Nedbank Group Limited (NED) Earnings Call Transcript & Summary

Ladies and gentlemen, we are ready to start. Good morning.[Indiscernible]. Welcome to the 56th Annual General Meeting of the shareholders of Nedbank Group Limited. My name is Paul Makwana and I'm the Chairperson of the group. I'm pleased to welcome a number of guests, members of the press, advisers and senior staff of Nedbank who are attending this meeting together with our nonexecutive directors, some of whom I got to see this morning. It is a requirement that everybody attending the meeting in person signs the attendance register. Should anybody still be required to sign the register? Will they please do so now. JSE Investor Services, our transfer secretaries. Will be recording shareholders' votes and acting as scrutineers. The notice convening this meeting on Page 13 of the AGM booklet has been in your hands for the prescribed period and is taken as read. I hope that all concerned find this in good order. And all are happy that we proceed with the AGM proceedings. We are required to note the quorum and voting requirements on the resolutions to be proposed at this meeting. In terms of our memorandum of incorporation, the quorum for an AGM is 3 or more shareholders present and entitled to vote and shareholders representing at least 25% of the issued ordinary shares. The percentage voting rights required to pass ordinary resolutions is more than 50% of the voting rights entitled to be exercised thereon and to pass special resolutions, at least 75% of the voting rights to be exercised thereon. The Company Secretary has confirmed that the necessary quorum is present and I hereby declare the meeting duly constituted. The documents required by law, including the MOI, share register and declarations of interest by the directors are available from the group company secretary for inspection. If you wish to have sight of these, let us know, and the group company secretary will arrange. In terms of Section 634 of the Companies Act, voting may either be by show of hands or by way of a poll. It is my intention to conduct voting on all the proposed resolutions by way of a poll as in accordance with Section 63 7A of the Companies Act. We have received requests from a sufficient number of shareholders to conduct voting by way of a poll. For shareholders attending in person, voting will take place via an electronic device, which I hope you have in your hands. Please note that the same electronic device will be used for shareholders that have also registered to attend this general meeting that will follow at 10:30, which relates to the proposed Nedbank odd-lot offer. The transfer secretaries have handed the keypad and smart card to those shareholders present in person and entitled to vote. We will now begin with a short demonstration by Lumi on the use of the keypad and then proceed with the meeting if we can then hand over to Lumi to do the demonstration.

Thank you, Chair, and good morning to the Board. Good morning to everybody present. My name is Andre. I'm from Lumi Technologies. We will be managing the voting inside the room here today. So for those of you that are present and entitled to vote and have chosen to vote at this AGM, you would have received a handset as well as a smart card at registration. If you haven't and you do require one, please go to registration and get one. Please ensure that the smart card is inserted correctly. So that's with the gold chip facing you and set into the top of the handset. And you should then have the voting options on your screen. So on your screen, you'll either already be in Ordinary Resolution 1.1 or you can click on cancel the red button and get a list of all the resolutions being tabled at today's AGM. In order to vote, you can use as -- for some of you will remember the BlackBerry, you can use the trackball in the middle to scroll up and down through the resolutions. When you add the resolution you wish to vote on. Just press on the blue button or the green button. You'll see the reference of the resolution. You can then choose the green button to vote then select your option that you wish to make, either for, against or abstain. And once it's submitted, you can then move on to the next resolution. Voting will remain open for the duration of the meeting. Once you've gone through all the resolutions, you should get a final screen that shows all the resolutions and how you have voted for them. So as a final check, you can then scroll to any one of them. If you wish to change your mind, click into it and change your vote for that specific resolution and then you'll go back to the list of all the resolutions and how you voted. If at any point, you do struggle during the meeting, please just raise your hand, and we'll come through and assist you if need be. Thank you, Jay.

