ANNUAL REPORT 2004 - Nedbank...Financial Highlights for the year ended 31 December 2004 ANNUAL REPORT 2004 02 Cost to Income 00 01 02 03 04 93.2 83.2 71.7 71.7 67.1 Net Income before

ANNUAL REPORT 2004

Vision

To be the leading Bank, in Swaziland, with which everyone aspires to associate.

Mission

Our Mission is to be a highly focused and client centered organization, through:

offering differentiated financial services and customised products to viable segments

using appropriate processes and channels

applying best practice Corporate Governance Principles

creating value through constant innovation & reinvestment

building sustainable relationships with all stakeholders.

Contents PageFinancial Highlights 1-2

Profile & Group Structure 3

Chairman’s Statement 4-6

Board of Directors 7-8

Managing Director’s Review 9-10

Corporate Governance 11-14

Corporate Social Investment 15

Economic Overview 16

Remuneration Report 17

Risk Management 18-20

Chief Financial Officer’s Review 21-23

Annual Financial Statements 24-56

2004 2003 %

E’000 E’000 growth

Profit after tax decreased by 5%

Head lines earnings per share declined by 5%

Total assets grew by 9%

The same dividend per share of 17.5 cents was declared

Key Balance Sheet Items

Shareholders funds 77,836 62,825 24

Deposits, current and other accounts 674,309 630,123 7

Cash and short-term funds 63,545 95,286 -33

Government and public sector security 64,073 44,625 1335

Advances and other accounts 495,269 373,928 32

Group companies 13,826 15,281 -10

Total assets 752,145 692,948 9

Key Income Statement Items

Total income 76,330 72,583 5

Expenses 51,477 52,051 -1

Net income before tax 24,846 26,349 -6

Taxation 7,082 7,616 7

Net income after taxation 17,764 18,733 -5

Other Income Statement Items Cents Cents

Earnings per share (cents) 74.5 78.5 -5

Headline earnings per share (cents) 74.5 78.5 -5

Dividend per share (cents) 17.5 17.5 0

Selected Ratios % %

Return on average shareholders funds 22.8 29.8

Return on average assets 2.5 2.7

Efficiency ratio (cost to total income) 67.2 71.7

Non interest revenue to total income 52.5 44.8

Effective tax rate 28.5 28.9

ANNUAL REPORT 200401

Financial Highlightsfor the year ended 31 December 2004

Financial Highlightsfor the year ended 31 December 2004

ANNUAL REPORT 2004 02

Cost to Income

00 01 02 03 04

93.2

83.2

71.7 71.7 67.1

Net Income before Taxation

00 01 02 03 04

4,79

5

6,83

6

16,3

85

26,3

49

24,8

45

Earnings per Share

00 01 02 03 04

12.6

6 18.8

6

48.0

7

78.5

1

74.5

1

Total Income

00 01 02 03 04

44.0

41.3

59.9

72.6

76.3

Assets

16.4%

Other Banks

Liabilities

22.8%

Other Banks

Shareholders’ Funds

00 01 02 03 04

32.3 36

.2

46.5

62.8

77.8

Market Share 2004

Profile & Group Structureas at January 2005


Nedbank Profile

Nedbank Swaziland Limited is a registered commercial bank in

Swaziland, with its Head Office situated at the Nedbank Centre,

Swazi Plaza, Mbabane. It is a subsidiary of Nedbank Limited, a

South African company under the Nedcor Group of Companies.

Within Nedbank Limited, Nedbank (Swaziland) Limited falls

under the Nedbank Africa Division, which in turn, is a unit of

the Nedbank Corporate cluster.

The Bank has six branches and one agency in selected locations

around the country. Nedbank offers a wide range of banking

products, ranging from Business banking to Personal banking.

These are delivered through a variety of service delivery channels,

ranging from traditional to electronic banking.

Nedbank Limited

Nedbank Corporate

Nedcor

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Nedbank Africa

Nedbank (Swaziland) Limited

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Chairman’s Statement

The past year continued to pose serious challenges to the financial

markets as well as the banking sector. These challenges were charac-

terized by the drop in interest rates, the strengthening of the

lilangeni/rand against world major currencies, particularly the US

Dollar. Nedbank Swaziland under the leadership of Ambrose Dlamini,

focused on ensuring that the bank is correctly aligned in order to

achieve greater shareholder value.

The Economy

Swaziland’s economic performance experienced some decline evidenced

by Gross Domestic Product (GDP) dropping from 2.9% in 2003 to

2.1% in the year under review. There was minimal Foreign Direct

Investment. The manufacturing sector performance was weak and

agricultural activity slowed down. The sustained strength of the

Lilangeni/Rand had a marked effect on the export industry and as

a result a lot of doubt was cast on the future of export-based companies.

Unemployment and the HIV/AIDS pandemic continued to affect

the country.

On the positive side, Swaziland maintained it’s qualification to derive

benefit on the Africa Growth and Opportunity Act (AGOA), which

guarantees access to the United States markets and by extension

there would be increased employment opportunities for Swaziland.

Politically, progress was made on restoring confidence in the rule of

law in the country. The main challenge, though, remains in the

country’s ability to attract and retain foreign direct investment.

The Banking Industry

The competition within the industry remained intense with new

players now focusing on commercial banking and non-regulated

finance providers all competing in the same space especially in

corporate, private banking, and the retail banking market amidst the

economic downturn. It was a welcome relief when the Regulator

announced the intention to introduce the regulation of non-financial

Institutions, a development we welcome and hope will be fast tracked

by the legislators.

Risk Management as a whole underpinned the core success of the

Bank having as its backbone the core principles of good governance.

The progress made by the Regulator in ensuring that a sound legal

framework that encompasses sound corporate governance exists

cannot go unnoticed.

The vicious cycle of the strong lilangeni, declining inflation and low

interest rates has put a strain on the industry. However the outlook

for 2005 remains optimistic and one can only hope when the reverse

happens the consumer is not adversely affected. Whilst lower interest

rates should help ease bad debt, the real danger is the one of interest

rates increasing which will have a negative impact on asset growth

and consumer credit.

Public trust, transparency and confidence remain the cornerstone of

a sound and successful service industry. Our client needs are critical

to us as a bank; we however advocate that they are carried out in a


way that provides fair reward to shareholders, satisfying the development

of the staff and upliftment to the community in a socially responsible

manner.

