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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Nmbz Holdings Ld | LSE:NMB | London | Ordinary Share | ZW0009011389 | ORD ZWR0.25 (UK REG) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.00 | - |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMNMB
RNS Number : 6596S
NMBZ Holdings Ld
21 March 2016
NMBZ HOLDINGS LIMITED
Holding company of
NMB BANK LIMITED (Registered Commercial Bank)
CONDENSED AUDITED RESULTS
FOR THE YEAR ENDED 31 DECEMBER 2015
HIGHLIGHTS
Hot Features
Premium
31 December 31 December
2015 2014
--------------------------- ------------ ------------
Total income (US$) 59 396 619 48 078 454
--------------------------- ------------ ------------
Operating profit before
impairment charge (US$) 17 405 739 7 442 884
--------------------------- ------------ ------------
Attributable profit (US$) 5 490 068 1 667 247
--------------------------- ------------ ------------
Basic earnings per share
(US cents) 1.43 0.43
--------------------------- ------------ ------------
Total deposits (US$) 277 216 769 235 362 677
--------------------------- ------------ ------------
Total gross loans and
advances (US$) 243 241 018 217 463 319
--------------------------- ------------ ------------
Total shareholders' funds
(US$) 50 543 864 45 047 616
--------------------------- ------------ ------------
Enquiries:
NMBZ HOLDINGS LIMITED
Benefit P Washaya, Chief Executive Officer, NMBZ Holdings Limited benefitw@nmbz.co.zw
Benson Ndachena, Chief Finance Officer, NMBZ Holdings Limited bensonn@nmbz.co.zw
Website: http://www.nmbz.co.zw
Email: enquiries@nmbz.co.zw
Telephone: +263-4-759 651/9
NMBZ HOLDINGS LIMITED
CHAIRMAN'S STATEMENT
INTRODUCTION
The Group has continued to make significant progress towards attaining its short and medium term goals and recorded an attributable profit of US$5 490 068 in 2015 which was a material improvement from an attributable profit of US$1 667 247 recorded in 2014. The significant improvement in the operating results was largely underpinned by the bank's decision to broaden its target market, stricter credit underwriting standards and concerted efforts to contain non-performing loans.
The deflationary pressures and the fall in aggregate demand, which accelerated in the last quarter of 2014, persisted into 2015. The economy has continued to be characterised by shortage of liquidity, retrenchments and company closures and these have further worsened default risk.
STRATEGIC FOCUS
In line with our mission to provide premium financial services to high networth individuals, businesses and uniquely branded technology enabled products to SMEs and the broader market segments, the Board has periodically reviewed this strategic focus in response to changes in the global, regional and local operating environments. The Board is confident that based on a number of probable scenarios considered, the Group is firmly on course to attaining its short and medium term strategic targets.
GROUP RESULTS
Financial performance
The profit before taxation was US$7 909 138 during the period under review and this gave rise to an attributable profit of US$5 490 068 which translates to earnings per share of 1.43 cents (2014 - 0.43 cents).
Operating expenses amounted to US$26 872 649 and these were down 4% from a prior year of US$27 984 051 as a net result of cost cutting and containment measures.
Impairment losses on loans and advances amounted to US$9 496 601 for the current period from a prior year of US$5 017 362 and the increase was mainly due to increased provisioning as the economic environment continues to deteriorate. The Board took a decision to write off loans and advances amounting to US$11 704 157 during the year under review after recovery efforts had not yielded the desired results.
Financial position
The Group's total assets grew by 17% from US$286 049 034 as at 31 December 2014 to US$333 831 107 as at 31 December 2015.
Gross loans and advances increased by 12% from US$217 463 319 as at 31 December 2014 to US$243 241 018 as at 31 December 2015 mainly due to an increase in loans advanced to the broader market segments. The Bank's non-performing loans ratio reduced to 13.19% at 31 December 2015 from 17.74% at 31 December 2014.
The deposits increased by 18% from US$235 362 677 as at 31 December 2014 to US$277 216 769 as at 31 December 2015 as a result of a 22% increase in current and deposit accounts.
The Bank's liquidity ratio closed the period at 30.37% and this was above the statutory requirement of 30%.
NMBZ HOLDINGS LIMITED
Capital
The banking subsidiary's capital adequacy ratio at 31 December 2015 calculated in accordance with the guidelines of the Reserve Bank of Zimbabwe (RBZ) was 19.26% (31 December 2014 - 19.32%). The minimum required by the RBZ is 12%. We consider the level of our capitalisation to be adequate to support our underwriting pipeline business.
The Group's shareholders' funds have increased by 12% from US$45 047 616 as at 31 December 2014 to US$50 543 864 as at 31 December 2015 as a result of the current year's attributable profit.
The Bank's regulatory capital as at 31 December 2015 was US$42.1 million and is in line with our target to meet the required minimum regulatory capital of US$100 million for a Tier 1 bank by 31 December 2020 subject to the projected improvement in the operating environment in the forecast period.
DIVIDEND
In view of the need to retain cash in the business and to strengthen the statutory capital requirements for the banking subsidiary, the Board has proposed not to declare a dividend.
CORPORATE SOCIAL INVESTMENTS
We are committed to playing an active role in the communities we serve. Our social investments during the year were channelled into the country's educational system, the disadvantaged, vulnerable groups, protection of the environment, wildlife conservation, the arts and various sporting disciplines. The activities and charities supported during the year included Ruvarashe Trust, Nhaka Yevana Trust, Birdlife Zimbabwe, Island Hospice, Manicaland Tennis tournament, Harare International Festival of the Arts (HIFA), the Nomads Golf tournament and other charity golf tournaments. In addition, we sponsored signage for 20 schools in Harare, Bulawayo and Concession as our way of supporting the country's educational system.
CORPORATE DEVELOPMENTS
Three new branches were opened in Kwekwe, Masvingo and Borrowdale (Harare). The Borrowdale Excellence Centre caters for the bank's high networth customers and this service is also available at all our branches in the major cities and towns.