Thank you very much. I do suspect though that if there's a 28 30 year old shareholder in the room, they don't know what you're talking about with the Blackberry. Thank you so much. Representatives from Lumi as you've seen are available for any assistance that you may require. Please raise your hand and they will attend to you wherever you are at your seat. For shareholders joining the meeting via the webcast or via teleconference, please take note of the following: Shareholders who are participating online, we'll be able to view the live webcast of this meeting and ask questions. Certified shareholders who have not cast their votes via the proxy prior to the meeting, will be able to access the voting platform and vote during the meeting. All other shareholders, who have launched proxy or voting instruction forms prior to the meeting, we'll not be able to vote at the meeting as their votes have already been recorded by the transfer secretaries. But they may follow the live webcast or follow the proceedings via teleconference and ask the Board any questions they may have. When we get to the appropriate term, we will take the questions from our shareholders, starting with the shareholders attending in person, then the shareholders attending via teleconference and the shareholders attending via the webcast. Questions from shareholders participating via the webcast can be submitted by clicking on the Question button at the top of your left screen. They will be received and read out by the company secretary and responded to when time is allocated for questions. If you experience any technical issues, there is a help button on the left side of the webcast page. Shareholders participating via teleconference will be individually enabled by Chorus Call to ask their questions on the line and will be responded to when time is allocated for questions. The voting platform is now open and will remain open until all the proposed resolutions have been dealt with. Those of you who are eligible to vote at this meeting may do so now if you wish to or at any stage during the meeting by clicking on the action button, click to vote on your screen to view the resolutions to be voted on. Once you have made your voting selections, press the green submit button at the foot of the screen on the vote on all resolutions page. The platform will confirm that your vote has been accepted. Once the vote has been accepted by the platform, it cannot be changed. Thereafter, by clicking on the dashboard link on the screen, you will be able to return to the screen to continue viewing the webcast. The voting platform will remain open for a short time after the last resolution has been proposed to allow you to complete your votes. The voting results for all resolutions will be announced at the end of the meeting to allow time for the scrutineers to record the online votes. We shall now proceed with the business of the meeting. Turning to annual financial statements and reports the audited financial statements for the financial year ended 31 December 2022, the directors and auditors reports and the report of the Group Audit Committee have been in your hands for some time and are taken as read. I shall now turn to a point to say a few words from the Chairman's desk. The South African economy was negatively impacted by a succession of shocks throughout 2022, some as a result of global challenges, but mainly self-inflicted. They started with Russia's innovation of Ukraine, driving oil, food and other commodity prices higher and adding to inflationary pressures in most countries. As a result, interest rates in most countries rose faster than previously expected, putting pressure on many borrowers, consumers, corporate and sovereign. In South Africa, the year ended off with very high levels of load shedding, which have continued into 2023. Operating in this environment has not been easy for us as Nedbank and our clients. In 2022, the Board heightened its focus on several areas, including guiding the group through the difficult and volatile macroeconomic environment that I've just described, making progress on the group strategy and setting ambitious new medium targets as well as addressing historic reputational matters and heightening our focus on ESG matters alongside an increased focus on board and executive succession planning. In this context, there are a few top-of-mind points from 2022 that I'd like to highlight at this AGM. Firstly, notwithstanding the difficult environment, the group's financial performance for 2022 was strong and reflected at [ trio of 14s ] Headline earnings increased 20% to ZAR 14 billion, ROE increased to 14% and the set 1 capital adequacy ratio of 14%. Importantly, our balance sheet is robust as it should be in the current period of political and economic volatility. Fulfilling our purpose of using our financial expertise to do good was demonstrated through our ongoing delivery against the United Nations Sustainable Development Goals, in short, referred to as and UNSDGs. On our continued efforts focus on leading in ESG matters, which is really is intent to try and do the DNA of our business and our commitment to sustainable development finances we tilted our portfolio to areas that create positive impacts. As of 31 March, December -- 31 December 2022, the group had exposures of ZAR 123 billion that support sustainable development finance, representing 14% of the group's gross loans and advances. It is our ambition to have increased our related exposures to around 20% of the group's total loans by the end of 2025, support by ZAR 150 billion in new sustainable development finance for our clients. We also continued to make investment and commitments aimed at mitigating climate risk and driving a positive transition that creates jobs and business opportunities. We need real change in a short space of time to transform and decarbonize our energy sector, our transportation sector, our food systems and our built environment. As I was saying, we also continued at commitments, mitigating climate risk and driving a positive transition that creates jobs and business opportunities. We need real change in a short space of time to transform and decarbonize our energy sector, our transport sector, our food systems and our build environments. Despite the challenging environment within all these sectors, there are exciting opportunities, and we want to be the bank that supports our clients through the just energy transition. We have already taken the lead in capital mobilization and the funding of green projects guided by our energy policy. This will public finance the mission of our fossil fuel portfolio with our fossil fuel and power generation light parts to 2050 to be disclosed next year. We once again achieved a Level 1 broad-based economic empowerment contributor status under the amended financial sector code. It is the fifth year in a row that we have been able to meet the highest rating on the broad-based BEE scorecard. And it speaks volumes about how we put our purpose into practice albeit that a scorecard can never capture the true transformation journey that we're on. From a strategy perspective, over the past 5 years, we have been investing in information technology to completely refresh the Nedbank IT stack. And we have now achieved 91% completion of the IT build of this complex and challenging task that is vital for ongoing competitiveness. We plan to continue investing albeit at lower levels to further enhance our digital platforms and remain at the leading edge of the rapidly changing digital landscape. Encouragingly, we can see that our investments are bearing fruit, and the success of our digital transformation is evidenced by the strong growth in the use of our digital platforms and enhanced line satisfaction levels as well as improved efficiencies. The world of work continues to involve as many business reimagine models, business models and people practices following the pandemic. As part of our commitment to building the nations where we operate and being an employer of choice, we continue to invest in skills for the future and contribute skills that preserve the employability of our people. Lastly, we reflected on feedback from our shareholders on remuneration matters. And we were pleased that during our recent board led ESG road show, shareholders, welcome to the change that we made to our remuneration policy to add individual performance conditions to the long-term incentive awards that we issue lower down in the organization, and as a result, no longer have any time-based vesting. Michelle Obama opined with inspiration about her learnings during her family's time in the White House. And I quote, she said, "we learned about gratitude and humility. So many people had a hand in our success. " Close quote. this resonates with me as I reflect on the 26,000 Nedbank employees will continue to serve our clients and go above and beyond to ensure the organization's success. Thank you to my fellow board members for their support. In 2022, we welcomed Mteto Nyati and Phumzile Langeni to the Board as independent nonexecutive directors. To both strengthen the Board and in anticipation of the retirement of Dr. [Indiscernible] who has reached his 9 year term and Professor Tshilidzi Marwala, who stepped down as an independent and executive director at the end of February 2023 to take up the role of Rector of the United Nations University in Tokyo or Kyoto. And we thank them all for their service. In line with our succession planning process,Daniel Mminele , assumed the position of Independent nonexecutive Director and Chairperson designate on 1 May and will become our new Chairperson at the close of this Annual General Meeting today. As I hand over the baton of leadership to you, Daniel. I'm reminded of an African adage that leaders or elders have an important task to plant trees under whose shade, they do not expect to sit. This resonates well with the strategic quest of Nedbank, to be Africa's most admired financial services group by staff, clients, shareholders, regulators and communities together a 360-degree view of the bank. I wish you great success. Every leader has their own sense of purpose and live quest. I know Nedbank will undoubtedly benefit from your extensive local and global banking financial service experience as you fuse together your life purpose together with Nedbank. I wish to also express deep thanks to our Chief Executive, Mike Brown. For your authentic leadership, you continue to lead with integrity and passion. Our country needs more CEOs of your caliber, who are incredible states persons like you who recognize that there's but asymbiotic relationship between delivering excellence in corporate performance while simultaneously being relevant and value-adding corporate citizen in the country or countries where we operate. This morning, we also announced on the JSE Stock Exchange News Service that following the successful completion of the Chairperson succession process and the subsequent appointment of Daniel Mminele as Chairperson from 2 June 2023. The Nedbank Group Board supported by a global search firm with strong domestic presence will commence a process to choose a successor to Mike Brown who joined the Nedbank Group 30 years ago, has been the Chief Executive since 2010 and an Executive Director since 2004. Nedbank has a strong track record of effective leadership succession. And this process will consider both internal and external candidates. Mike who's 57 years of age, continues to enjoy the total confidence of shareholders and the Board. He will continue in his current Chief Executive role until such time his successor has been chosen and will retire after an appointment has been made in a suitable handover process has been completed. It has been an enormous honor and privilege to serve as Chairperson of Nedbank since December 2021, when I took over after the passing of Vassi Naidoo . As I look back on just over a decade of serving as a Nedbank director, I feel in an enormous sense of pride at our collective achievements, and I'm grateful to have worked along side, such exceptional people. There are too many people to thank and not enough time to mention them individually. I'm grateful for every hand that contributed to make this time a success. Thank you also to our shareholders for the sometimes robust debate and for always challenging us to make Nedbank better, particularly better than we found it. I shall now hand over to our Chief Executive, Mike Brown, to reflect on 2022 in a little more detail and provide an update on the group's performance in the first 4 months of 2023. Thank you, Mike.