Outlook

The outlook for 2005 appears positive, the focus being on meeting

the demands of clients. The economy is expected to perform at the

same levels. With declining interest rates, the belief is that consumer

demand should increase. On the political front, one is optimistic

that it will improve with the passing and implementation of the

Constitution.

Results

Given the current challenging market conditions it gives me great

pleasure to present fairly good results indicating a growth of 32.5%

in loans and advances and an increase in the net interest revenue

of 14.5%.

The decline of headline earnings from E18, 733,247 to E17, 763,893

a 5% drop was as a result of the reduction in interest rates during

the year. The impact was felt mainly on the free funds due to the

rate reduction thus causing margin compression. The impact of the

AC133 adjustment taken in fully in 2003 also played a part in the

reduction of headline earnings. Despite this, operationally the bank

performed better than the previous year.

Board Changes

The corporate governance dictates necessitated certain changes on

the Board, which had the effect of increasing the Board from seven

to nine members. As a result, the constitution is reflective of a

majority of Directors being non- executive with a sufficient number

being independent non-executive. With the recent governance

developments and the level of activities required of non-executive

directors in particular, a real challenge is posed for relatively small

boards who are expected to govern modern and complex banking

organizations according to the expected standards of stakeholders

and Regulators.

During the year, due to the various changes within Nedbank Limited

we took leave of S.M Pityana and CM Drew. Our deep appreciation

goes out to these Directors for their loyal service, constructive

contribution and strategic guidance in the business, in the time they

have been with the bank.

As part of the alignment with good governance principles and ensuring

that the majority of board member are non-executive and a sufficient

number being independent non-executive, we welcomed C.N Mamba,

S.E Matsebula and M.C Nkuhlu onto the Board of Directors. During

the short period they have been directors we have already benefited

from their experience and wise counsel.

Appreciation

As previously stated this year has been a difficult one with all the

challenges particularly on the management. On behalf of the Board

I would like to extend my thanks and congratulations to the Managing

Director and his management team for the manner in which they

dealt with issues and tackled them in order to deliver these results,

particularly the leadership displayed by Ambrose in dealing with

these issues.

In a regulated industry such as financial services much reliance is

placed on the support and cooperation of Regulators in the smooth

execution of all activities. We would like to extend our appreciation

for the manner and professional efficiency with which the Regulators

dealt with issues affecting operations of the business.

Chairman’s Statement(continued)


To my fellow directors, I would like to pass my sincere gratitude for

your continued support, time, wise counsel and guidance, ultimately

making the execution of my duties much easier.

Finally, my sincerest gratitude is extended to our shareholders,

stakeholders, associates and clients who continue to demonstrate

their support, goodwill and belief in the company.

Z M Nkosi

Chairman


Chairman’s Statement(continued)

Board of Directors

1 2 3

4 5

6 7

8 9

10


1. Zacheus Mandlakayise Nkosi (68)

(Non Executive Chairman)

Business Address: Swaziland Cane Growers

Association,Shukela House, Dzeliwe Street, Mba-

bane.

Qualifications : BA (Rhodes)

Zakes is presently the Executive Director of The

Swaziland Cane Growers Association. He has

previously worked for the Swaziland Government

in various positions in various departments, the

highest post in which he served was that of acting

Permanent Secretary in the Ministry of Industry

Mines and Tourism. After leaving Government he

served as Assistant General Manager, Swaki Invest-

ment Corporation. He also served as Managing

Director of Swaziland Milling a Division of Swaki

and Managing Director for International Division

of Swaki. He later served as an Executive Director

of M & N Agencies (Pty) Ltd.

Nedbank (Swaziland) shares: 1000

2. Ambrose Mandulo Dlamini (37)

(Managing Director)

Business Address : Nedbank Centre, Swazi

Plaza, MbabaneQualifications : B.Com (UNISWA)

MBA (Hampton University (USA)

Chartered Marketer (IMM South Africa)

Ambrose is presently the Managing Director of

Nedbank (Swaziland) Limited and prior to his ap-

pointment as Managing Director, he has held the

post of Head: Retail Banking and Marketing for the

same Bank. He previously worked for ABSA Bank

Johannesburg as an SME Manager; Manager Strategy

and later as a Franchise Financing Manager. Before

joining Nedbank (Swaziland) Limited Ambrose

worked for Standard Bank South Africa, Johannes-

burg as a Management Consultant.11

3. Simon Madlavana Pefile (69)

(Independent Non Executive Director)

Business Address: Swaziland Brewers, Matsapha

Qualifications: B.Sc (Applied Chemistry) Coventry

Polytechnic, UK.

M.Sc (Industrial Chemistry) Columbia Pacific Uni-

versity.

Ph.D (Business Management) Columbia Pacific

University.

Simon is currently Chairman of the Swaziland

Brewers Group after having served as the Managing

Director of Swaziland Brewers and holding various

General Management positions within the Group.

He also worked in managerial positions for a number

of reputable organizations such as the National

Industrial Development Corporation, Swaziland

Business Growth Trust, The Small Enterprises

Development Corporation, Swaziland National

Trust Commission, and Usuthu Pulp Company (now

SAPPI).

Nedbank (Swaziland) shares: 25850

4. Ndumiso Comfort Mamba (43)

(Independent Non-Executive Director)

Business Address : Lomawa House, Lozitha

Qualifications : B.A (Law) (Hons)

Barrister at Law

LLM Law (Hons)

Ndumiso is currently the Managing Director of

Tibiyo TakaNgwane. He has previously practiced

as a Barrister in a set of Chambers, Paper Buildings,

Temple London and also worked as Crown Counsel

with the Director of Public Prosecution’s Chambers

in Mbabane. Before his appointment he was General

Manager for the same institution.

5. Siphiwe Ethel Matsebula (52)

(Non-Executive Director)

Business Address :

Qualifications : GCE ‘O’ Level – 1970

Siphiwe is presently operating a business dealing

with SMEs offering business counseling services,

training, preparation of business plans, cash flow

projections and bankable business proposals. She

also runs a business dealing with stationery, cleaning

material and protective clothing. Prior to embarking

on her businesses, she was employed in various posts

with Barclays Bank of Swaziland Limited, later

Standard Bank Swaziland Limited.

6. Christopher John Pearce (61)

(Non-Executive Director)

Business Address : Nedcor, 135 Rivonia Road,

Sandton

Qualifications : B.Com

Chartered Accountant (SA)

AMP Harvard

At the time of his retirement in 2003 Chris was

serving as a Divisional Director of Nedcor Limited.