DIRECTORATE
Mr. T. N. Mundawarara resigned as a director of NMBZ Holdings Limited and NMB Bank Limited with effect from 19 March 2015. Mr. A.M.T. Mutsonziwa and Mr. J. Chigwedere retired and did not seek re-election at the Annual General Meeting held on 21 May 2015. Mr. R. Keighley resigned as a director of the NMBZ Holdings Limited and NMB Bank Limited boards with effect from 3 July 2015. Mr. B. W. Madzivire resigned as a director of both NMBZ Holdings Limited and NMB Bank Limited boards with effect from 31 December 2015. I would like to thank them all for the immense and invaluable contributions they made to the boards over the years.
Ms. J. Maguranyanga, Mr. E. Sanderson, Mr. K. Qurashi and Mr. C. Chikaura were appointed to the boards of NMBZ Holdings Limited and NMB Bank Limited with effect from 10 July 2015, 13 August 2015, 19 August 2015 and 24 December 2015 respectively. I would like to welcome the new board members and wish them a successful tenure.
NMBZ HOLDINGS LIMITED
OUTLOOK AND STRATEGY
As initiated in September 2014, the Group continued to broaden the market catchment segment for the banking subsidiary by tapping into some segments of the mass market. The uptake of the mass market products has been phenomenal and the Group will continue to focus on growth opportunities available in this sector without compromising the service excellence which is synonymous with our flagship bank. Our key differentiators in the financial services sector will continue to be service excellence, technology leadership, agility and quick response times and all these will be buttressed by our experienced and diversified human capital.
POST YEAR END DEVELOPMENTS
Following the decision by Commerzbank to cease the USD clearing business for Zimbabwean banks by 31 March 2016, we changed our correspondent bank. Consequently, our customers can now receive USDs from offshore sources using our new accounts with Ecobank International, France or Bank of China, South Africa. We are committed to a smooth transition and sincerely apologise for any inconveniences caused to our valued customers. Given the swift action taken by management, the impact on the Bank's operations has been minimal.
APPRECIATION
I would like to express my sincere gratitude and appreciation to our valued clients who have continued to support us during this transition to become a mass market bank, our shareholders and the regulatory authorities for their valuable support during the period under review. My appreciation also goes to my fellow board members, management and staff for their continued dedication and commitment which has underpinned the achievement of these results in the face of an increasingly difficult operating environment.
B. A. CHIKWANHA
CHAIRMAN
15 March 2016
NMBZ HOLDINGS LIMITED
AUDITOR'S STATEMENT
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These financial results should be read in conjunction with the complete set of financial statements for the year ended 31 December 2015, which have been audited by KPMG Chartered Accountants (Zimbabwe) and an unmodified opinion issued thereon. The auditor's report on the financial statements which forms the basis of these financial results is available for inspection at the Holding Company's registered office.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2015
31 December 2015 31 December
2014
------------------------- ----- ----------------- ----------------
US$ US$
------------------------- ----- ----------------- ----------------
Note
------------------------- ----- ----------------- ----------------
Interest income 4 35 761 355 31 072 461
------------------------- ----- ----------------- ----------------
Interest expense (15 118 231) (12 651 519)
------------------------- ----- ----------------- ----------------
--------------- --------------
------------------------- ----- ----------------- ----------------
Net interest income 20 643 124 18 420 942
------------------------- ----- ----------------- ----------------
Fee and commission
income 5.1 20 984 694 15 121 536
------------------------- ----- ----------------- ----------------
Net foreign exchange
gains 1 416 445 1 822 432
------------------------- ----- ----------------- ----------------
-------------- --------------
------------------------- ----- ----------------- ----------------
Revenue 43 044 263 35 364 910
------------------------- ----- ----------------- ----------------
Non-interest income 5.2 1 234 125 62 025
------------------------- ----- ----------------- ----------------
Operating expenditure 6 (26 872 649) (27 984 051)
------------------------- ----- ----------------- ----------------
Impairment losses
on loans,
------------------------- ----- ----------------- ----------------
advances and debentures 17.3 (9 496 601) (5 017 362)
------------------------- ----- ----------------- ----------------
--------------- ---------------
------------------------- ----- ----------------- ----------------
Profit before taxation 7 909 138 2 425 522
------------------------- ----- ----------------- ----------------
Taxation 7 (2 422 040) (768 455)
------------------------- ----- ----------------- ----------------
--------------- --------------
------------------------- ----- ----------------- ----------------
Profit for the period 5 487 098 1 657 067
------------------------- ----- ----------------- ----------------
Other comprehensive
income,
------------------------- ----- ----------------- ----------------
net of tax 5.3 2 970 10 180
------------------------- ----- ----------------- ----------------
------------ -------------
------------------------- ----- ----------------- ----------------
Total comprehensive
income for the
year 5 490 068 1 667 247
------------------------- ----- ----------------- ----------------
======= ========
------------------------- ----- ----------------- ----------------
Earnings per share
(US cents)
------------------------- ----- ----------------- ----------------
- Basic 9.3 1.43 0.43
------------------------- ----- ----------------- ----------------
- Diluted basic 9.3 1.33 0.40
------------------------- ----- ----------------- ----------------
NMBZ HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2015
31 December 31 December
2015 2014
--------------------------- ------- ------------------------------------ ------------------------------
Note US$ US$
--------------------------- ------- ------------------------------------ ------------------------------
SHAREHOLDERS' FUNDS
--------------------------- ------- ------------------------------------ ------------------------------
Share capital 10.2.1 78 598 78 598
--------------------------- ------- ------------------------------------ ------------------------------
Capital reserves 19 546 840 19 093 810
--------------------------- ------- ------------------------------------ ------------------------------
Retained earnings 15 169 029 10 131 991
--------------------------- ------- ------------------------------------ ------------------------------
-------------- -------------
--------------------------- ------- ------------------------------------ ------------------------------
Total equity 34 794 467 29 304 399
--------------------------- ------- ------------------------------------ ------------------------------
Redeemable ordinary
shares 11 14 335 253 14 335 253
--------------------------- ------- ------------------------------------ ------------------------------
Subordinated term
loan 12 1 414 144 1 407 964
--------------------------- ------- ------------------------------------ ------------------------------
-------------- --------------
--------------------------- ------- ------------------------------------ ------------------------------
Total shareholders'
funds 50 543 864 45 047 616
--------------------------- ------- ------------------------------------ ------------------------------
-------------- --------------
--------------------------- ------- ------------------------------------ ------------------------------
LIABILITIES
--------------------------- ------- ------------------------------------ ------------------------------
Deposits and other
liabilities 13.1 283 287 243 241 001 418
--------------------------- ------- ------------------------------------ ------------------------------
--------------- ----------------
--------------------------- ------- ------------------------------------ ------------------------------
Total shareholders'
funds and liabilities 333 831 107 286 049 034