Thank you, Chairman. And as you said, I'm going to start by looking back on 2022. As you heard, the external operating environment during 2022 was very challenging for us and our clients both globally but more so here in South Africa, and that was evident in weak GDP growth, severe electricity shortages, higher interest rates, higher levels of inflation as well as the muted performance on both bond and equity markets. In this very difficult external global environment Unfortunately, South Africa continues to score more than our fair share of own goals. Against this challenging backdrop, Nedbank Group's 2022 financial performance was strong. As Paul said earlier, our headline earnings grew by 20% to ZAR 14 billion. Our return on equity increased to 14%. However, it still does remain below the 2019 level of 15% as well as our estimated cost of equity of around 14.9%. Further increasing our ROE is a key focus of the management team. Importantly, if you look at our business clusters, the CIB or corporate investment bank, RBB or Retail and Business Banking and Wealth all generated return on equities above the group cost of equity with our Nedbank Africa Regions cluster improving very strongly off a low base. The excess capital held at the center of the bank resulted in a dilution of the group's overall ROE to below our cost of equity. And this is being addressed into earlier through our capital optimization program that I'll expand on later. The headline earnings per share increase were supported by double-digit revenue growth offset by a slightly higher credit loss ratio and a well-managed expense base. A fortress balance sheet with key performance indicators all at multiyear highs and excess levels of capital enabled the group to increase the 2022 dividend to a record level of ZAR 16.49, up by 38%. And simultaneously announced a ZAR 5 billion capital optimization initiative to be executed through both a share repurchase program that is being executed under existing shareholder approvals and odd-lot offer. At the general meeting that immediately follows this Annual General Meeting, shareholders will be asked to approve this odd-lot offer. The ZAR 5 billion was regarded by the Board as a structural capital surplus after considering all potential growth opportunities in support of both our clients and the countries in which we operate. While also ensuring that our balance sheet remains resilient in the current volatile environment. These capital actions are expected to be accretive to return on equity by reducing that structurally surplus capital held at the center and will also be accretive to diluted headline earnings per share. During 2022, we made good strategic progress on the drivers of growth, productivity and risk and capital management. Growth trends across net interest income and noninterest revenue increased strongly compared with the prior year. This was supported by main bank client gains across all of our businesses, improved levels of cross-sell, increased transactional activity and double-digit growth in all digital activity. We experienced enhanced levels of productivity evident in an improvement in our cost-to-income ratio to 56.5% and positive movements in key operational metrics such as ongoing headcount and floor space reduction. We have made good progress, and we are committed to further improving our cost-to-income ratio as we are not satisfied with this, and we expect this ratio to continue to decline going forward. All our key balance sheet metrics improved with the group's common equity Tier 1 ratio up to 14% from 12.8% the year before, a LCR or liquidity coverage ratio of 161%, and our total ECL coverage of 3.37%. These metrics put Nedbank in a strong growth position as well as being well prepared for any potential deterioration in the macroeconomic environment. From a strategic perspective, our strategy remains appropriate and delivery remains on track. We continue to see the benefits of digitization that have been delivered through the substantial completion of what is known as our managed evolution technology build program designed to deliver a modern, modular and agile IT stack that is in turn driving continued improvements in client experience, main bank clients and transactional deposit gains as well as improved efficiencies. For me, some of the highlights in 2022 included this Managed Evolution IT build that is now over 91% complete. With the final components to be delivered over the next 12 to 18 months. This, of course, means that the risk to an IT program of this nature is largely behind us, and we are increasingly generating benefits in both revenue and cost savings. Our digital metrics were very strong. Client transactional values and volumes continued to grow at double-digit levels and 53% of all our retail sales are now done digitally, up from a level of 12% in 2019. We also achieved the key milestone of reaching 2 million active users on our Money App and over 2 million users on our AVO super app. Client satisfaction metrics here, we ranked #1 among South African banks on the Net Promoter Score in the Kantar Net Promoter Score survey up from #2 in the previous year in that same survey done by a consultant. We aim to maintain this ranking. On lending and deposit market shares, we had a mixed performance with gains seen in household deposits, importantly, home loans in the second half of the year and retail overdrafts, with slight declines in personal loans due to the deliberate tightening of credit criteria while we were selective in origination in some of our areas of strength, being vehicle finance and commercial property finance. On operating model benefits, at the end of 2022, we had realized ZAR 1.5 billion in cumulative benefits under our target operating model 2.0 program and we remain on track to reach our target of ZAR 2.5 billion by the end of this year. Lastly, the Nedbank share price in 2022 increased by 21%. Outperforming the South African banks index that increased by 12%. During 2022, we also made good progress towards our published 2023 targets by exceeding our 2019 diluted headline earnings per share level of ZAR 25.65 in 2022. That's a year earlier than we had previously planned. And we still aim to achieve an ROE of greater than 15% and a cost-to-income ratio below 54% and maintain our #1 NPS ranking by the end of this year. Given our strong 2022 performance, we have also now set ourselves revised medium term, think 2025 and long-term targets. We aim to achieve an ROE of 17% and a cost-to-income ratio of 52%, both in 2025. Over the longer term, we aim to further improve these to above 18% for the ROE and below 50% for the cost-to-income ratio, respectively. Certainly, achieving these targets, and in particular, in the more difficult than expected macroeconomic environment will require much hard work. But should we be successful, this will be value creating for shareholders. I certainly look forward to working closely with our Chairperson Designate, Daniel Mminele , who I have known professionally for many years. And we are extremely pleased to have attracted someone of Daniel's undoubted experience to the role of Nedbank Chairperson. My sincere appreciation also to Paul Makwana, our outgoing chairperson for his leadership and guidance over the years. And in particular, for his taking over the Chairpersonship during a difficult period after our previous chairperson, Vassi Naidoo passed away. Trevor Adams, our Chief Risk Officer, retired at the end of March 2023 and has been succeeded by Dave Crew Brown, while Fred Swanepoel, our Chief Information Officer, will retire at the end of June and will be replaced by Ray Niker. These appointments evidence very good succession planning and bench strength at Nedbank, and I would like to express our gratitude to both Trevor and Fred, who have played an instrumental part in the success of Nedbank. Thank you also to the Board for its continued support during another difficult year. A special word of appreciation as always, to my group executive team who delivered exceptional results and value to our stakeholders in 2022. With regards to the commencement of a process to choose my successor, as outlined by Paul earlier, I am fully supportive of this process. And I remain 100% committed to continue in my current Chief Executive role until such time as a suitable successor has been chosen and the handover process has been completed. After nearly 14 years in the role, I do believe that the timing is right to start a process that when completed, will ensure that I can seamlessly pass the baton on to the next Chief Executive of Nedbank. Thank you also to our dedicated employees for their commitment and hard work in difficult conditions. I certainly appreciate the value that you strive to deliver to our clients at every touch point. We thank also our more than 7 million retail and wholesale clients for choosing to bank with Nedbank every single day, and we appreciate also the support and guidance from the investment community, our regulators and other stakeholders. As Nedbank, we will continue to play our role in society as we fulfill our purpose of using our financial expertise to do good. Shifting now my focus from 2022 on to 2023. This morning, ahead of the AGM, we released the following voluntary trading update on the JSE Stock Exchange News service. Reflecting on the global economic environment, activity slowed as demand weakened in response to persistently high levels of inflation and this resultant in steep rise in interest rates. While global inflation is gradually receding, it remains above central bank targets, and the U.S. and other major central banks continue to tighten monetary policy. Global liquidity has also deteriorated, resulting in much tighter financial conditions with U.S. regional banks suffering particular challenges. This global slowdown is also weighing on economic activity and risk appetite in emerging and developing countries. Closer to home in South Africa, the operating environment in the first 4 months of the year has also become much more challenging when compared to our expectations at the start of the year. On top of a weaker global economy and lower international commodity prices, domestic economic activity continues to be negatively impacted by acute electricity shortages, logistically constraints higher-than-expected