As a Chartered Accountant he served his articles

with Alex Aiken & Carter now known as KPMG.

He has held various managerial positions within

UAL Merchant Bank and held the position of

Managing Director from 1995 to 1997. He joined

the Nedcor Group in 1997 when he was appointed

Managing Director of Nedcor Investment Bank

Holdings.

7. Ernest Michael Davidson (51)

(Executive Director)

Business Address : Nedcor Park 1, Selby

Qualifications : MDP (Stelenbosch University)

MDP (UNISA)

AEP (UNISA)

Ernest is the General Manager: Group Technology

& Support Services (ASP Central Management)

and has previously worked in various divisions within

the Nedcor Group. He has worked as Regional

Operations Manager East Gauteng Region, Assistant

General Manager Operations, Retail Manager,

Commercial Manager, Services Manager West

Gauteng, Senior Manager Asset Based Finance,

Senior Manager Home Loans, Assistant General

Manager Operations and Regional Operations Man-

ager, East Gauteng.

8. Colin Mark Drew (42) (Executive Director)

Business Address : Nedcor 135 Rivonia Road.

Qualifications : Bachelor of Commerce (Natal)

LLB( Natal)

Post Graduate Diploma in Accountancy

Master of Laws (Mercantile) (Unisa)

Chartered Accountant SA

Attorney of the High Court of South Africa

Colin is General Manager Nedbank Africa prior to

this appointment he served as Divisional Director:

Corporate Finance, and as General Manager for the

same Division. He has also worked for various

reputable organisations such as Brait Merchant

Bank, Real Africa Durolink, Anglo American Plat-

inum Corporation, Group Five, Webber Wentzel

Bowens and Ernst & Young.

9. Mfundo Clement Nkuhlu (39) (Executive Director)


SandtonQualifications : BA (HONS) UWC

Mfundo is the Divisional Director for Nedbank

Africa with executive responsibility to manage

operations in Nedbank Limited subsidiaries and

associate entities. Previously to joining Nedbank

he was the General Manager Strategy and Planning

with the South African Revenue Services and prior

to that, he held various positions within the De-

partment of Trade and Industry in South Africa.

10. Sipho Mila Pityana (Executive Director)


Sandton

Qualifications : MSc in Politics and Sociology

(University of London) (Part time)

BA (Hon) (University of Essex)

Sipho has worked as a Senior Researcher, Interna-

tional Defence and Aid Fund, Director/Coordinator,

Nelson Mandela International Reception Commit-

tee, Deputy Director/Senior Researcher, Community

Agency for Social Enquiry, Registrar (Academic),

Fort Hare University and later Special Assistant to

the Vice Chancellor of the same university. He has

also worked as a Chief Executive Officer : Workman’s

Compensation Fund, Chief Executive Officer, Un-

employment Insurance Fund, Director General,

Department of Labour and presently Managing

Director, Nedbank Corporate.

11. Bathobile Mvubu (32)

(Company Secretary/Head of Compliance)

Business Address : Nedbank Centre, Swazi

Plaza, MbabaneQualifications : BA Law (UNISWA)

LLB (Rhodes) - Attorney of the High Court of

Swaziland

Bathobile is the Company Secretary and Head

of Compliance in Nedbank Swaziland. She

previously worked as a Professional Assistant

for Attorneys Millin & Currie where she also

served her articles, prior to her appointment as

Company Secretary at Nedbank (Swaziland)

Ltd .

Board of Directors


Industry Overview

The year 2004 was yet another year in which the competition further

heightened in the banking industry. Commercial banks in Swaziland,

continued to aggressively promote their client value propositions in

a bid to win more market share, while aiming at maximising shareholder

value. Banks in the industry were further subjected to very strenuous

conditions as interest rates were reduced down to 11% from 16% in

prior year, while having to reckon with a strengthening Lilangeni/Rand.

Decline in the economy, as characterised by escalating unemployment

and rampant retrenchments, further worsened the situation. 2004

also saw an increase in regulatory requirements by both the Central

Bank of Swaziland and the Reserve Bank of South Africa.

The Bank’s strategic focus

Towards the end of the year, Nedbank went through a strategic

planning session for the next three years. It was in this session that

the Bank’s strategy of putting the client at the centre of its reason

for existence was re-iterated. It is in this background that the Bank

continually rededicates itself to being a client-focused financial

institution. Underlying the corporate strategy are the Bank’s core

values: professionalism, integrity, trust, respect and team work.

Technology continues to be a critical success factor of the business.

The Bank’s structure has been set up to optimally service the Bank’s

varied clients. Consequently the Bank is able to offer a full range of

banking services to corporate, commercial, SME, and retail clients.

An experienced team offers a wide range of Treasury and Foreign

Exchange products and services to the different segments.

Financial Results for the year

Despite the harsh and challenging economic realities that prevailed

in 2004, the Bank was still able to make a healthy Net Income after

Tax of E17,763,893. However, compared to 2003, this marked a

decrease of 5% in core earnings. Non–interest revenue grew by 23.7%

as a result of an increase in net income from exchange and securities

dealings, commissions and service fees. Improved selling strategies

have seen to the growth of the loans and advances by 32.5% in

particular the mortgages and lease products. This growth has contrib-

uted significantly to the overall growth of the balance sheet by 9%.

The Bank’s headline earnings were impacted by substantial decline

in net interest income and loss of some big corporate clients. A

detailed coverage of the Bank’s financial performance can be seen

in the Chief Financial Officer’s review in pages 21-23.

Operational performance

The Bank introduced some key products and/or services during the

year, and these included: -

A re-engineered Asset Based Finance product

Netbank – an Internet banking channel for both corporate

and retail clients

A Brokerage strategic partnership on ABF

The Bank experienced a decline in net interest margins, as declining

Managing Director’s Review


interest rates and increasing competition continue to put pressure on

already thin corporate lending margins.

In line with the Bank’s strategic plan to bring the expenses-to-income

ratio down to within the 60 – 65% by 2006, the Bank has been able

to bring its cost to income ratio down to 67.7%, further demonstrating

the Bank’s resolve to achieve this target. A continued reduction of

the cost-to-income ratio will be assisted by innovations such as

automation of carefully selected processes, a stand-alone treasury

department, and a unit dedicated to global trade and a centralised

processing department.

People

I am pleased to acknowledge that the Bank’s strength lies in the

skills, commitment and loyalty of the staff. At Nedbank we have a

dedicated team that works hard and displays a lot of passion in its

resolve to make Nedbank a leading Bank in the country. Continued

re-organisation and introduction of appropriate remuneration policies,

among other things, will contribute immensely in achieving an even

higher degree of convergence of purpose amongst the staff.