--------------------------- ------- ------------------------------------ ------------------------------
========= ==========
--------------------------- ------- ------------------------------------ ------------------------------
ASSETS
--------------------------- ------- ------------------------------------ ------------------------------
Cash and cash equivalents 15 63 439 347 54 750 561
--------------------------- ------- ------------------------------------ ------------------------------
Current tax asset 23 075 1 436 974
--------------------------- ------- ------------------------------------ ------------------------------
Investment securities 14.1 14 547 992 3 874 525
--------------------------- ------- ------------------------------------ ------------------------------
Investment in debentures 16 - 4 614 047
--------------------------- ------- ------------------------------------ ------------------------------
Loans, advances and
other assets 17.1.1 235 088 981 203 363 052
--------------------------- ------- ------------------------------------ ------------------------------
Non-current assets
held for sale 18 2 264 300 2 267 300
--------------------------- ------- ------------------------------------ ------------------------------
Quoted and other
investments 14.4.1 146 025 208 681
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--------------------------- ------- ------------------------------------ ------------------------------
Investment in associates 23 - -
--------------------------- ------- ------------------------------------ ------------------------------
Investment properties 8 125 800 4 453 300
--------------------------- ------- ------------------------------------ ------------------------------
Intangible assets 19 1 689 385 1 950 733
--------------------------- ------- ------------------------------------ ------------------------------
Property and equipment 20 6 601 086 6 345 267
--------------------------- ------- ------------------------------------ ------------------------------
Deferred tax assets 1 905 116 2 784 594
--------------------------- ------- ------------------------------------ ------------------------------
---------------- ----------------
--------------------------- ------- ------------------------------------ ------------------------------
Total assets 333 831 107 286 049 034
--------------------------- ------- ------------------------------------ ------------------------------
========= =========
--------------------------- ------- ------------------------------------ ------------------------------
NMBZ HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2015
Share Share Share option Regulatory Retained
--------------------- ------------ -------------- ------------- ------------- -------------- ---------------
Capital Premium Reserve Reserve Earnings Total
--------------------- ------------ -------------- ------------- ------------- -------------- ---------------
US$ US$ US$ US$ US$ US$
--------------------- ------------ -------------- ------------- ------------- -------------- ---------------
Balances at 1
January 15 737 2 154 27 620
2014 78 598 548 45 671 252 9 604 191 260
--------------------- ------------ -------------- ------------- ------------- -------------- ---------------
Total comprehensive
income for the year - - - - 1 667 247 1 667 247
--------------------- ------------ -------------- ------------- ------------- -------------- ---------------
Impairment allowance
for loans and 1 139 (1 139
advances - - - 447 447) -
--------------------- ------------ -------------- ------------- ------------- -------------- ---------------
Share options issued - - 16 892 - - 16 892
--------------------- ------------ -------------- ------------- ------------- -------------- ---------------
---------- ------------ ------------ ------------ ------------- --------------
--------------------- ------------ -------------- ------------- ------------- -------------- ---------------
Balances at 31
December 15 737 3 293 10 131 29 304
2014 78 598 548 62 563 699 991 399
--------------------- ------------ -------------- ------------- ------------- -------------- ---------------
Total comprehensive
income for the year - - - - 5 490 068 5 490 068
--------------------- ------------ -------------- ------------- ------------- -------------- ---------------
Impairment allowance
for loans and
advances - - - 453 030 (453 030) -
--------------------- ------------ -------------- ------------- ------------- -------------- ---------------
----------- ------------- ------------ ------------ ------------- --------------
--------------------- ------------ -------------- ------------- ------------- -------------- ---------------
Balances at 31
December 15 737 3 746 15 169 34 794
2015 78 598 548 62 563 729 029 467
--------------------- ------------ -------------- ------------- ------------- -------------- ---------------
====== ======== ======= ======= ======== ========
--------------------- ------------ -------------- ------------- ------------- -------------- ---------------
NMBZ HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2015
31 December 31 December
2015 2014
------------------------------------- --------------- -----------------
US$ US$
------------------------------------- --------------- -----------------
CASH FLOWS FROM OPERATING
ACTIVITIES
------------------------------------- --------------- -----------------
Profit before taxation 7 909 138 2 425 522
------------------------------------- --------------- -----------------
Non-cash items:
------------------------------------- --------------- -----------------
-Depreciation 1 690 902 1 899 047
------------------------------------- --------------- -----------------
-Amortisation of intangible
assets 509 687 337 118
------------------------------------- --------------- -----------------
-Impairment losses on loans,
advances and debentures 118
16 645 810 9 496 601 5 017 362
------------------------------------- --------------- -----------------
-Investment properties fair
value adjustment (118 278) (37 800)
------------------------------------- --------------- -----------------
-Quoted and other investments
fair value adjustment 62 654 13 372
------------------------------------- --------------- -----------------
-Loss/(profit) on disposal
of property and equipment 46 924 (6 274)
------------------------------------- --------------- -----------------
-Loss on disposal of property
and equipment (included in
staff costs) 68 470 177 413
------------------------------------- --------------- -----------------
-Profit on disposal of investment (635 500) -
properties
------------------------------------- --------------- -----------------
-Non-current assets held
for sale fair value adjustments 3 000 (3 000)
------------------------------------- --------------- -----------------
-Impairment/(impairment reversal)
on land and buildings 44 200 (46 900)
------------------------------------- --------------- -----------------
-------------- --------------
------------------------------------- --------------- -----------------
Operating cash flows before
changes in operating assets
and liabilities 19 077 798 9 775 860
------------------------------------- --------------- -----------------
Changes in operating assets
and liabilities
------------------------------------- --------------- -----------------
Deposits and other liabilities 42 285 825 24 959 709
------------------------------------- --------------- -----------------
Loans, advances and other
assets (41 222 530) (27 064 142)
------------------------------------- --------------- -----------------
Investment in debentures 4 614 047 (629 324)
------------------------------------- --------------- -----------------
-------------- ---------------
------------------------------------- --------------- -----------------
Net cash generated from operations 24 755 140 7 042 103
------------------------------------- --------------- -----------------
-------------- --------------
------------------------------------- --------------- -----------------
Taxation
------------------------------------- --------------- -----------------
Corporate tax paid (37 843) (422 299)
------------------------------------- --------------- -----------------
Capital gains tax paid (91 850) (8 500)
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------------------------------------- --------------- -----------------
-------------- ---------------