inflation and the continued rise in domestic interest rates. In addition to South Africa's relatively weak growth prospects, slow progress in tackling corruption coupled with the potentially severe economic consequences of the U.S. reaction to South Africa's alleged compromising of its nonaligned stance in relation to the Russia-Ukraine conflict have added further to South Africa's country risk premium. As a result, bond yields have increased sharply and the rand has declined to record low levels against the U.S. dollar. The Nedbank Group economic unit has now revised its GDP growth forecast for 2023 down from 0.7% in February of this year to now 0.2%. The cost implications of load shedding and a weaker rand have resulted in upward adjustments to our inflation forecast. Which is now expected to average 6% during the year, up from our expectation of 5.5% earlier this year. In response to the higher than expected levels of inflation, the weaker rand and the continuous tightening of foreign monetary policy. The SabsMPC Committee increased the repo rate by 50 basis points in March and a further 50 basis points in May. Our economic unit now expects the prime lending rate to remain flat for the rest of this year at 11.75% before starting a slow decline in 2024. But clearly, there is some upside risk to that forecast. As a result, the prime interest rate is 75 basis points higher than the 11% peak we had expected at the start of the year, as I said, with upside risk, given the ongoing rand weakness. The primary implications of this environment for banks of the worse-than-expected macroeconomic outcomes is in increased levels of consumer stress and result in increases in credit losses. Offset to some extent by higher levels of endowment income. While currently, the economic benefits of increased endowment income are greater than the increase in impairments. This benefit is narrowing and is likely to reverse with further interest rate increases. Turning now to the financial performance in this difficult environment. The financial performance of the group in the first 4 months of this year, the period -- defined as the period compared to the first 4 months of last year reflected mid-teen headline earnings growth. With strong net interest income and noninterest revenue growth, a credit loss ratio that was above the top end of our through-the-cycle target range, very strong associate income growth and focused expense management. Revenue growth is currently performing ahead of our 2023 full year financial guidance provided by management in March of this year. The group's credit loss ratio for the period is also higher than the full year guidance as a result of the normal seasonality that we see in bad debts in our retail portfolios, together with the effects of a more difficult than expected macroeconomic environment and the resultant impact of that on collections across our retail portfolios. At this point in the cycle, the incremental accounting benefit of higher interest rates on endowment income for the first 4 months continued to exceed the incremental increase in impairments. NII growth for the first 4 months was above mid-teens when compared to the prior period and is ahead of management's expectations. This growth was driven by banking loans and advances growth and an increase in the group's net interest margin, largely as a result of the impact on endowment from interest rate increases. Average interest-earning banking assets increased year-on-year by high single digits, reflecting improving year-on-year growth in CIB banking loans and advances and ongoing growth momentum in RBB banking loans and advances. Deposit growth remained ahead of advances growth. The group's net interest margin increased from the 393 basis points reported at the end of last year and is above the 410 basis points reported for the fourth quarter of last year. driven by the run rate benefit of interest rate increases in 2022, alongside the further interest rate increases we have seen in the first quarter of this year. The group's full year NII growth is now expected to be slightly higher than the guidance provided in February of around mid-teens. Impairments for the first 4 months increased when compared to the prior period as the group strengthened its total coverage given the impact of a more difficult macroeconomic environment on our consumers. The group's credit loss ratio for the first 4 months was above the top end of the guidance we provided for the full year, which was 80 to 100 basis points with upside risk and was also above management expectations for the period. The higher impairments and credit loss ratio reflect the impact of higher-than-expected interest rate increases, higher levels of inflation and higher levels of load shedding on consumers and were most evident in our retail and business banking credit loss ratio being above its through-the-cycle target range of 120 to 175 basis points. Stage 3 loans in Retail and Business Banking increased across the portfolio. Retail and Business Banking impairment provisions for the first 4 months also incorporate our updated macroeconomic assumptions up to the 30th of April, to ensure that the group remains well provided within a deteriorating economic environment. The credit loss ratios for CIB and Nedbank Africa regions were within their respective through-the-cycle target ranges, while Nedbank's wealth credit loss ratio remained below its through-the-cycle target range. The group's credit loss ratio is anticipated to decline from these levels given the traditional improvement due to seasonality in Retail and Business Banking as well as focused management interventions. But is now expected to be above the top end, i.e., 100 basis points of the group's through-the-cycle target range for the remainder of the year and ahead of the guidance we provided in February. The recent MPC decision to increase interest rates by another 50 basis points in May has increased the risk to credit loss ratio guidance. Noninterest revenue growth for the first 4 months was ahead of management expectations on a restated basis given IFRS 17 reclassifications in the base. Fee and commission growth was solid, driven by client transactional activity, cross-sell and main bank client growth as well as a good performance in Asset Management. The closure of rounds of renewable energy deals previously expected in the first half of this year has now been delayed into the second half. Insurance income benefited from a nonrepeat of the claims relating to the [indiscernible] floods in the first half of 2022. Trading income was solid in the first 3 months of the year, but deteriorated into April. Our guidance for NIR growth for the full year 2023 of around mid-single digits remains in place. Expense growth for the 4-month period was high single digits, again, on a restated IFRS 17 base and slightly ahead of management expectations as a result of higher non-salary-related staff costs, higher levels of communication and travel costs as well as higher fees linked to revenue growth. Reducing the expense growth rate over the rest of the year and into the future is a key focus of management. Our guidance for expense growth for the full year to be mid- to upper single digits remains in place. In the first quarter, associate income of ZAR 512 million relating to Nedbank Group's 21% shareholding in ETI was recognized. ETI reported attributable income to shareholders of $90 million in the fourth quarter of 2022. Incorporating the impact of the final Ghana sovereign debt restructure on ETI, which was materially less than we had expected. Resulting in a reversal of the ZAR 175 million estimate provided for this in associate income in our 2022 results. In addition, ETI released its first quarter 2023 results on the 28th of April, reporting attributable to income to shareholders of $63 million and Nedbank's share is estimated to contribute ZAR 237 million to Nedbank's associate income in the second quarter of this year. As you know, we account for ETI 1 quarter in arrears. So as a result of both of these, we estimate that associate income relating to ETI for H1 2023 will be approximately ZAR 749 million up 59% compared to the ETI related associate income in the first half of last year. The group's Jaws ratio, which is revenue growth, including associate income, less cost growth was strongly positive. The cost-to-income ratio in the first 4 months improved and pre-provisioning operating profit growth was very strong. We currently expect the group to produce muted headline earnings growth in the first half of this year with a better performance expected in the second half of this year, given the higher H1 2023 impairments in RBB and in CIB, the impact of higher private equity valuations in the first half of last year as well as the delay in closing renewable energy rounds into the second half of this year. Together with a slowdown in trading income growth into the second quarter. All of this partially offset by strong growth in Nedbank Wealth and Nedbank Africa regions. At 31 March 2023, Nedbank Group reported a CET1 capital adequacy ratio of 13.5%, up from 12.7% the year before. Above the upper end of the group Board approved target range of 11% to 12%. And this reflects the benefit of ongoing strong earnings growth offset by the declaration of the group's final 2022 dividend, balance sheet growth and capital optimization activities. The group substantially completed its general share repurchase by the end of May, a total of ZAR 4.25 billion of shares have now been repurchased. On average, the share repurchases were concluded at levels slightly below the group's book value per share at the end of last year of ZAR 215.33. And as I said earlier, we'll be both -- will be accretive to both ROE and diluted headline earnings per share. The odd-lot offer, which comprises the balance of the ZAR 5 billion capital optimization initiative is proposed for approval by shareholders at the general meeting immediately following this meeting. Liquidity metrics remained strong. And in our recent Pillar 3 report at the end of March, our liquidity coverage ratio was 156% and our net stable funding ratio 117%. Showing that there are no implications evident from the recent global banking and other developments. Thank you, and I'll now hand you back to the Chairman.