Conclusion

I would like to take this opportunity to thank the Board and Executive

Management at Africa Division, for all the support they have given

me and the Nedbank Swaziland team in 2004. It is my hope, though,

that such support will continue in the ensuing year. I wish to express

my personal thanks to the executive directors who retired during

2004, Colin Drew and Sipho Pityana for their contribution to the

Bank .

A.M. Dlamini

Managing Director

Managing Director’s Review(continued)


Sound governance policies and objectives form the backbone of

developing and sustaining a successful business. “Corporate Governance

can, in part, be viewed as a company’s strategic response to the need to

assume prudent risks, appropriately mitigated in exchange for measurable

rewards” Arthur Levitt, Risk Management.

The board and management of Nedbank Swaziland continues to take

responsibility for providing strategic direction, ensuring objectives

are achieved, ascertaining that risks are managed appropriately and

ensuring that organizational resources are used responsibly and

effectively.

One of the key objectives of the Board is to ensure that there is

conformance to the principles of good governance without neglecting

the overall performance of the Bank.

CORPORATE GOVERNANCE STRATEGY

The Company Secretary has been tasked with corporate governance

responsibilities, including the implementation of the recommendations

of the King II Report and the promotion of a culture of good

governance. The Company Secretary has a dual reporting line and

reports directly to the Chairman on aspects related to board governance,

and directly to the Managing Director on operational issues. The

role of the Company Secretary in championing corporate governance

is to:

Internal Audit and Compliance perform two key internal assurance

functions within the corporate governance system.

Internal Audit

Internal Audit performs an independent monitoring function that

gives assurance to the Board and Management on the effectiveness

of the internal control, risk management and compliance environment

within the Bank. Internal Audit in Swaziland is supported by Nedcor

Group Internal Audit from Nedbank Limited.

Internal Audit has direct access to the Chairman of the Audit, Risk

and Compliance Committee (ARC). Operationally the Head of

Internal Audit reports through to the Managing Director to ensure

integration of the audit, and the risk management functions.

Compliance

The Compliance department is an independent function, whose

responsibility is to manage regulatory and reputational risk, and has

unrestricted access to the Chairman of the ARC, Managing Director

and Chairman of the Board. To create a specific focus on Compliance,

the board resolved that the Committee’s name and Charter be

amended to include the Compliance aspect. Consequently, the name

Audit Committee was changed to Audit, Risk and Compliance

Committee, and the Charter was up-dated accordingly.

Corporate Governance


The Group Compliance function plays an integral role in terms of

support, guidance and monitoring, to ensure that the proper assurance

is given to the Board on the levels of regulatory compliance. The

Chief Compliance officer reports formally to the ARC on a regular

basis. It is the Compliance Officer’s role, among others, to provide

guidance, assess, monitor and report on the following:

In the past year the Compliance function was formally constituted

and an operating framework was developed. A formal charter is in

place to regulate the functions of Compliance. The Group Compliance

Division has been established, and Compliance Champions appointed

in each Division across the Bank. These officers have dual reporting

lines to the Heads of the Divisions and to the Chief Compliance

Officer for purposes of ensuring independence and objectivity in

managing compliance risks.

Revised Board Committees

Board Committees have been established to assist the Board in the

discharge of its responsibilities.

Three Board Committees have been established with formal written

charters. New committees introduced include the Remuneration and

Nominations Committee, whose responsibility includes setting

remuneration policy in the Bank, evaluation of candidates for

appointment as Directors, Board Succession, Board and individual

director evaluation.

The Audit Committee has also been combined and now includes

matters of Compliance and Risk. The Charters reflect the changes.

The Loan Review Committee has also been fully operational.

The Board is satisfied that the Committees effectively assisted the

Board in discharging their duties and responsibilities.

Formalized Corporate Governance Objectives

The Board has formalized its Corporate Governance Objectives,

which it assesses and reviews annually and documents whether the

process of corporate governance implemented by the bank successfully

achieves these objectives.

The Board fully subscribes to the King II report and is already in

substantial compliance with the code. The areas where the board is

not compliant are receiving its attention.

The Board Of Directors

The Board has a unitary board structure comprising nine Directors,

of which two are independent non-executive, and three are non-

executive.

The Directors come from diverse backgrounds and bring to the Board

a wide range of expertise. The composition of the Board provides for

independent and objective judgment in the decision making process

and ensures that no one individual has unfettered powers of decision

and authority.

Directors are not given a fixed term of appointment, subject to the

proviso that they retire every three years, but may offer themselves

for re-election, while executive directors are subject to short-term

notice periods. In line with the Board Charter, an executive director

is required to retire from the Board at the age of 60, while a non-

executive Director retires at age 70. Re-appointment of non-executive

directors is not automatic.

The Board has formal written terms of reference that have adopted

the requirements of best practice and King II. The main functions

of the Board are to: -

Corporate Governance(continued)

12ANNUAL REPORT 2004

The Board has fully taken the responsibility for setting the strategic

direction of the Bank together with the Executive Team.

Chairman and Managing Director

The roles of the Chairman and the Managing Director are separate.

The Chairman, Z.M Nkosi, presently leads the Board and the executive

management is the responsibility of the Managing Director, A. M

Dlamini.

Company Secretary

All Directors have access to the advice and services of the Company

Secretary who is responsible for ensuring that Board procedures and

applicable rules and regulations are observed.

New Directors are informed of their duties and responsibilities by

way of an induction course covering board effectiveness, corporate

governance, risk management and other banking technical information.

Record of Attendance at Board and Board Committee Meetings for Nedbank Swaziland Ltd for 2003:

The Board and Board Committees in total met 15 times in the year. This does not include meetings done for purposes of Board training.


13 ANNUAL REPORT 2004

Name Board Audit, Risk & Loan Review Remunerations &

Compliance Committee Nominations

No. of Meetings 4 5 4 2

Z.M. Nkosi* 4 4 3 1

A.M. Dlamini 4 - - -

E. M. Davidson 4 4 - -

S.E. Matsebula*(Appointed 1 September 2004) 2 - 1 -

M.C. Nkuhlu(Appointed 1 September 2004) 2 1 1 1

C.J. Pearce* 4 5 4 -

S.M. Pefile# 3 1 - -

S.M. Pityana(Resigned 1 March 2004) - - - -

C.M. Drew

(Resigned 26 October 2004) 3 4 3 1

C. N. Mamba#(Appointed 1 April 2004) 2 1 1

* Non-Executive # Independent Non-Executive

The induction ensures that Directors are familiar with the Bank’s

business, senior management and strategies. Briefings of the Board

take place on an ongoing basis.