------------------------------------- --------------- -----------------
Net cash inflow from operating
activities 24 625 447 6 611 304
------------------------------------- --------------- -----------------
CASH FLOWS FROM INVESTING
ACTIVITIES
------------------------------------- --------------- -----------------
Acquisition of property and
equipment (2 271 943) (992 076)
------------------------------------- --------------- -----------------
(Acquisition)/maturity of
investment securities (10 673 466) 810 946
------------------------------------- --------------- -----------------
Proceeds on disposal of property
and equipment 101 767 10 177
------------------------------------- --------------- -----------------
Acquisition of intangible
assets (248 339) (623 482)
------------------------------------- --------------- -----------------
Proceeds on disposal of investment 5 380 000 -
properties
------------------------------------- --------------- -----------------
Proceeds on disposal of non-current
asset held for sale - 39 000
------------------------------------- --------------- -----------------
Acquisition of investment
properties (8 230 860) (30 200)
------------------------------------- --------------- -----------------
-------------- ----------------
------------------------------------- --------------- -----------------
Net cash outflow from investing
activities (15 942 841) (785 635)
------------------------------------- --------------- -----------------
-------------- ----------------
------------------------------------- --------------- -----------------
Net cash inflow before financing
activities 8 682 606 5 825 669
------------------------------------- --------------- -----------------
-------------- ----------------
------------------------------------- --------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES
-------------------------------------- --------------- -----------------
Payment of interest on subordinated
term loan (128 496) (218 413)
-------------------------------------- --------------- -----------------
Interest capitalised on subordinated
term loan 134 676 140 487
-------------------------------------- --------------- -----------------
Proceeds on disposal of unquoted
investment - 130 835
-------------------------------------- --------------- -----------------
----------- ---------------
-------------------------------------- --------------- -----------------
Net cash inflow from financing
activities 6 180 52 909
-------------------------------------- --------------- -----------------
---------- ---------------
-------------------------------------- --------------- -----------------
Net increase in cash and cash
equivalents 8 688 786 5 878 578
-------------------------------------- --------------- -----------------
Cash and cash equivalents at 54 750 48 871
beginning of the year 561 983
-------------------------------------- --------------- -----------------
-------------- ----------------
-------------------------------------- --------------- -----------------
Cash and cash equivalents at 63 439 54 750
the end of the year (Note 15) 347 561
-------------------------------------- --------------- -----------------
======== =========
-------------------------------------- --------------- -----------------
NMBZ HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2015
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2014
1. REPORTING ENTITY
The Holding Company is incorporated and domiciled in Zimbabwe and is an investment holding company. Its registered office is 64 Kwame Nkrumah Avenue, Harare. Its principal operating subsidiary is engaged in commercial and retail banking.
2. ACCOUNTING CONVENTION
Statement of compliance
The condensed financial statements are prepared and presented on the basis that they reflect the information necessary to be a fair summary of the annual financial statements from which they are derived. This includes financial results that agree with or can be recalculated from the related information in the audited consolidated financial statements and that contain the information necessary so as not to be misleading in the circumstances. The information contained in these financial results does not contain all the disclosures required by International Financial Reporting Standards, the Zimbabwe Companies Act (Chapter 24:03) and the Zimbabwe Banking Act (Chapter 24:20), which are disclosed in the full consolidated annual financial statements from which this set of condensed financial statements were derived. For a better understanding of the Group`s financial position, its financial performance and cash flows for the year, these condensed financial statements should be read in conjunction with the audited consolidated annual financial statements.
The condensed financial statements were approved by the Board of Directors on 15 March 2016.
2.1 Basis of preparation
The condensed financial statements have been prepared under the historical cost convention except for quoted and other investments, investment properties and financial instruments which are carried at fair value and land and buildings which are stated at revalued amount. These condensed financial statements are reported in United States of America dollars and rounded to the nearest dollar.
2.2 Basis of consolidation
The Group financial results incorporate the financial results of the Company, its subsidiaries and associate company. Subsidiaries are investees controlled by the Group. The Group controls an investee if it is exposed to, or has rights to, variable returns from its involvement with the investee. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until date when control ceases. The financial results of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. All intra-group balances, transactions, income and expenses; profits and losses resulting from intra-group transactions that are recognised in assets and liabilities are eliminated in full. When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related non-controlling interest and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.
An associate is an entity over which the Group has significant influence, as evidenced by the Group holding directly or indirectly 20% or more of the voting power of the investee, representation on the Board and direct involvement with the policy making processes of the investee. The investment in associate is accounted for using the equity method.
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
2.3 Comparative financial information
The condensed financial statements comprise consolidated statements of financial position, comprehensive income, changes in equity, cash flows and selected notes are for twelve months. The comparative consolidated statements of comprehensive income, changes in equity, cash flows and selected notes are for twelve months.
2.4 Use of estimates and judgements
The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.
In the process of applying the Group's accounting policies, management has made the following judgements which have the most significant effect on the amounts recognised in the financial statements:
2.4.1 Deferred tax
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Provision for deferred taxation is made using the liability method in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Temporary differences arising out of the initial recognition of assets or liabilities and temporary differences on initial recognition of business combinations that affect neither accounting nor taxable profit are not recognised. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the reporting date. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
In determining the amounts used for taxation purposes the directors referred to applicable effective exchange rates at the date of acquisition of assets or incurring of liabilities. The Zimbabwe Revenue Authority (ZIMRA), announced methods to account for the deferred tax arising on assets purchased in ZWD. These methods require the preparer to first estimate the equivalent USD value of those assets at the time of purchase. Since the measurement of transactions in Zimbabwe dollars in the prior periods is affected by several economic variables such as mode of payment and hyperinflation, this is an area where the directors have had to apply their judgement and acknowledge there could be significant variations in the results achieved depending on assumptions made.