Thank you, Mike. I will now take this opportunity to request Ms. Linda Makalima who chairs our Group Transformation, Social and Ethics Committee to share the report of that committee.

Thank you, Chair. The report of the Group Transformation, Social and Ethics Committee as required in terms of regulation, 43 5C of the company's act is included in the governance report which is a supplementary report to the 2022 integrated report, which is available on our website. We have a video to present to shareholders on the activities of the committee during the year, which we will display while the votes are being counted at the end of the meeting. Thank you, and I hand back to Chair.

Thank you, Linda. I will now deal with any questions relating to the business of this Annual General Meeting, including the financial statements and all the proposed resolutions as set out in the notice of the AGM which we all take as read. Are there any questions from shareholders in the auditorium on the business of this AGM, including the resolutions. If the bright light that I'm looking at is not misleading me. I do not see any questions. With that, we -- sorry, please provide -- is bringing a microphone to you --

Thank you. My name is Tracey Davies. I'm from shareholder activist organization, JustChair. Just to clarify, are you taking questions now on the -- on your reports more broadly or only on the AFS and the resolutions?

What's the guidance? More broadly.

Okay. Thanks, Chair. I may ask you a question then. Okay. Chair, we would like just to say that it is very encouraging to see that Nedbank has started working on establishing short- and medium-term targets for reducing fossil fuel exposure. The urgency of this can't be overstated. You may have seen yesterday, a report was published is finding that human activities have already pushed 7 of our 8 planetary boundaries into risk areas. Currently, there are no short-term targets in your energy policy for oil and gas financing. And once you have established these glide paths short- and medium-term exposure to fossil fuels? Will you be updating your energy policy with science-based short-term targets for oil and gas that will support your commitment to 0 fossil fuel exposure by 2045. Chair, my colleague also has a question on a similar topic. Please let us know if you'd like her to ask that one before you answer?

Please proceed.

Thank you. My name is [Indiscernible] also from JustChair. Nedbank has previously established itself as a leader in -- from a climate perspective. And as you know, JustChair has regularly and publicly praised the bank for the steps you've taken. Your climate change position statement explicitly links Nedbank's actions to that required by climate science and you state in that position statement that for the energy sector, specifically, the objectives of the Paris agreement imply immediate, rapid and profound change. However, your financing of upstream oil and gas has increased significantly over the past year. which is quite the opposite of immediate rapid and profound change to finance flows. And as we know, you've said the target of 0 exposure to fossil fuel by 2045. And it's true that the way that your energy policy has been constructed allows you to increase funding to fossil fuels in the medium term. But this does not make it just more and more difficult for you to achieve your 2045 target. And sorry, before you answer, we just -- we understand that Nedbank regards gas is playing a small part in the transition, but only where it supports a transition to a 0 carbon energy system. Meaning only where it supports renewable energy-based power. So how does this increased financing for oil and gas aligned with that understanding and with your commitment to acting in accordance with climate signs. Thank you.

Thank you for both questions. Is there any other question I think those are the only 2 questions. Let me then firstly invite our Chair of our Group Climate Resilience Committee, Brian Dames to reflect on the questions raised and colleagues from ExCo can then fill in where they may feel they need to do so. Brian?

Thank you, Chairman. Just to respond to some of the questions and Mike and the team will add. I think, firstly, in terms of our commitment, in terms of energy policy, none of that has changed, and none of that will be changing from a Board perspective. Looking at the glide path and we would be bringing out that next year. It's really how do we journey from where we are today to where we would like to be in 2035, and where we would like to be importantly, in 2045. And that would put specific parts, targets as to what do we do in the short term, and that will be definitely science-based and informed from that perspective. On the second question, you're absolutely right as to our increase year-on-year around the exposure of oil and gas, limits has increased, the exposures increase. At that level, it's still lower than pre-COVID level of 2029 -- 2019. And so what we're seeing is pretty much the recovery of the post-COVID situation but that level is still lower than pre-COVID. It does not change our commitment at all, but on how do we see the role. And we should look at these sectors differently. We certainly have encouraged management to look at oil differently than how you would look at gas and we should be very careful as a country, as a continent. Gas is a transition. Without gas, alternatives will be coal or things such as nuclear. And we don't think that, that is optimal. We certainly believe that gas is hugely important as a transition, transition for technology to catch up and then in order for us to make sure we have a greater penetration of renewable energy.

Thank you, Brian. Do ExCo members feel the need to add anything. Adequately responded to -- Mike Davis?

As we've discussed Tracy in the past, we're very comfortable to work with Touche in terms of building out those glide paths. And I think collectively, we have the same objective. So happy with the challenge. Hopefully happy with the response, and we'll continue to work with the likes of [ Touche ] to move us and the country forward.

Are you comfortable that you've been adequately answered?

Perhaps just one brief response, which is to say that the concept of gas as a transition fuel is one that we hear from most of the banks and from many other players in the economy. And I think perhaps Nedbank as having essentially set the pace in this whole arena in the South African banking sector. It would be hugely useful, I think, for the country if we had some really clear delineation of what gas as a transition fuel means. What does that actually entail? Because at the moment, it's quite broad. And we're seeing -- could it mean offshore oil and gas, could mean shale gas in the [ crude ] it could car, power ships. So perhaps we could request that Nedbank provides some guidance in its next set of reports on exactly what it means by financing gas as a transition fuel. But thank you very much for your responses.

Well, good. I think that's good counsel that we've received that we will deliberate in further board engagements. I'm not sure [ Jackie ] , if we have any questions on Chorus Call?

We have no questions on the line. Thank you.

Thank you very much. In the hope that we don't have any further questions, are there any perhaps from the webcast?

Chair, we've got questions on the webinar. The first question is from Mr. [ Gordon Lang ]. Good morning, and thank you for the opportunity to engage. At the 15th year-end Biodiversity Conference, COP 15 held in December 2022, the coming Montreal global biodiversity framework to which South Africa is a signatory, recognizes biodiversity loss as a significant threat to humanity's ability to thrive as the climate crisis. The global risk register includes biodiversity loss and ecosystem collapse in the top 5 tenure risks. Nedbank social framework policy and management system recognizes climate change as a key focus area and reports on our as a shareholder, albeit small approach quite extensively. Nedbank's work in the broader sustainability and biodiversity space is admirable. As an example, in 2013, the National Biodiversity and Business Network, NBBN was established with Nedbank as a founding contributor and yet biodiversity does not feature to any significant extent in the annual report as a significant risk of due attention. This is reflected by Nedbank only scoring 1 out of a possible 32 points in the latest 2021 NBBN Biodiversity Performance Protocol Ratings Report. The protocol of which Nedbank through the Green Trust was a funder. Are the Chairman and Board members aware of the risk that biodiversity loss and ecosystem collapse pose to both business and society? And Specifically of the NBBN, BDP and whole biodiversity loss be given the same focus as climate change in Nedbank's risk management approach going forward? Thank you.

Thank you very much for that question from Mr. [ Gordon Lang ]. If I can once more check from a climate resilience committee if there's any response from our chair and then invite ExCo members to also fill in where they deem necessary.

To answer the question is, are we aware, the answer is yes. The natural systems, in particular, natural systems as it affects conservation, the prevention of degradation. And for that matter, the protection of and conservation of biodiversity is included as part of our sustainable development financing criteria. And that is something that we have clearly have top of mind. Now can we do a lot more and do a lot better and segregate some of our reporting out and specific policies on that? Yes, we can. And again, that is exceptionally good guidance for us as a Board and something that we would do going forward.

Thank you, Brian. Exco colleagues, is there anything you may wish to add?

Maybe just two examples. I mean we're busy with the pilot as it relates to TNFD. And in fact, we rolled out biodiversity training in 2022. So to the chair's reference, it is certainly a focus of the organization and perhaps we just need to do better in terms of isolating and reporting specifically on biodiversity. I think there's also quite a strong linkage between climate change and biodiversity. Perhaps it's just a reporting issue.

Thank you very much. I hope we've adequately responded to Mr. Lang. I don't see any further questions on the link.

