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IFC and AfDB Provide R2 Billion to Nedbank to Support Sustainable Economic Growth
Johannesburg, July 2, 2007- IFC, the private sector arm of the World Bank Group, and the African Development Bank (AfDB) will subscribe to a R2 billion Tier ll capital qualifying bond issued by Nedbank, the three institutions announced today.
Nedbank will use the capital - R1 billion each from IFC and the AfDB - to increase lending to under-served markets in the region, including affordable housing development, black economic empowerment (BEE) transactions, smaller businesses, large-scale infrastructure and resource extraction projects and the agribusiness sector.
The investments by the IFC and AfDB in these bonds will be for a minimum of 10 years. This will be Nedbank's first major offshore funded Tier ll issue. IFC's investment will be its largest to date in Sub-Saharan Africa's financial markets. This will also be the first time the AfDB will subscribe to Tier ll capital in Africa. The bond was competitively priced on a floating basis.
"This investment will enable Nedbank to continue lending in sectors where we have a proven track-record of sustainable delivery," said Tom Boardman, chief executive of Nedbank Group. "Sustainability is about ensuring financial prosperity and stability for shareholders and staff, while integrating social and environmental responsibility into the local communities in the countries in which we operate. At the same time we need to remain relevant and accessible to our clients," he said.
In the past three years Nedbank has invested over R5.2 billion in low income housing, more than R1.2 billion in transformational infrastructure and over R1 billion in the development of small and medium enterprises. The group has also financed over R8.5 billion in BEE transactions, which facilitate transfer of ownership to previously disadvantaged individuals and communities in South Africa, in addition to its own BEE transaction worth R3.1 billion.
"IFC is pleased to partner with institutions that share our sustainable development values," said James Scriven, IFC Associate Director for Global Financial Markets. "IFC, the AfDB and Nedbank share the objective of increasing social and environmental awareness in the financial sector, helping to contribute to more sustainable economic development across Africa."
"The AfDB is pleased to build on its existing partnership with Nedbank, which was established in 2005," says Mandla Gantsho, the AfDB Vice President, Infrastructure, Private Sector and Regional Integration. "This is a landmark transaction for us, as it is the first time that the AfDB has provided Tier II capital, which is a critical element in increasing the risk bearing capacities of banks, as they expand services to reach under-served markets," he said
"In this regard, the AfDB is also pleased to have collaborated with the IFC and leveraged each others capacities in contributing to the strengthening of the financial sector here in South Africa, and going forward across Africa," he added
Nedbank's commitment to sustainability was recognised in June at the 2007 Sustainable Banking Awards, where it received the award for the emerging markets sustainable bank of the year in the Middle East and Africa. Now in their second year, the awards were created by the Financial Times in association with IFC to recognise banks that have shown leadership and innovation in integrating social, environmental and corporate governance objectives into their operations.
Nedbank is the only bank in Africa that has adopted the Equator Principles, a voluntary set of guidelines for managing social and environmental issues related to the financing of development projects, which are based on IFC's performance standards. Launched by 10 banks in June 2003, the principles were revised in June 2006 and have been adopted to date by more than 50 financial institutions.
About Nedbank Group
Nedbank Group is a bank holding company which operates as one of the four largest banking groups in South Africa through its principal banking subsidiary, Nedbank Limited. The group has been listed on the JSE Limited since 1969. A wide range of wholesale and retail banking services are offered through its three main business units - Nedbank Corporate, Nedbank Capital and Nedbank Retail. Nedbank Group is positioned to be a 'bank for all' in southern Africa.
About the African Development Bank
The AfDB is a multilateral development bank whose shareholders include 53 African countries (regional member countries - RMCs) and 24 non-African countries from the Americas, Asia and Europe (non-regional member countries-non-RMCs). It was established in 1964, and officially began operations in 1967. The AfDB's private sector window was established in 1991 with the objective of broadening the scope of development assistance to regional member countries (RMCs) in recognition of the important role of the private sector in stimulating economic growth and development. For more information, please visit www.afdb.org
IFC, the private sector arm of the World Bank Group, promotes open and competitive markets in developing countries. IFC supports sustainable private sector companies and other partners in generating productive jobs and delivering basic services, so that people have opportunities to escape poverty and improve their lives. Through FY06, IFC Financial Products has committed more than $56 billion in funding for private sector investments and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. IFC Advisory Services and donor partners have provided more than $1 billion in program support to build small enterprises, to accelerate private participation in infrastructure, to improve the business enabling environment, to increase access to finance, and to strengthen environmental and social sustainability. For more information, please visit www.ifc.org
For further information kindly contact
Chief Financial Officer
Tel +27 11 294 9999 Markus Borner
Nedbank Group Capital Management
Tel +27 11 295 8616 Cecilia De Almeida
Nedbank Media Relations
Tel +27 11 294 0371/083 325 9169 IFC
Phone: +27 11 731 3175
E-mail: email@example.com In Washington, D.C.
Phone +1 202 458 0952
Technical Contact: Bhargav Purohit
Tel: +216 71 10 2499 Monojeet Pal
Tel: +216 71 10 3498 AfDB Media Contact: Onike Nicol
Tel: +216 7110 3227