2.4.2 Land and buildings
The properties were valued by professional valuers. The valuers applied the rental yield method and comparable market evidence to assess fair value of land and buildings. The determined fair value of land and buildings is most sensitive to the estimated yield as well as the long term vacancy rate. In addition, the property market is currently not stable due to liquidity constraints and hence comparable values are also not stable.
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2014
2.4.3 Investment properties and property and equipment
Investment properties were valued by professional valuers.The professional valuers considered comparable market evidence of recent sale transactions and those transactions where firm offers had been made but awaiting acceptance. In addition, the property market is currently not stable due to liquidity constraints and hence comparable values are also not stable.
The directors exercised their judgment in determining the residual values of the other property and equipment which have been determined as nil.
2.4.4 Intangible assets
Intangible assets are initially recognised at cost. Subsequently the assets are measured at cost less accumulated amortisation and any impairment loss.
2.4.5 Investment securities
2.4.5.1 Investment securities - held to maturity
This relates to the RBZ Bond that was valued at amortised cost as there is currently no market information to facilitate the application of fair value principles (refer to note 14.1). There is currently no active market for these bonds.
2.4.5.2 Investment securities - loans and receivables
This relates to various Treasury Bills that were valued at amortised cost as there is currently no market information to facilitate the application of fair value principles (refer to note 14.1).
2.4.6 Impairment losses on loan and advances
The Group reviews all loans and advances at each reporting date to assess whether an impairment loss should be recorded in profit or loss. In particular, judgement by management is required in the estimation of the amount and timing of future cash flows when determining the impairment loss. In estimating these cash flows, the Group makes judgements about the borrower's financial situation and the net realisable value of collateral. These estimates are based on assumptions about a number of factors and actual results may differ, resulting in future changes to the allowance. Loans and advances that have been assessed individually and found not to be impaired and all individually insignificant loans and advances are then assessed collectively, in groups of assets with similar risk characteristics, to determine whether provision should be made due to incurred loss events for which there is objective evidence but whose effects are not yet evident. The collective assessment takes account of data from the loan portfolio (such as credit quality, levels of arrears, credit utilisation, loan to collateral ratios etc.), concentration of risks and economic data.
The impairment loss on loans and advances is disclosed in more detail under note 8 and note 17.3 below.
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
2.4.7 Fair value adjustments of unquoted investments
Subject to contractual provisions, the fair value of unquoted investments is established with reference to the net asset value and the earnings capacity of the business. Valuations on the earnings basis is calculated as the sustainable earnings for the entity multiplied by discounted Price Earnings Ratio of a quoted Company with similar operations in a similar environment.
The valuation of investment in unlisted companies has been carried in the statement of financial position of the Bank based on the audited net asset values of the investee companies.
2.4.8 Non-current assets held for sale
Non-current assets or disposal groups are held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. These are measured at the lower of the carrying amount and fair value less costs to sell and they are not depreciated.
Non-current assets were valued by independent professional valuers, PMA Real Estate (Private) Limited. All non-current assets held for sale are measured at their fair values.
2.4.9 Going concern
The Directors have assessed the ability of the Group to continue operating as a going concern and believe that the preparation of these consolidated financial statements on a going concern basis is still appropriate.
3. ACCOUNTING POLICIES
The selected principal accounting policies applied in the preparation of these condensed financial statements are set out in Note 2 and below. These policies have been consistently applied unless otherwise stated.
3.1 Financial instruments 3.1.1 Classification
Financial assets and liabilities at fair value through profit and loss include financial assets and liabilities held for trading i.e. those that the Group principally holds for the purpose of short-term profit taking as well as those that were, upon initial recognition, designated by the entity as financial assets or liabilities at fair value through profit and loss.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market other than those classified as held-for-trading and the Group upon initial recognition designates as at fair value through profit or loss and those the Group upon initial recognition designates as available-for-sale.
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity that the Group has the positive intention and ability to hold to maturity.
Financial assets available-for-sale are non-derivative financial assets that are designated as available-for- sale or are not classified as loans and receivables, held-to-maturity investments or financial assets at fair value through profit or loss.
3.1.2 Recognition
The Group recognises financial assets at fair value through profit and loss and available for sale assets on the date it commits to purchase the assets. From this date any gains and losses arising from changes in fair value of the assets are recognised in the income statement and other comprehensive income respectively.
Held-to-maturity investments and loans and receivables are recognised at cost which is the fair value of the consideration given on the day that they are transferred to the Group.
3.1.3 Measurement
Financial assets and liabilities are measured initially at fair value. Subsequent to initial recognition, financial assets and liabilities measured at fair value through profit and loss and available-for-sale financial assets are measured at fair value, except that any instrument that does not have a quoted market price in an active market and whose fair value cannot be reliably measured is stated at cost, less impairment losses.
Held-to-maturity investments and loans and receivables are measured at amortised cost less impairment losses. Amortised cost is calculated using the effective interest rate method. Premiums and discounts, including initial transaction costs, are included in the carrying amount of the related instrument and amortised based on the effective interest rate of the instrument.
3.1.4 Fair value measurement principles
The fair value of financial instruments is based on their quoted market price at the reporting date without any deduction for transaction costs. If a quoted market price is not available, the fair value of the instrument is estimated using pricing models or discounted cash flow techniques.
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Where discounted cash flow techniques are used, estimated future cash flows are based on management's best estimates and the discount rate is a market related rate at the reporting date for an instrument with similar terms and conditions. Where pricing models are used, inputs are based on market related measures at the reporting date.
3.2 Investment properties
Investment properties are stated at fair value. Gains and losses arising from a change in fair value of investment properties are recognized in the income statement. The fair value is determined at the end of each reporting period, by a registered professional valuer.
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
3.3 Share - based payments
The Group issues share options to certain employees in terms of the Employee Share Option Scheme. Share options are measured at fair value at the date of grant. The fair value determined at the date of grant of the options is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest. Fair value is measured using the Black-Scholes option pricing model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and other behavioural considerations.