Chair, we've got a second question from Lameez Omarjee. Analysis of Nedbank's climate report by Just Share indicate that the bank's financing of upstream gas increased more than 250% and that of oil almost doubled. Can Nedbank provide more context on why there has been an increase in financing of these fossil fuels in the past year? Thank you.

Do we feel we would like to answer that? Has it been answered already?

Yes, I think it's been answered. I do think it is useful to provide a little bit of context around upstream gas in particular. And all of these financings, we don't always have control over the level of exposure. If a client has a facility, whether they choose to draw down on it or pay back causes exposure levels to go up or down over time and also as do exchange rates because many of these are dollar-based. So -- but just to share with you, if you take upstream gas, our actual exposure to upstream gas over the last four years at the end of 2019 was 3 billion, at the end of 2020 was 2 billion. At the end of 2021 was 400 million, and then at the end of last year, that increased to 1 billion. So that's the 250% that's being spoken about. You can see we are still materially below the levels of 2019 or 2020.

Thanks, Mike. That was a question raised by Lameez Omarjee from News 24. Is there any other questions I may have missed on my refresh, there's no further questions.

No, Chair.

We thank everybody for those questions that have been raised, including where we were challenged to do more and better. Nedbank always cherishes those kind of positive challenges, as Mike Davis, our CFO, has already indicated.

We would like now to move on to engaging on proposed resolutions for the AGM. I remind shareholders attending in person and via the webcast that you may submit your votes on all resolutions at any time during the meeting. After proposing all resolutions, the voting platform will remain open for a short period to allow you to complete your votes. We now move on to directors' appointment resolutions. The CVs for all the directors has been put to the shareholders for reelection -- for election or reelection are included in the notice of the AGM. Starting with ordinary resolution 1.1 and 1.2, which is the election of directors of the company appointed during the year. The Board appointed Mr. Mteto Nyati or Dr. Mteto Nyati [indiscernible] , Mr. Daniel Mminele, as directors of the company on 1 October 2022 and 1 May 2023, respectively. These directors must retire in terms of Clause 19.2 of the company's Memorandum of Incorporation and being eligible, offer themselves for reelection. I propose that Dr. Mteto Nyati be elected a Director of the company. Please indicate your vote in respect of ordinary resolution 1.1 on your handset and indicate your vote online. [Voting]

Whilst we wait for the indication that everybody is finished voting on that resolution, may I mention also proceed with 1.2 and propose that Daniel Mminele be elected a Director of the company. Please indicate your vote in the respect of Ordinary Resolution 1.2 on your handset or indicate your vote online. [Voting]

The colleagues from Lumi will continue to process those votes and hope that we've given you adequate time to do so. I shall now proceed to ordinary resolution 2.1 to 2.4. Between Lumi and Jackie, you indicate if I'm going too fast. Reelection of directors retiring by rotation. You are now asked to consider the reelection of those directors, retire by rotation in terms of the MOI. The Board supports the reappointment of the directors who are retiring by rotation. The retiring directors, being eligible, who make themselves available for reelection Hubert Brody, Mike Davis, Errol Kruger and Linda Makalima. We shall be dealing with the reelection of each of the retiring directors individually. Under 2.1, I propose that Hubert Brody be reelected a director of the company. And further, 2.2, I propose that Mike Davis be reelected a director of the company. And proposed further under 2.3 that Errol Kruger be reelected a director of the company. And finally, under 2.4, propose that Linda Makalima be reelected a director of the company. Kindly indicate your vote on your handset or indicate your vote online for each resolution. [Voting]

Proceeding then to ordinary resolutions. Resolutions 3.1 and 3.2 relates to the reappointment of independent external auditors. And Ordinary Resolution 3.3 relates to the appointment of KPMG Inc. In a shadow capacity. You are asked to consider the reappointment of the external auditors, Deloitte & Touche, with Ms. Vuyelwa Sangoni as designated registered audit partner and Ernst & Young Incorporated with Mr. Farouk Mohideen as designated registered audit partner for the ensuing year as for the requirements of Section 90 of the Companies Act and the relevant provisions of the Banks Act. Their reappointments have been recommended by the Group Audit Committee with the endorsement of the Nedbank Group Board, taking into account that large banks are currently required to be audited by two sets of auditors. As noted in the stock exchange news service in short, the SENS, announcement released on 28 October 2022. Following a comprehensive tender process, the company intends appointing KPMG Inc., KPMG in short, as one of the joint auditors for the financial year ending 31 December 2024. KPMG will be invited to observe the 31 December 2023 financial statement audit performed by the incumbent joint external auditors from Friday, 2nd of June 2023 in a shadow capacity. In line with the mandatory audit rotation -- audit firm rotation, MAFR in short, the requirements thereof and subject to shareholder approval, Deloitte & Touche will rotate off the company's audit on conclusion of its external audit responsibilities for the year ending 31 December 2023. The future appointment of KPMG and the designated audit partner for the year ending 31 December 2024 are subject to approval by the South African Reserve Bank's prudential authority in accordance with Section 61 of the Banks Act, 94 of 1990 as amended, and will be presented for shareholder vote at the AGM to be held in 2024. In the interest of good governance, the resolution to appoint KPMG in a shadow capacity from 2 June 2023 is being proposed to shareholders. We shall be dealing with the reappointment of each of the external auditors and the appointment of KPMG in a shadow capacity from 2 June 2023 individually. Starting with 3.1, I propose that Deloitte & Touche be and is hereby reappointed as external auditor, to hold office from the conclusion of the 56th Annual General Meeting until the conclusion of the next Annual General Meeting of Nedbank Group. I propose that at Ernst & Young Incorporated be and is hereby reappointed as external auditor, to hold office from the conclusion of the 56th Annual General Meeting until the conclusion of the next Annual General Meeting of Nedbank Group. I proposed that KPMG Inc. be and is hereby appointed in a shadow capacity from 2 June 2023. Please indicate your vote on your handset or indicate your vote online for each resolution. [Voting]

We now proceed to ordinary resolution 4.1 up to 4.5 relating to the appointment of the Nedbank Group Audit Committee members. The Board believes it is good governance for shareholders to vote on the appointment of the members of the Group Audit Committee and has elected to propose the appointment of the Group Audit Committee members annually. The Board is satisfied that the membership of the Group Audit Committee meets the requirements of the Companies Act and the Banks Act and that the committee complies with the relevant regulatory requirements, that the members have the necessary knowledge, skills and experience to enable the committee to perform its duties in terms of these requirements. The Board, therefore, recommends the election of the Group Audit Committee members. We shall be dealing with the election of each of the members individually. I propose that Stanley Subramoney be elected as a member of the Group Audit Committee. I propose that Hubert Brody be elected a member of the Group Audit Committee. And in terms of 4.3, propose that Neo Dongwana be elected a member of the Group Audit Committee. In terms of 4.4, propose that Errol Kruger be elected a member of the Audit Committee. And in terms of 4.5, propose that Phumzile Langeni elected a member of the Group Audit Committee. Please indicate your vote on your handset or indicate your vote online for each resolution. [Voting]