Risk Management and Internal Control

The Board acknowledges its responsibility for the process of risk

management, forming an opinion on its effectiveness and maintaining

a system of internal control that provides reasonable assurance of

effective and efficient operations. Management is accountable to the

Board for designing, implementing and monitoring the process of risk

management and integrating it with the day-to-day activities.

The Audit Risk and Compliance Committee is responsible for assisting

the Board in reviewing the risk management process and the significant

risks that may face the Bank.

The Nedcor Group has adopted a comprehensive enterprise wide-

risk management methodology which Nedbank Swaziland is in the

process of fully adopting. The system has the principles of corporate

governance best practice embedded in its foundation.

External Auditors

The Bank’s independent auditors are KPMG. Their report on page

26 sets out the responsibilities of external auditors with regard to

reviewing the financial statements and the Bank’s compliance with

both statutory and accounting requirements. The audit review also

considers the external auditors’ support of the directors’ statements

on going concern and adequacy of the internal control environment.

Corporate Social Responsibility

The Bank is committed to the community in which it operates. There

have been a significant number of social investment programmes

undertaken in the past year. The Bank recognizes that contributing

to the communities in which it operates, and behaving in an envi-

ronmentally responsible manner is crucial to ensure the sustainability

of the Bank.

The activities in this regard have been detailed under the Corporate

Investment Report on page 15, which also covers the upliftment

initiatives that the staff, through their own initiatives, have established.

Nedbank Swaziland has also contributed to the Nedcor group sustain-

ability report for 2004.

The Bank is also committed to transparent and ongoing communication

with shareholders, potential shareholders and other stakeholders to

ensure that all stakeholders have an understanding of the performance

and plans of the Bank. Shareholders are therefore encouraged to

attend the Annual General Meeting so that any concerns they have

may be addressed.



Corporate Social Investment

Nedbank is well aware of its role in the development of the country.

The bank has therefore defined a Social Investment Programme

within the parameters dictated by its priorities and strategies. Initiatives

in the area of social responsibility take cognizance of our position

and role in society. Over the year 2004, Nedbank sponsored a number

of organizations, some highlights of which are shared below.

2004 saw the birth of the Nedbank Imvelo MTB Classic – a mountain

biking event sponsored primarily by Nedbank (Swaziland) Limited,

and initiated by Big Game Parks. This event was by far the most

successful event of its kind organised to date, and was in support of

nature conservation and community projects. It drew on a cross-

section of participants from within Swaziland and the Southern Africa

region.

The Usuthu River Raft Race, an annual fund-raising event that is

organized by the Lions Club of Manzini, was another highlight.

Participants rafted through the Great Usuthu River in Big Bend.

Fifteen corporate teams from various organizations, including the

Nedbank team, competed in this Race. Nedbank was the main sponsor

of this event. The proceeds from the Race were then donated, through

the Lions Club of Manzini, to selected charity organizations and

communities for the year 2004.

Rotary International Dinner was held in order to raise funds to support

different communities. The bank sponsored Manzini Rotary to host

this dinner. Nedbank also donated towards the Sibebe Mountain

Climbing that was hosted by Mbabane Rotary Club. Nedbank supports

rural communities through forming partnerships with organizations

such as Rotary because they go out to the communities to see what

people really need.

Nedbank also sponsored the Matiwane Manana Arts Festival Launch.

The festival was held in honour of Mr. Matiwane Manana, a popular

local artist in the arts circles who has contributed immensely towards

the development of the Arts in Swaziland. Through this sponsorship,

Nedbank seeks to raise awareness of different arts and cultures and

cultivate the love for art hence enriching the cultural life of Swaziland.

Other sponsorships included Mthunzi’s Paradise Village receiving

financial support from Nedbank to assist in receiving recognition for

“Developing the community through art and tourism”, an event held

in Germany; the Swaziland National Swimming Association to host

the Southern African Swimming Tournament in which countries all

over Southern Africa were represented; the Kings Golf Cup which

draws participants from beyond our borders and boosts the tourism

industry; Cheshire homes; and a host of others.

The nature of Nedbank sponsorship policy is such that it must cover

as broad as possible a spectrum of the issues facing the nation within

the parameters of Nedbank’s overall strategy. Initiatives covering

HIV/AIDS, support for education and training, community based

programmes, celebrating sports, arts and cultural achievement and

environmental concern underpin the Nedbank Swaziland Social

Investment programme.


Economic Overview

In 2004, GDP growth was estimated to be 2.1%, versus 2.9% in 2003.

This is attributable to a low growth rate in foreign direct investment,

projected weaker performance of the manufacturing sector and low

agricultural productivity, a result of three consecutive drought seasons

in the region.

Foreign Direct Investment suffered a slowdown partially owing to a

downturn in inflows from the textile industry which depressed growth

in the manufacturing sector. The uncertainty over the country’s

preferential markets dampened investor confidence. However, the

outlook is that overall growth will benefit from increased construction

activities due to ongoing road and housing projects. The good

economic performance of the Republic of South Africa (RSA) in

2004 improved Swaziland’s export demand since over 50% of the

country’s exports are sold in the RSA. The declining interest rates

however cushioned the negative impact of the strong exchange rate

on the overall economy.

Government finally renounced the November 2003 Statement, a

development expected to restore the rule of law in the country and

encourage new FDI inflows and capacity expansions by existing

companies in the new year.

The sustained strength of the exchange rate impacted negatively on

the manufacturing sector. The sharp appreciation of the rand/lilangeni

exchange rate against the US dollar and other trading partners’

currencies during 2004 reduced the Emalangeni value of exports

destined to markets outside the Common Monetary Area. The

overvalued rand/lilangeni exchange rate against a basket of its trading

partners’ currencies meant that the competitiveness of locally produced

goods in the international markets weakened during 2004. The strong

local currency also had an adverse effect on overseas tourists inflows

by reducing their purchasing power, thereby making domestic goods

relatively expensive.

The HIV/AIDS pandemic has continued to undermine economic

growth and poses serious social concerns.

Inflation in January 2004 was 4.1% versus a rate of 3.2% for December

2004.