3.4 Property and equipment
International Accounting Standard 16 (IAS 16) Property, plant and equipment stipulates that the residual value and the useful life of an asset must be reviewed at least each financial year-end. If the residual value of an asset increases by an amount equal to or greater than the asset's carrying amount, then the depreciation of the asset ceases. Depreciation will resume only when the residual value decreases to an amount below the asset's carrying amount.
3.5 Intangible assets
Intangible assets are initially recognised at cost. Subsequently, the assets are measured at cost less accumulated armotisation and any accumulated impairment losses.
3.6 Taxation
Income tax
Income tax expenses comprise current, AIDS levy and deferred tax. It is recognised in profit or loss except to the extent that it relates to items recognised directly in equity or in other comprehensive income.
Current
Current tax comprises expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. It is measured using rates enacted or substantively enacted at the reporting date in the country where the Bank operates and generates taxable income and any adjustment to tax payable in respect of previous years.
Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities.
Deferred taxation
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:
-- temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;
-- temporary differences related to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future; and
-- taxable temporary differences arising on the initial recognition of goodwill.
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
3.6 Taxation (continued)
Deferred tax (continued)
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.
The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Bank expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. For this purpose, the carrying amount of investment property measured at fair value is presumed to be recovered through sale, and the Bank has not rebutted this presumption.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
Additional taxes that arise from the distribution of dividends by the Bank are recognised at the same time as the liability to pay the related dividend is recognised. These amounts are generally recognised in profit or loss because they generally relate to income arising from transactions that were originally recognised in profit or loss.
3.7 Cash and cash equivalents
Cash and cash equivalents comprise cash and bank balances, and short term highly liquid investments with maturities of three months or less when purchased. Cash and cash equivalents are measured at amortised cost in the statement of financial position.
3.8 Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Bank and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty. The specific recognition criteria described below must also be met before revenue is recognised.
3.9 Interest income
For all financial instruments measured amortised cost and financial instruments designated at fair value through profit or loss, interest income or expense is recorded using the effective interest rate (EIR), which is the rate that exactly discounts the estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or liability. Interest income includes income arising out of the banking activities of lending and investing.
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
3.10 Interest expense
Interest expense arises from deposit taking. The expense is recognised in profit or loss as it accrues, taking into account the effective interest cost of the liability.
3.11 Shareholders' funds
Shareholders' funds refers to the investment made by the shareholders to the Group and it consists of share capital, share premium, share options reserve, retained earnings, redeemable ordinary shares and subordinated term loans.
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
4. INTEREST INCOME
31 December 31 December
2015 2014
--------------------------------- ---------------- ---------------
US$ US$
--------------------------------- ---------------- ---------------
Loans and advances to banks 2 226 621 1 908 075
--------------------------------- ---------------- ---------------
Loans and advances to customers 32 271 843 28 879 078
--------------------------------- ---------------- ---------------
Investment securities 1 262 891 210 321
--------------------------------- ---------------- ---------------
Other - 74 987
--------------------------------- ---------------- ---------------
--------------- --------------
--------------------------------- ---------------- ---------------
35 761 355 31 072 461
--------------------------------- ---------------- ---------------
========= =========
--------------------------------- ---------------- ---------------
5. FEE AND COMMISSION INCOME, NON-INTEREST INCOME AND OTHER COMPREHENSIVE INCOME
5.1 FEE AND COMMISSION income
31 December 31 December
2015 2014
----------------------------------- -------------- ---------------
US$ US$
----------------------------------- -------------- ---------------
Retail banking customer fees 17 057 135 12 168 355
----------------------------------- -------------- ---------------
Corporate banking credit
related fees 1 567 808 227 064
----------------------------------- -------------- ---------------
Financial guarantee income 206 420 140 520
----------------------------------- -------------- ---------------
International banking commissions 1 597 671 1 755 909
----------------------------------- -------------- ---------------
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Corporate finance fees 555 660 829 688
----------------------------------- -------------- ---------------
------------- --------------
----------------------------------- -------------- ---------------
20 984 694 15 121 536
----------------------------------- -------------- ---------------
======== =========
----------------------------------- -------------- ---------------
5.2 non-interest income
31 December 31 December
2015 2014
------------------------------------- -------------- ------------
US$ US$
------------------------------------- -------------- ------------
Quoted and other investments
fair value adjustments (62 654) (13 372)
------------------------------------- -------------- ------------
Fair value adjustment on non-
current assets held for sale (3 000) 3 000
------------------------------------- -------------- ------------
Fair value adjustment on investment
properties 118 278 37 800
------------------------------------- -------------- ------------
Profit on disposal of investment 635 500 -
properties
------------------------------------- -------------- ------------
(Loss)/profit on disposal of
property and equipment (46 924) 6 274
------------------------------------- -------------- ------------
Rental income 49 523 36 160
------------------------------------- -------------- ------------
Bad debts recovered 430 851 1 502
------------------------------------- -------------- ------------
Other net operating income 112 551 (9 339)
------------------------------------- -------------- ------------
------------- -----------
------------------------------------- -------------- ------------
1 234 125 62 025
------------------------------------- -------------- ------------
======= ======
------------------------------------- -------------- ------------
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
5. FEE and COMMISSION INCOME,
NON-INTEREST INCOME AND OTHER
COMPREHENSIVE INCOME (continued)
5.3 OTHER COMPREHENSIVE INCOME
31 December 31 December
2015 2014
------------------------------ ------------ ------------
US$ US$
------------------------------ ------------ ------------
Gross revaluation adjustment
on land and buildings 4 000 13 710
------------------------------ ------------ ------------
Tax effect (1 030) (3 530)
------------------------------ ------------ ------------
---------- -----------
------------------------------ ------------ ------------
Net revaluation adjustment 2 970 10 180
------------------------------ ------------ ------------
====== =======
------------------------------ ------------ ------------
6. Operating EXPENDITURE
31 December 31 December
2015 2014
----------------------------------------- --------------- ---------------
US$ US$
----------------------------------------- --------------- ---------------
The operating profit is after
recognising the following:
----------------------------------------- --------------- ---------------
Administration costs 12 702 704 11 798 556
----------------------------------------- --------------- ---------------
Audit fees:
----------------------------------------- --------------- ---------------
- Current year 85 557 74 014
----------------------------------------- --------------- ---------------
