANCIAL 55 Financial highlights POSITION ANALYSIS 56 Consolidated statement 117 of comprehensive income 57 Consolidated statement 118 Loans and advances of financial position 136 Investment securities 58 Consolidated statement 137 Investments in associate of changes in equity companies 62 Return-on-equity drivers 138 Intangible assets 140 Amounts owed to depositors SEGMENTAL 142 Liquidity risk and funding 65 ANALYSIS 145 Equity analysis 146 Capital management 66 Our organisational structure, products and services 68 Operational segmental SUPPLEMENTARY reporting 152 INFORMATION 70 Nedbank Corporate and Investment Banking 153 Earnings per share and 74 Nedbank Retail and Business weighted-average shares Banking 154 Nedbank Group employee 88 Nedbank Wealth incentive schemes 92 Nedbank Africa Regions 155 Long-term debt instruments 96 Geographical segmental 156 Additional tier 1 capital reporting instruments 156 External credit ratings INCOME STATEMENT 157 Shareholders’ analysis 98 ANALYSIS 158 Basel III balance sheet credit exposure by business cluster 99 Net margin analysis and asset class 102 Impairments 160 Nedbank Limited consolidated statement of comprehensive 110 Non-interest revenue income 112 Expenses 161 Nedbank Limited consolidated 114 Headline earnings reconciliation statement of financial position 114 Taxation charge 162 Nedbank Limited consolidated 115 Preference shares financial highlights 163 Definitions 166 Abbreviations and acronyms IBC Company details Nedbank Group Unaudited Interim Results 2021 MESSAGE FROM RESULTS RESULTS FINANCIAL SEGMENTAL INCOME STATEMENT SUPPLEMENTARY OUR CHIEF PRESENTATION COMMENTARY RESULTS ANALYSIS STATEMENT OF FINANCIAL INFORMATION EXECUTIVE ANALYSIS POSITION ANALYSIS Strong performance in H1 2021 Operating conditions in the first half of increased as reflected in our tier 1 capital ratio on our strategy and the group’s financial 2021 were better than we expected at the of 13,6% (Dec 2020: 12,1%), CET1 ratio of 12,2% performance in H1 2021, our current guidance start of the year. This was evident in upward (Dec 2020: 10,9%), average second-quarter on financial performance for the full-year revisions to GDP growth, vaccine rollouts LCR of 131% (Dec 2020: 126%) and NSFR of 2021 is to grow HEPS and EPS by more gathering pace and positive developments on 114% (Dec 2020: 113%). Overall impairment than 20%. Our medium-term targets* key reforms in SA. A 53-year low in interest coverage improved to multi-year highs of remain unchanged, as we aim to exceed our rates supported robust demand for retail 3,41% (Dec 2020: 3,25%) and we increased our 2019 diluted HEPS level of 2 565 cents, achieve credit, while transactional activity increased judgemental Covid-19 and macroeconomic an ROE greater than the 2019 ROE level of off a low base and benefited from ongoing overlays to R4,5bn (Dec 2020: R3,9bn). 15%, reduce our cost-to-income ratio to below strong digital growth. Against this progress, 54%, and rank number one on the NPS among We remain well prepared to manage risks demand for corporate loans remained muted South African banks by end 2023. associated with the impact of the third and excess cash was used to repay debt, wave of Covid-19 infections, which appears We thank all our committed Nedbank particularly in the commodity sector. The third to have passed its peak, the effect of the employees for remaining resilient during wave of Covid-19 infections in SA led to the higher-than-expected lockdown restrictions an extraordinarily difficult time, and for government imposing stricter adjusted level during the third wave of infections and helping continuing to follow the Covid-19 health 4 lockdowns towards the end of June. More our clients deal with the residual impact of protocols while diligently supporting our recently, civil unrest in parts of Gauteng and recent civil unrest in parts of SA. clients and the economy throughout the KwaZulu-Natal is expected to negatively Covid-19 crisis as well as the recent unrest impact economic growth, with damage to Nedbank Group’s HE in H1 2021 increased by in KwaZulu-Natal and parts of Gauteng. physical assets, temporary interruptions of 148% on H1 2020 to R5,3bn, but remains 24% We extend our deepest condolences to supply chains and many people left without below H1 2019 levels. HE growth benefited the families, friends and communities of an income. Law and order and the protection from significantly lower impairments, higher employees and clients who have lost their of citizens and their assets are foundations for net interest margin and disciplined expense loved ones during this time. democracy, investment and economic activity, management. Underlying NIR was strong, and it is important that steps are urgently put due mainly to higher levels of client activity in place to prevent any recurrence and that and strong insurance income, but this Mike Brown those responsible are