Remuneration Report

1. Remuneration and Appointments Committee (REMCO)

This Committee, which was set up in the second half of the year,

operates in terms of a Charter approved by the Board of Directors.

During the period of reporting, membership consisted of an independent

non-executive director, a non-executive director, and a Nedbank Ltd

executive director. As an interim arrangement the Committee was

firstly chaired by the Chairman of the Board and then by one of the

Committee members from Nedbank Ltd Africa Office. To give the

Committee the necessary authority to also deal with Board issues,

the chairmanship will be rectified during 2005.

In terms of its Charter, the Committee meets at least four times a

year. However in 2004, the committee met three times, because it

was formed during the second half of the year.

The committee’s responsibilities include:

Determining the remuneration, incentive arrangements and

benefits of executive directors and senior executives

Making recommendations to the board on remuneration

adjustments, short- and long-term incentives for executive

directors

Reviewing, monitoring and approving principles supporting

short-term incentive arrangements for all staff

Succession planning for executive management

2. Remuneration Philosophy and Policy

The Remunerations and Nominations Committee (REMCO) approved

a Remunerations Philosophy & Policy to be used in the design of

remuneration policies and strategies.

The purpose of remuneration is to attract, retain, motivate and reward

high-performing and talented staff to achieve Nedbank Swaziland

Ltd‘s objectives. Nedbank Swaziland’s objective is to encourage

sustainable long-term performance, at all times aligned with the

strategic direction and specific value-drivers of the business within

which Nedbank operates. The Remuneration Policy is not a stand-

alone, but is integrated in other management processes, such as the

performance management process and the overall human resources

policy of the Bank.

To maintain appropriate remuneration competitiveness vis-à-vis the

labour market, remuneration is reviewed annually and increases are

effected from 1st April. Non-managerial staff form part of a bargaining

unit and their annual increases depend on negotiations with the

recognised trade union. The REMCO determines the total cost of

increases allocated to management and executives and provides a

mandate for annual salary negotiations.

3. Performance Bonuses

Historically, performance bonuses have been paid to managerial staff

to encourage good performance. This is under review with the

intention of extending the incentive to all staff. Principles supporting

the incentive scheme in respect of 2005 have been finalised. Targets

will be based on Net Profit After Tax. Weightings will be factored

in respect of the performance of the entire Nedcor Group, which

will apply to all levels of staff. Bonus payments for all executive staff

will be approved by the committee.


Risk Management

Introduction

Enterprise wide risk management can be defined as the undertaking

of risk for reward. Risk therefore is any uncertainty, internal or

otherwise, that prevents the attainment of the Bank’s strategic

objectives. There are many ways of dealing with risk and Nedbank

Swaziland Limited has opted to manage risk through designing,

implementing and monitoring internal controls that are aimed at

giving assurance on the effectiveness of risk management, corporate

governance and control processes to shareholders’ and other stakeholder

interests. The bank has also implemented corporate governance codes

as a strategic response to risk management.

Risk Management Structure

The Board of Directors are responsible for the Bank’s overall risk

management and tolerance thereof, which ultimately impacts on

shareholder value creation. Management is essentially mandated by

and accountable to the Board for implementing, designing and

monitoring the risk management process and incorporating this into

the daily activities of the company through:

Identifying and assessing key and significant risks for impact

to business and likelihood of occurrence;

Aligning risks to the Bank’s corporate strategy;

Designing processes by which risk can be managed and main-

tained at acceptable levels; and

Developing ongoing and independent review of the risk manage-

ment process.

Operational Risk

Operational risk is defined as risk of loss arising from failed internal

processes, people and systems or external events. Risk management

has been previously thought of to be the responsibility of senior

management.

In an attempt to ensure total ownership of the risk management

culture in the business the Operational Risk Committee (ORCO)

was set-up in January 2004. The role of the committee is to ensure

that management creates and maintains an effective internal control,

risk management and compliance environment throughout the various

bank functions.

Each division meets monthly to discuss risk matters, among other

issues, pertinent to their functional areas. These risks are recorded

in a template, where identified risks are rated for impact to the

business and probability of occurrence, causal factors are identified,

action plans to mitigate the causal factors are given and implementation

dates set. Audit and Compliance departments are permanent invitees

to these forums. Each month, a MANCO ORCO is held where risks

identified at divisional levels are shared and further deliberated upon.

The ORCO meeting is chaired by the Managing Director and minuted

accordingly.

In November 2004 the Bank was introduced to the group’s enterprise-

wide risk management and monitoring framework (ERMF). The

group’s “ERMF” encompasses the Group’s Risk Universe, which lists

seventeen (17) key risks that the Group is principally exposed to.

Again an ORCO template is used to record risks identified and has

been revised as follows:

Risks identified are categorised according to the 17 key risks

e.g. operational, strategic, compliance, credit, people, reputa-

tional, etc, to name a few.

The causal factors identified are classified into people, processes,

systems, and internal and external events.

There are resolution logs, risk incidence and loss events temp-

lates included, respectively used, for recording and tracking is-

sues that have been resolved, risks that nearly resulted in finan-

cial losses and risks that led to a financial loss to the Bank.


Risk Management(continued)

A column is used to give justification for extension of timelines

citing reasons why original resolution deadline cannot be met.

All deadlines extension requests must be approved by the

Managing Director.

There has been significant improvement in the level of risk manage-

ment culture throughout the bank and this has been manifested in

favourable audit reports and reduced fraud incidents.

Market Risk

Market Risk is the potential impact on earnings of unfavourable

changes in foreign exchange rates, interest rates, prices, market

volatilities and liquidity. Market risks include trading risk, derivative

instruments used for hedging risk in non-trading portfolios, investment

risk, exchange rate risk and interest rate risk in the banking book.

The market risk associated with Nedbank is closely managed by first

identifying, understanding, monitoring and reporting the relevant

risks pertaining to the relevant areas.

Comprehensive structures and procedures have been implemented

to manage these risks in order to ensure that the organization operates

efficiently and effectively in order to achieve a minimized risk

environment.

Market risk is monitored independently by way of Compliance and

Treasury Risk Control functions which create communication channels

between independent risk functions and operating divisions. It is also

monitored through the comprehensive ALCO process.

Credit Risk

Operating Climate

The financial services industry continues to be more competitive and

complex. Institutions offering non- traditional banking financial

services and products increased their product offering and service

with a focus on electronic delivery of banking services and transactional

business.

Limited lending opportunities manifest in advances to deposits ratio.