- Prior year 109 325 140 433
----------------------------------------- --------------- ---------------
Impairment/ (impairment reversal)
on land and buildings 44 200 (46 900)
----------------------------------------- --------------- ---------------
Depreciation 1 690 902 1 899 047
----------------------------------------- --------------- ---------------
Amortisation of intangible assets 509 687 337 118
----------------------------------------- --------------- ---------------
Directors' remuneration 499 024 996 571
----------------------------------------- --------------- ---------------
- Fees for services as directors 232 705 316 255
----------------------------------------- --------------- ---------------
- Other emoluments 266 319 680 316
----------------------------------------- --------------- ---------------
Staff costs -salaries, allowances
and related costs 10 362 780 11 699 514
----------------------------------------- --------------- ---------------
-termination benefits 868 470 1 085 698
----------------------------------------- --------------- ---------------
-------------- --------------
----------------------------------------- --------------- ---------------
26 872 649 27 984 051
----------------------------------------- --------------- ---------------
======== ========
----------------------------------------- --------------- ---------------
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
7. taxation
31 December 31 December
2015 2014
-------------------- ------------- --------------
Income tax expense US$ US$
-------------------- ------------- --------------
Current tax 1 341 497 703 432
-------------------- ------------- --------------
AIDS levy 40 245 21 103
-------------------- ------------- --------------
Deferred tax 878 448 35 420
-------------------- ------------- --------------
Capital gains tax 161 850 8 500
-------------------- ------------- --------------
------------ -------------
-------------------- ------------- --------------
2 422 040 768 455
-------------------- ------------- --------------
======= ========
-------------------- ------------- --------------
8. IMPAIRMENT LOSSES ON LOANS AND ADVANCES
Impairment losses are applied to write off loans and advances in part or in whole when they are considered partly or wholly irrecoverable. The aggregate impairment losses which are made during the year are dealt with as per paragraph 8.3.
8.1 Specific provisions
Specific provisions are made where the repayment of identified loans and advances is in doubt and reflect estimates of the loss. Loans and advances are written off against specific provisions once the probability of recovering any significant amounts becomes remote.
8.2 Portfolio provisions
The portfolio provision relates to the inherent risk of losses which, although not separately identified, is known to be present in any loan portfolio.
8.3 Regulatory Guidelines and International Financial Reporting Standards Requirements
The Banking Regulations 2000 gives guidance on provisioning for doubtful debts and stipulates certain minimum percentages to be applied to the respective categories of the loan book.
International Accounting Standard 39, Financial Instruments Recognition and Measurement (IAS 39), prescribes the provisioning for impairment losses based on the actual loan losses incurred in the past applied to the sectoral analysis of book debts and the discounting of expected cash flows on specific problem accounts.
The two prescriptions are likely to give different results. The Group has taken the view that where the IAS 39 charge is less than the amount provided for in the Banking Regulations, the difference is recognized directly in equity as a transfer from retained earnings to a regulatory reserve and where it is more, the full amount will be charged to the profit or loss.
8.4 Non-performing loans
Interest on loans and advances is accrued to income until such time as reasonable doubt exists about its collectability, thereafter and until all or part of the loan is written off, interest continues to accrue on customers' accounts, but is not included in income. Such suspended interest is deducted from loans and advances in the statement of financial position. This policy meets the requirements of the Banking Regulations 2000 issued by the RBZ.
NMBZ HOLDINGS LIMITED
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
9. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the profit for the year attributable to ordinary equity holders of NMBZ Holdings Limited by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share is calculated by dividing the profit attributable to ordinary equity holders of NMBZ Holdings Limited adjusted for the after tax effect of: (a) any dividends or other items related to dilutive potential ordinary shares deducted in arriving at profit or loss attributable to ordinary equity holders of the parent entity; (b) any interest recognised in the period related to dilute potential ordinary shares; (c) any other changes in income or expense that would result from the conversion of the dilutive potential ordinary shares, by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.
9.1 Earnings
31 December 2015 31 December
2014
----------------------- ----------------- ------------
US$ US$
----------------------- ----------------- ------------
Attributable earnings 5 490 068 1 667 247
----------------------- ----------------- ------------
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
9.2 Number of shares
9.2.1 Basic earnings per share
31 December 31 December
2015 2014
--------------------------- -------------- --------------
Weighted average number
of ordinary shares for
basic earnings per share 384 427 351 384 427 351
--------------------------- -------------- --------------
9.2.2 Diluted earnings per share
31 December 31 December
2015 2014
------------------------------- ---------------- ---------------
Number of shares at beginning
of period 384 427 351 384 427 351
------------------------------- ---------------- ---------------
Effect of dilution:
------------------------------- ---------------- ---------------
Share options granted
but not issued 4 128 434 4 128 434
------------------------------- ---------------- ---------------
Share options approved
but not granted 23 942 639 23 942 639
------------------------------- ---------------- ---------------
--------------- --------------
------------------------------- ---------------- ---------------
Share options granted
but not issued 412 498 434 412 498 434
------------------------------- ---------------- ---------------
========= =========
------------------------------- ---------------- ---------------
9.3 Earnings per share (US cents)
31 December 31 December
2015 2014
---------------------------- ------------ ------------
Basic earnings per share 1.43 0.43
---------------------------- ------------ ------------
Diluted earnings per share 1.33 0.40
---------------------------- ------------ ------------
10. SHARE CAPITAL
10.1 Authorised
31 December 31 December 31 December 31 December
2015 2014 2015 2014
----------------- ------------ ------------ ------------ -------------
Shares Shares US$ US$
million million
----------------- ------------ ------------ ------------ -------------
Ordinary shares
of US$0.00028
each 600 600 168 000 168 000
----------------- ------------ ------------ ------------ -------------
==== ==== ===== =====
----------------- ------------ ------------ ------------ -------------
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
10.2 Issued and fully paid
10.2.1 Ordinary shares
31 December 31 December 31 December 31 December
2015 2014 2015 2014
----------------- ------------ ------------ ------------ ------------
Shares Shares
million million US$ US$
----------------- ------------ ------------ ------------ ------------
Ordinary shares 281 281 78 598 78 598
----------------- ------------ ------------ ------------ ------------
==== ==== ===== =====
----------------- ------------ ------------ ------------ ------------
10.2.2 Redeemable ordinary shares
31 December 31 December 31 December 31 December
2015 2014 2015 2014
--------------------- ------------ ------------ ------------ ------------
Shares Shares
million million US$ US$
--------------------- ------------ ------------ ------------ ------------
Redeemable ordinary
shares 104 104 29 040 29 040
--------------------- ------------ ------------ ------------ ------------
=== === ===== =====
--------------------- ------------ ------------ ------------ ------------
Of the unissued ordinary shares of 215 million shares (2014- 215 million), options which may be granted in terms of the NMBZ 2012 Employee Share Option Scheme (ESOS) amounted to 28 071 073 and as at 31 December 2015, 4 128 434 share options had been issued.