held accountable. It has growth was negatively impacted by a high Chief Executive been encouraging to see images of a united H1 2020 trading revenue base and an unwind SA replace images of unrest and violence. of the prior-year fair-value gains. Key drivers Thousands of South Africans joined clean-up of shareholder value creation also showed efforts, distributed food to communities in positive trends, with net asset value per need, and generally spread a message of share up 8% yoy, the group’s ROE increasing positivity and togetherness. Nedbank has to 11,7% (H1 2020: 4,8%) and our resumption joined these efforts and has positioned our of dividend payments, declaring an interim support in a manner that will maximise the dividend of 433 cents per share. value we can provide to the country, in line with our purpose: to use our financial expertise to Forecasting remains difficult in a volatile do good. environment, but after lifting 2021 GDP forecasts to 5,0%, we currently expect the The Nedbank Group’s financial performance in country's GDP to increase by 4,2% in 2021, the first half of 2021 reflects a strong financial taking into account the estimated 0,4% recovery off a low base, and key resilience impact of recent civil unrest in addition metrics have all strengthened to above to the 0,4% impact from the move to pre-crisis levels. Capital and liquidity ratios adjusted level 4 lockdown. Given progress HEADLINE EARNINGS CLR ROE CET1 RATIO 148% 85 bps 11,7% 12,2% 161 11,7 10,9 12,2 187 6,2 10,6 2 114 4,8 5 251 85 H1 2020 H1 2021 H1 2020 2020 H1 2021 H1 2020 2020 H1 2021 H1 2020 2020 H1 2021 * These targets are not profit forecasts and have not been reviewed or reported on by the group’s joint auditors. Nedbank Group Unaudited Interim Results 2021 1 Nedbank Group Interim Results for the six months ended 30 June 2021 NEDBANK GROUP LIMITED – Interim Results 2021 1 NOTES: OVERVIEW Strong ▪ Key resilience metrics above performance in H1 pre-crisis levels 2021, helped by a ▪ HE +148% to R5,3bn, driven more supportive by a significant improvement economic in impairments environment ▪ Good strategic progress Mike Brown Chief Executive NEDBANK GROUP LIMITED – Interim Results 2021 2 NOTES: 2 Nedbank Group Unaudited Interim Results 2021 MESSAGE FROM RESULTS RESULTS FINANCIAL SEGMENTAL INCOME STATEMENT SUPPLEMENTARY OUR CHIEF PRESENTATION COMMENTARY RESULTS ANALYSIS STATEMENT OF FINANCIAL INFORMATION EXECUTIVE ANALYSIS POSITION ANALYSIS Overview ▪ A more supportive environment in H1 2021 ‒ GDP growth improving off a low base (2020: -7,0% decline | 2021 forecast: 4,2% growth) ‒ More severe third wave of Covid-19 infections, but lockdown levels more supportive ‒ Muted demand for corporate credit & excess cash being used to repay debt ‒ Robust demand for retail credit as clients benefit from lower interest rates ‒ Recovery of transactional activity off a low base – ongoing strong growth in digital ‒ Civil unrest in July 2021 likely to reduce 2021 GDP growth by 0,4% & introduction of adjusted lockdown level 4 by a further 0,4%; previous forecast 5,0% reduced to 4,2% ▪ Key resilience metrics above pre-crisis levels & solid financial recovery off a low base ‒ CET1 (12,2%), LCR (131%) & NSFR (114%) all above pre-crisis (2019) levels ‒ Total coverage (3,41%) at multi-year high & central overlays increased to R4,5bn (Dec 20: R3,9bn) ‒ HE growth of 148% to R5,3bn, driven by significantly lower impairments, widening NIM & expense discipline ‒ Dividend payments resumed ▪ Good ongoing strategic progress ‒ Market share gains in key product areas, ongoing main-banked client growth, productivity improvement & excellent risk & capital management NEDBANK GROUP LIMITED – Interim Results 2021 3 NOTES: Operating environment – SA heading towards the end of a third wave of Covid-19 infections, with lockdown levels less stringent than in the first wave SA positive Covid-19 cases Stringency index1 (7-day average) 25 000 100 20 000 75 15 000 50 10 000 25 5 000 0 0 Mar 20 Jun 20 Sep 20 Dec 20 Mar 21 Jun 21 Mar 20 Jun 20 Sep 20 Dec 20 Mar 21 Jun 21 Brazil South Africa Turkey India 1 Oxford University NEDBANK GROUP LIMITED – Interim Results 2021 4 NOTES: Nedbank Group Unaudited Interim Results 2021 3 Operating environment – vaccine rollout gathering pace BOOKLET SLIDE SA vaccination plan Vaccine rollout (‘000 doses administered) Sisonke Pfizer J&J Other 0,3% 0,5% 1,8% 5,1% 12,7% study rollout rollout rollout started* started** TBC 7 545 Apr May Jun Jul Aug Sep 3 026 Healthcare 50+ years 18+ years workers of age of age 1 045 193 318 60+ years of age 35+ years Up to Apr May Jun Jul & healthcare workers of age Mar 21 21 21 21 21 % of population vaccinated with at least one dose * SA Vaccination plan: Pfizer: 38m by end-2021 (2 doses required) & ** J&J :31m by end-2021 (1 dose required) | 7,4% of population fully vaccinated at 31 July 2021.
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