The advances to deposits ratio highlights one of the key problems

in the Swazi banking industry – the lack of suitable lending opportu-

nities.

Factors attributing to this are largely a result of:

Low economic growth with little or no Foreign Direct Invest-

ment

High levels of poverty (66% of the Swaziland Population is

living below the poverty line, reducing the addressable lending

market)

Prudential requirements on Lending vs. Capital for large lend-

ing opportunities

There is continued uncertainty in the economy of Swaziland and in

particular the long term future of the Sugar and Textile industries,

although the textile industry recently received a boost with the

African Growth and Opportunity Act (AGOA) status being retained

for 3 years until December 2007.

The banks are actively seeking ways to assist with the growth and

support of small business requiring transparency and credibility by

both parties. Poor management and lack of control within businesses

represent the highest risk for banks.

The business rationale for Nedbank (Swaziland) Limited focuses on

growth and fulfilling customer aspirations having a client centric

approach. Nedbank is dedicated to deliver financial solutions to

customers through strategic business partnering. A broad strategic

initiative, to identify, focus and specialize on specific industries, has

been adopted.

Key Issues and Concerns

Generally lending decisions are made in accordance with credit

management parameters laid down by the Central Bank of Swaziland.

There are reporting requirements designed to identify unsatisfactory

accounts at an early stage. Distinction is drawn between the funda-

mental characteristics of corporate customers and smaller individual

advances. Policies are in place to ensure that the Bank is not

overexposed to particular concentrations of credit.

The Internal Loan Review Committee was established on 16 May


2002, in line with the provisions of the Central Bank of Swaziland

(CBS) Circular No. 8 and in furtherance of the principles of risk

management. Meetings are held on a quarterly basis.

There is a need for the provisions of the Central bank of Swaziland

– Circular 8 to be aligned with the provisions of the International

standard IAS 39, to enable consistency in reporting procedures.

Adequacy of Provision, Write-offs

As per the KPMG audit report, the Bank has adequate provisions in

place for its “Irregular Accounts”. In this regard the key principles

and assumptions on which the IAS39 impairment calculations are

based have been complied with. During the reporting period a

substantial amount of attention has been placed in this area in order

to generate adequate reporting procedures.

During the year, the Classified Loans and Advances book was reduced

from E18.6 million to E14.3 million, from the write-offs of non-

performing loans and the write-back of specific provision on certain

accounts to the level of expected settlement

Growth Trends

Advances growth for the year was strong at 62%, a benefit of

managements’ implementation of a more aggressive growth strategy

and in particular significant growths in the Asset based Finance and

Home Loan markets. The Corporate book has also shown a healthy

growth principally relative to the Sugar and Manufacturing industries.

Against this backdrop, the Bank’s market share of assets increased

from 14.3% to 16.4%.

There has been a noticeable narrowing of margins with the interest

rate declining, and the increased competition from other banks and

alternative funding mechanisms, which continue to put pressure on

already ‘thin’ corporate lending margins.

Quality of Book

The Credit department has been audited by Group Internal Audit

(Aug 2004); KPMG (Sept 2004, follow up Dec 2004), all of which

have indicated an improvement in the quality of the Book. In a

‘special’ audit on the Bank’s scheme and Micro loan book, it was

recommended certain additional administration controls be put in

place to align with ‘best standard practices’. This is being addressed.

Capital Risk

Capital risk is the risk of an organisation not being able to absorb

losses and not being able to support the competitive growth of the

business thus losing public confidence and the sustainability of

solvency. The ability of the Bank to maintain proper capital risk

management processes is displayed by the level of the Bank’s capital

adequacy ratio as prescribed by the regulator (Central Bank of

Swaziland).

The Bank’s capital risk is managed by the Finance department and

reported through to the Assets and Liability Management Committee

(ALCO). This committee has ensured that all investment returns on

capital create value for the shareholder whilst capital risk is minimised

at all times. The focal point of capital risk management is the creation

of value taking into account cost of all investments whilst ensuring

compliance to the regulatory threshold of capital ratio viz; 4% in

capital Tier 1 and 8% capital Tier 2, the Bank has successfully

managed this risk in the past year.

Liquidity Risk

Liquidity risk arises from the inability of the Bank to accommodate

decreases in liabilities or to fund asset growth in full, at the right

time and in the right currency. The regulator – Central Bank of

Swaziland prescribes the liquidity ratio requirements for the Bank

and the Bank reports to the regulator on the liquidity numbers on

a daily basis to ensure compliance to the regulatory requirements.

The ALCO reviews the liquidity ratios at every meeting to ensure

that the Bank has strategies in place to maintain a good liquidity

position.


Risk Management(continued)

OVERVIEW

This report should be read in conjunction with the attached Financial

Statements for the year ended 31 December 2004.

Results

We are pleased to report positive growth in the Bank’s operations

despite the economic challenges faced by the Bank as a result of a

0.5% plunge in interest rates during 2004. Since the Bank’s major

clients are export based; the strength of the Lilangeni against the

world major currencies has exerted a lot of pressure on interest margins

which impacted on pricing, resulting in a loss of competitiveness in

the world market, forcing some companies to cut down operations

due to eroded profitability. This in turn affected the Bank’s major

revenue lines viz: net interest income and net foreign exchange

gains compared to budgeted and prior year figures. Management met

these challenges by implementing the Bank’s strategic plan, which

entailed refocusing on improvement in process automation and

product innovation; this has supported the significant growth in the

non-interest revenue line from prior year.

The Financial results for Nedbank (Swaziland) Limited for the year

ended 31 December 2004 were as follows: Headline earnings declined

by 5% to E17.7 million against a target of E20.1 million (2003:18.7

million); as a result of this decline the Earnings per share ratio dropped

by 5% to 74.4 (2003: 78.5). The IAS 39 implementation continued

during year resulting in a 33% drop in the required adjustment of

impairments in advances of -E7, 495.00 (2003: E5.8M). This contrib-

uted to the year-on-year decrease in headline earnings. A dividend

totalling 17.5 cents per share (2003: 17.5 cents per share) has been

declared, with a dividend cover of 4.3 times (2003: 4.5 times). The

Bank’s policy is to declare dividends to an extent of 3.5 times cover.

Notwithstanding the decrease in headline earnings, the Bank has

shown significant operational growth as illustrated in the improvement

of the balance sheet and the key performance ratios.