We shall then proceed to ordinary resolution #5 which is the resolution that relates to placing the authorized but unissued ordinary shares under the control of directors. This authority granted to the directors at the last AGM expires at this meeting. In the director's opinion, it is desirable that the unissued ordinary shares should remain under the control of the directors. The Board has reviewed the practice of issuing shares against the merits of acquiring shares in the open market for purposes of meeting the obligations under the Nedbank Group 2005 share option, matched share and restricted share schemes collectively the Nedbank Group 2005 share scheme. The authority to place authorized but unissued shares under the control of the directors will be used only for purposes of the Nedbank Group 2005 share scheme. In the event that in the opinion of the Nedbank Group Board, it was not appropriate for Nedbank Group to acquire shares in the open market. This authority is limited to 6,239,676 shares, representing approximately 1.22% of the number of ordinary shares in issue as at 1 January 2023. It is further limited to existing contractual obligations and issuances under the Nedbank Group 2005 share scheme only. The authority granted in terms of this ordinary resolution will remain valid until the next Annual General Meeting of the ordinary company -- of the company to be held in 2024 at which meeting a similar resolution will be put to shareholders for approval. Accordingly, I propose that the authority is granted to the directors to issue ordinary shares in the share capital of Nedbank Group on such terms and conditions and at such times as they deem fit, subject to the provisions of this resolution, the Companies Act, the Banks Act and the listings requirements of the JSE. I now put the resolution to the meeting. Please indicate your vote on your handset or indicate your vote online. [Voting]

We proceed to advisory endorsements, 6.1 and 6.2 on a non-binding basis of the Nedbank Group Remuneration policy and the Remuneration implementation report. In accordance with the principles of King 4, shareholders are requested to endorse Nedbank Group's Remuneration policy and the implementation thereof. Kindly note that the votes on these advisory endorsements are nonbinding. However, the Board will take cognizance of the outcome of the votes when considering its Remuneration policy and the implementation thereof in future, and we'll seek to engage further with shareholders in the event that either has been voted against by 25% or more of the voting rights exercised by shareholders. I now put the advisory endorsements to the meeting. We shall be dealing with each of the adviser endorsements individually. In terms of 6.1, we request shareholders to endorse through a nonbinding advisory vote to the company's remuneration policy excluding the remuneration of nonexecutive directors for their services as directors and members of the Board committees as set out in the remuneration report contained in the summary consolidated annual financial statements. To endorse -- in terms of 6.2, to endorse through a nonbinding advisory vote, the company's Remuneration implementation report as set out in the Remuneration report contained in the summary of consolidated annual financial statements. Please indicate your vote on your handset or indicate your vote online for each resolution. [Voting]

Special Resolutions 1.1 to 1.11 relates to the approval of the remuneration of nonexecutive directors. In accordance with the Companies Act, shareholders are required to approve the fees paid to directors in respect of their services as directors. I confirm that only nonexecutive directors receive such fees. The proposed fees represent an overall 6% increase. The fees exclude VAT. We shall be dealing with the approval of the various fees payable with effect from 1 July 2023 individually and note that the fees payable to the chairs of the respective Board committees are 2.5x the member fees. As I'm retiring from Nedbank and Nedbank Group Board at the conclusion of this AGM, I'm not conflicted with regards to Special Resolution 1.1 being the Remuneration of the Chair and therefore, I now put the resolution to shareholders. 1.1 is a proposal that the Remuneration of the Chair as set out in the notice, be approved. 1.2 is a proposal that the Remuneration of the leading independent director as set out in the notice, be approved. 1.3, we propose that the Remuneration of the Nedbank Group Board members, as set out in the notice be approved. 1.4 is a proposal that the Remuneration of the Nedbank Group Audit Committee members as set out in the notice be approved. 1.5 proposes that the Remuneration of the Nedbank Group Credit Committee members, as set out in the notice, be approved. In terms of 1.6, I propose that the Remuneration of the Nedbank Group Director's Affairs Committee members, as set out in the notice be approved. 1.7 proposes that the Remuneration of the Nedbank Group Information Technology Committee members, as set out in the notice, be approved. In terms of 1.8, it is proposed that the Remuneration of Nedbank Group Remuneration Committee members, as set out in the notice be approved. 1.9 is a proposal that the Remuneration of the Nedbank Risk and Capital Management Committee members, as set out in the notice, be approved. On 1.10, it is proposed that the Remuneration of Nedbank Group Transformation, Social and Ethics Committee members, as set out in the notice, be approved. In terms of 1.11, it is proposed that the Remuneration of the Nedbank Group Climate Resilience Committee members, as set out in the notice, be approved. Please indicate your vote on your handset or indicate your vote online for each resolution. [Voting]

We then proceed to special resolution 2.1 to 2.3, which is a resolution that deal with the Remuneration of nonexecutive directors appointed as acting group chairperson, acting leading independent director or Acting Committee Chairperson. As detailed in the notice, the Board wishes to acknowledge the additional responsibilities and time commitments for nonexecutive directors who may in exceptional circumstances, be required to perform the role of Acting Group Chairperson of the Nedbank Board, Acting Lead Independent Director or Acting Board Committee Chairperson for extended periods of time. Although the appointments to an acting position would only arise in exceptional circumstances, the Board would like the flexibility to consider and if deemed appropriate, the ability to Remunerate that director appropriately for the additional responsibilities and time commitments. The Board, therefore, proposes the payment of an additional fee to nonexecutive directors who are required to perform an acting role. These fees would be in addition to the normal nonexecutive directors' fees as detailed in Special Resolution 1. The payment of additional fees to any nonexecutive director appointed to an acting role will be subject to prior approval by the Nedbank Group Remuneration Committee, who will consider the relevant circumstances and the extent of additional commitments on a case-by-case basis. We shall be dealing with the approval of the fees payable to nonexecutive directors who may be required to perform the role of acting group chairperson of the Nedbank Board, Acting Lead Independent Director or Acting Board Committee Chairperson individually. These resolutions, if approved, will be with effect from the conclusion of this AGM until the conclusion of the next AGM. I propose that the resolution, the Remuneration of any Board member in terms of resolution 2.1, who may be appointed as the Acting Group Chairperson as set out in the notice, be approved. In terms of Resolution 2.2, we propose that the remuneration for any Board member who may be appointed as Acting Lead Independent Director as set out in the notice, be approved. 2.3, I propose that the remuneration for any Board member appointed as Acting Committee Chairperson as set out in the notice, be approved. Please indicate your vote on your handset or indicate your vote online for each resolution. [Voting]

As you do so, we proceed to Resolution 3 -- Special Resolution 3, which relates to the general authority to repurchase ordinary shares. In terms of the company's Act , the JSE Listings Requirements and the MOI, the shareholders may authorize the directors by way of a general authority to acquire shares in the capital of the company subject to certain limitations. This resolution is a renewal of an existing authority, which was granted at the last Annual General Meeting held in May 2022. I now propose that the general authority to repurchase ordinary shares be granted, and I put the resolution to the meeting. Please indicate your vote on your handset or indicate your vote online. [Voting]

We proceed then to Special Resolution 4, which is the general authority to provide financial assistance to related and interrelated companies. The Company's Act requires the approval by shareholders for the provision of financial assistance in certain circumstances. Both Sections 44 and 45 of the Companies Act provide, among others, that such financial assistance may only be provided pursuant to a special resolution passed by shareholders within the previous 2 years. Furthermore, the provision of any such financial assistance is subject to the solvency and liquidity test as referred to in the Companies Act. I now propose that authority be granted for the company to provide financial assistance to related and interrelated companies as contemplated in the Companies Act. I put the resolution to the meeting. Please indicate your vote on your handsets or indicate your vote online for each resolution. [Voting]