Market Share

The Bank’s assets market share improved from 14.3% to 16.4% whilst

liabilities market share declined to 22.8% from 24.9%. The decline

was as a result of unattractive interest rates and the existence of non-

regulated deposit takers in the industry which presented unfavourable

competition to banks in this industry. The Bank’s commitment to

Chief Financial Officer’s Review

Fikile Nkosi - Chief Financial Officer


Headline Earnings

00 01 02 03 04

2 99

7

12.6 3 71

5

15.5

7

10 9

83

46.0

3

18 7

73

78.5

1 17 7

63

74.4

5

Headline Earnings

Earnings per share

Earning annual growth (%)

(8.0

) 23.6

195.

6

70.6

(5.0

)

providing quality service to its clients will ensure that Nedbank

regains its rightful position in the market and meet the challenges

of this dynamic financial services industry.

Net interest income

A 0.5% drop in prime during the year placed the Bank's margins

under pressure, however growth in assets as well as a focus on margin

management has contributed to a net interest margin of 47.2% (2003:

54.5%). Net interest income decreased to E36 million (2003: E40

million), with the ratio of NII to interest earning assets decreasing

to 5.3% this year from 6.5% in 2003. Management have re-focused

on the asset and liability management process of the Bank by re-

engineering these processes and training ALCO members (Asset and

Liability Management Committee) to ensure that margins are main-

tained at a profitable level without posing a threat to the Bank’s

profitability.

Non-interest revenue to total income

Management’s efforts to enhance shareholders value through product

innovation and process enhancements throughout the Bank have

brought about a 23.8% growth in non-interest revenue (NIR) to E40.3

million (2003: E32.5 million). This achievement has contributed

immensely to the overall performance of the Bank. This improvement

was mainly due to automation initiatives in the collection of com-

missions, fees and service charges, increasing these lines by 29.2%

(2003: 23.5%) to E34.8 million (2003: E26.9 million).

Expenses

The Bank has introduced a committee focused on cost reduction;

Intelligent Spend -Intelligent Save (ISIS) to further enhance shareholder

value by focusing on cost reduction initiatives. This committee has

looked at improvement of

processes by centralising

certain areas with the aim

of improving cross-skilling

and creating process effi-

ciencies in the core functions

of the Bank.

In response to this initiative,

total income increased by

5.2% to E76.3 million from

E72.6 million (2003); ex-

penses decreased by 1.1%,

while the cost to income

ratio reduced to 67.4%

Chief Financial Officer’s Review(continued)


Net Interest Income

20%

5.6%

11%

24.6%

(9)%

NIIGrowth %

00

01

02

03

04

Period NII(E’000)

30,772

29,047

32,147

40,049

36,063

79.13

Non-Interest Revenue

30.1%

29.8%

46.4%

44.8%

52.49%

NIR to TotalIncome (%)

00

01

02

03

04

Period NIR(E’000)

13 241

12 301

27 779

32 534

40 270

Assets

16.4%

Other Banks

Liabilities

22.8%

Other Banks

Expenses

00 01 02 03 04

36 2

04

34 4

42 42 9

88

52 0

51

51 4

77

93.2

83.2

71.7

71.7

67.4

Total Expenses (E’000)

Expenses-to-incomeratio (%)

Market Share 2004

(2003: 71.7%) against an industry average of 64%.

Human capital remains the Bank’s focal point and the Bank’s strategy

is to ensure the highest return from this asset. Management have

looked at several initiatives to ensure that productivity from its human

assets remains high. However, such initiatives contribute to the

overall expenses, making staff expenses the largest portion of the

overall expenses. It is pleasing to note that there has been a 7.6%

decline in these expenses from prior year.

Taxation

As a result of the 5.7% decrease

in profit before taxation, a

corresponding total decrease in

the tax expense was recorded.

This expense decreased by 7%

to E7.1 million. In 2003 this

expense increased by 54.9% to

E7.6 million due to higher

profits before tax. The current

year’s after tax performance did

not benefit as much from over-

provision adjustments and other

permanent differences. This

resulted in an effective tax rate

of 28.5% against a normal tax

rate of 30%.

Shareholder's funds

Shareholders funds grew by

23.9% to E77.8 million (2003:

E62.8 million) representing an

overall capital adequacy ratio

of 16.3% (2003: 17.5%) which

is well above the statutory re-

quirement of 8%. Primary

capital stands at 14.89% (2003:

15.5%), well above the minimum requirement of 4%. The re-

engineered Asset and Liability Management Committee has seen to

the proper management of the Bank’s capital to ensure compliance

with regulation and ensuring that the risk of impairing the Bank’s

operational processes is minimised at all times.

Balance sheet

Total assets increased by 9%

to E752 million (2003: E693

million). Our constant efforts

to attract good business are

not yielding the desired re-

sults, due to low interest rates,

as evidenced by the decrease

in return on average assets.

This ratio decreased to 2.5%

(2004) from 2.7 % in 2003.

CAPITAL ADEQUACY

The Directors are satisfied that the Bank is well capitalised and meets

the Regulatory Authority requirements.

FINANCIAL REVIEW

Targets and objectives

Alluding to the Chairman and the MD’s comments, 2004 has been

a challenging year for the bank and due to these challenges, the

financial targets set for 2004 have not been met. The Bank remains

committed to upholding best practices at all times and complying

with International Financial Reporting Standards.

Chief Financial Officer’s Review(continued)

23 ANNUAL REPORT 2004

Return on Assets

00 01 02 03 04

482

225

566

923 67

5 35

0

692

948

752

1450.6 0.8

1.9

2.7 2.

5

Total Assets (E’000)

Return on average assets %

Taxation

00 01 02 03 04

37.0

34.2

30.0

28.9

28.5

1 77

3 2 33

6

4 91

5 7 61

6

7 08

1

Tax Charge (E’000)

Effective Tax Rate (%)

Key financial performance indicators

2004 2003Actual % Actual %

Indicator

Return on average shareholders’ funds 22.8 29.8

Return on average assets 2.5 2.7

Expenses to total income 67.4 71.7

Non-interest revenue to total income 52.7 44.8

Effective tax rate 28.5 28.9Shareholders’ Funds

00 01 02 03 04

32 2

98

36 2

02

46 4

78

62 8

25

77 8

369.8 11

.13

27.9 29

.8

22.8

Shareholders’ Funds (E’000)

Return on equity %

Documents

ANNUAL REPORT 2004 - Nedbank...Financial Highlights for the year ended 31 December 2004 ANNUAL REPORT 2004 02 Cost to Income 00 01 02 03 04 93.2 83.2 71.7 71.7 67.1 Net Income before