Special Resolution 5 relates to the amendments to the rules of the Nedbank Group 2005 share option, matched share and restricted share schemes collectively known as the Nedbank Group 2005 share scheme. The rules of the Nedbank Group 2005 share scheme were first adopted by shareholders on 4 May 2005, and then replaced on 10 May 2018 with certain amendments approved by the Nedbank Group shareholders on 28 May 2021 in terms of the rules. Special Resolution 5 proposes that the long-term incentive, LTI retention awards be replaced with individual performance awards throughout the rules of the 2005 share scheme. Individual performance awards are defined as any options, matched awards or restricted awards, which are subject to the requirement that the participant is still in the employ of the group at the vesting date and which awards may be subject to a minimum individual performance standard as specified by RemCo. This amendment eliminates retention rewards, which are only time-based. Following this amendment, only Performance Awards which are subject to corporate performance targets and individual performance awards that are subject to an individual performance standard as specified by the Group Remuneration Committee may be issued. Consequent to this amendment, all the vesting criteria for all LTI awards issued by Nedbank Group in 2023 vesting in 2026 will be performance-based. In addition, the Nedbank Group further proposes to amend Clause 28 of the rules of the 2005 share scheme. The proposed amendment deems that any shares received by a scheme participant pursuant to an unbundling transaction will be restricted shares subject to the same conditions applicable to the restricted awards. The amendments to the rules have been approved by the JSE. A copy of the rules with the proposed amendments initialled and signed on the front cover by the Group Chair of the Board with proposed amendments highlighted for ease of reference may be requested from the company's secretary. I propose that the reference to retention awards in Nedbank Group 2005 share scheme be and is hereby replaced with individual performance awards and that a minimum individual performance standard be added as a condition to options, matched awards and restricted awards as may be specified by RemCo. I propose that the wording of Clause 28, including sub clauses 28.2 and 28.3 and the inclusion of new subclauses 28.4 and 28.5 of the Nedbank Group 2005 share scheme as set out in the notice, be amended. Please indicate your vote on your handset or indicate your vote online for each resolution. [Voting]

Proceeding with Special Resolution 6, which is about creation of new preference shares. Nedbank Limited, NBL issued 358,277,491 nonredeemable, noncumulative nonparticipating variable rate preference shares with a nominal value of ZAR 0.01 each in several tranches between 2002 to 2010, under the then prevailing Basel II requirements preference shares. Regulation 38, 11C of the BA700 regulations relating to banks, Regulation 38 highlights the phasing out of specified hybrid debt instruments, qualifying as Tier 1 capital where the instruments of shares were issued either prior to 12 September 2010 or 1 January 2013, the preference shares qualified as Tier 1 instruments. These instruments were phased out by 10% per annum between 1 January 2013 and 31 December 2021, and referred to as grandfathering. The preference shares contribution towards regulatory capital reduced over this time as a result of the grandfathering. Accordingly, with effect from 1 January 2022, NBL would not have derived any regulatory capital benefit associated with the preference shares. Therefore, NBL deemed it appropriate to not continue having the preference shares as part of its issued share capital and repurchased the preference shares in December 2021. This is, however -- there is, however, a shortage of dividend yielding investment products in the market for corporates and high net worth individuals who are seeking a dividend return. The annuity return provided by these preference share products has also proven to be a very attractive feature to investors. As a result, we are proposing that Nedbank Group creates and subject to board and regulatory approval, issue perpetual preference shares as the Additional Tier 1, AT1 preference shares which would also qualify as AT1 capital in terms of Basel III regulatory requirements. This will both supplement the company's capital buffer and continue to provide an attractive product offering to the market. The terms to these preference shares are set out in Annexure 1 of the notice of the AGM. Accordingly, I propose that the creation of 200,000 A nonredeemable, noncumulative, non-participating perpetual preference shares in Nedbank Group had a nominal value of ZAR 1 million per preference share be and is hereby approved. I'll now put the resolution to the meeting. Please indicate your vote on your handset or indicate your vote online. [Voting]

Special Resolution 7 relates to the amendments to the Memorandum of Incorporation, MOI, and terms of the A non-redeemable, non-cumulative, non-participating, perpetual preference shares. The rationale for passing this special resolution is to amend the MOI of Nedbank Group to allow for the creation of new preference shares as voted for in Special Resolution 6 and to include the terms of the new preference shares as set out in Annexure 1 of this notice in Nedbank Group's MOI. The amendments to the MOI have been approved by the JSE, the MOI is available for inspection at the registered office of Nedbank Group. I propose that subject to the passing of special resolution 6, the existing MOI of Nedbank Group B and is hereby amended by the inclusion of A non-redeemable, non-cumulative, non-participating perpetual preference shares. The amendments which were tabled at the meeting, initialed by the Group Chair of the meeting for the purposes of identification which effects from the date of filing of the notice of amendment with the companies and Intellectual Property Commission, I therefore put the resolution to the meeting. Please indicate your vote on your handset or indicate your vote online. [Voting]

We shall then proceed to Ordinary Resolution 6, placing the unauthorized -- sorry, the authorized but unissued A non-redeemable, non-cumulative, non-participating, perpetual preference shares under the control of directors. Subject to the passing of Special Resolution 6, Ordinary Resolution 6 is proposed in accordance with the terms of MOI, subject to the provisions of the Company's Act 71 of 2008. The Bank Act 94 of 1990, as amended, and the JSE Listing Requirements. The authority granted in terms of this Ordinary Resolution will remain valid until the next AGM of the company to be held in 2024. I now propose that the Board be and is hereby authorized as it is in its discretion, things deems fit and subject to the passing of special resolution 6 to issue up to 200,000 A non-redeemable, non-cumulative, non-participating perpetual preference shares of ZAR 1 million each in the share capital of the company subject to the provisions of the Company's Act 71 of 2008, the Banks Act 94 of 1990 as amended and the JSE Listings Requirements. I now put the resolution to the meeting. Please indicate your vote on your handset or indicate your vote online. [Voting]

All proposed resolutions have now been put to shareholders. The voting platforms will remain open for a further three minutes for you to complete your votes. Thereafter, all votes are closed, and the scrutineers will record the votes and provide the results. While we wait for the scrutineers to final the voting results, Ms. Linda Makalima in her role as the Chairperson of the Group Transformation, Social and Ethics Committee has arranged for a short video, which showcases some of Nedbank CSI activities for shareholders' information, and we shall now present the video to you. [Presentation]

We hope you find that video as heartwarming as some of us find it, demonstrating how Nedbank lives up to its purpose of being financial experts who do good. We now proceed towards the end. The scrutineers have confirmed that all resolutions have been passed by the requisite majority. However, the Advisory Endorsement 6.2 to endorse the company's Remuneration Implementation Report was voted against by 25.3% of the voting rights exercised by shareholders, which is shy of the -- has been below the 25%. And so the Board takes cognizance of this and will engage further with shareholders in this regard. Details of which will be provided on the SENS. Before I declare this meeting closed, I want to thank the Board, management and staff or their contributions. Shareholders are reminded that the general meeting relating to the Odd-lot offer to the Nedbank Group Limited Odd-lot shareholders will commence at 10:30 in a few minutes. A slide is displayed on the screen for shareholders attending via the webcast and via teleconference indicating how to join the general meeting for the Odd-lot offer. As all the business on the agenda has been dealt with and noting that the detailed voting results will be published on the SENS later this morning, I now formally close the proceedings of this 56th Annual General Meeting of Nedbank Group Limited. Thank you for your attendance, and we are adjourned.