Subject to the provisions of section 183 of the Companies Act (Chapter 24:03), the unissued shares are under the control of the directors.
11 REDEEMABLE ORDINARY SHARES
31 December 31 December
2015 2014
----------------------------- --------------- ---------------
Nominal value (note 10.2.2) 29 040 29 040
----------------------------- --------------- ---------------
Transfer from share premium 14 306 213 14 306 213
----------------------------- --------------- ---------------
-------------- --------------
----------------------------- --------------- ---------------
14 335 253 14 335 253
----------------------------- --------------- ---------------
======== ========
----------------------------- --------------- ---------------
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
11. REDEEMABLE ORDINARY SHARES (continued)
On 30 June 2013 the Company received US$14 831 145 capital from Nederlandse Financierings-Maatschappij Voor Ontiwikkelingslanden N.V. (FMO), Norwegian Investment Fund for Developing Countries (Norfund) and AfricInvest Financial Sector Holdings (AfricInvest) who were allocated 34 571 429 shares each (total of 103 714 287) for individually investing US$4 943 715. This amount, net of share issue expenses, was used to recapitalise the Bank in order to contribute towards the minimum capital requirements set by the Reserve Bank of Zimbabwe of US$100 million by 31 December 2020.
NMBZ Holdings Limited (NMBZ) entered into a share buy-back agreement with Norfund, FMO and AfricInvest, where these three strategic investors have a right on their own discretion at any time after the 5(th) anniversary (30 June 2018) but before the 9(th) anniversary (30 June 2022) of its first subscription date, to request NMBZ to buy back all or part of its NMBZ shares at a price to be determined using the agreed terms as entailed in the share buy-back agreement. It is a condition precedent that at any point when the share buy-back is being considered, the proceeds used to finance the buy-back should come from the distributable reserves which are over and above the minimum regulatory capital requirements. Further, no buy-back option can be exercised by any investor after the 9(th) anniversary (30 June 2022) of the effective date.
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The share buy-back agreement creates a potential obligation for NMBZ Holdings Limited to purchase its own instruments. Thus shares issued gave rise to a potential financial liability and are classified as redeemable ordinary shares.
12. SUBORDINATED TERM LOAN
31 December 31 December
2015 2014
---------------------- -------------- ---------------
US$ US$
---------------------- -------------- ---------------
At 1 January 1 407 964 1 485 890
---------------------- -------------- ---------------
Interest capitalised 134 676 140 487
---------------------- -------------- ---------------
Interest paid (128 496) (218 413)
---------------------- -------------- ---------------
------------- --------------
---------------------- -------------- ---------------
1 414 144 1 407 964
---------------------- -------------- ---------------
======== ========
---------------------- -------------- ---------------
In 2013, the Bank received a subordinated term loan amounting to US$1.4 million from a Development Financial Institution which attracts an interest rate of LIBOR plus 10% and has a seven year maturity date (13 June 2020) from the first disbursement date.
The above liability would, in the event of the winding up of the issuer, be subordinated to the claims of depositors and all other creditors of the issuer. The Group has not had any defaults on the principal and interest with respect to this subordinated loan during the year ended 31 December 2015. However, there were breaches to the financial covenants regarding the open asset exposure ratio that stood at 41.5% instead of a maximum of 30% as well as the aggregate un-hedged open foreign currency positions ratio that stood at 12.6% instead of a cap of 10%. The Bank will apply for a waiver of the non-compliant ratios by 31 March 2016.
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
13. DepositS and other liabilities
13.1 Deposits and other liabilities
31 December 31 December
2015 2014
--------------------------- -------------------------------- -----------------
US$ US$
--------------------------- -------------------------------- -----------------
Deposits from banks
and other financial
institutions** 63 192 674 59 739 033
--------------------------- -------------------------------- -----------------
Current and deposit
accounts 214 024 095 175 623 644
--------------------------- -------------------------------- -----------------
----------------- ----------------
--------------------------- -------------------------------- -----------------
Total deposits* 277 216 769 235 362 677
--------------------------- -------------------------------- -----------------
Trade and other payables* 6 070 474 5 638 741
--------------------------- -------------------------------- -----------------
----------------- ----------------
--------------------------- -------------------------------- -----------------
283 287 243 241 001 418
--------------------------- -------------------------------- -----------------
========== =========
--------------------------- -------------------------------- -----------------
*Deposits and other payables approximate the related carrying amount due to their short term nature.
**Included in deposits from banks and other financial institutions are loan balances of US$833 333 and US$7 368 421 due to Nederlandse Financierings-Maatschappij Voor Ontiwikkelingslanden N.V. (FMO) and Societe de Promotion de Participation Pour la Cooperation Economique SA (Proparco) respectively. The Group has not had any defaults on the principal and interest with respect to these loans during the year ended 31 December 2015. However, there were breaches to the Proparco financial covenants regarding the following ratios:
-- Open credit exposure - 41.5% (instead of a maximum of 25%). -- Non-performing loans ratio -13.2% (instead of a maximum of 10%).
The Bank will apply for a waiver of the non-compliant ratios by 31 March 2016.
13.2 Maturity analysis
31 December 31 December
2015 2014
-------------------- ---------------- -----------------
US$ US$
-------------------- ---------------- -----------------
Less than 1 month 184 324 981 172 324 494
-------------------- ---------------- -----------------
1 to 3 months 66 129 516 32 017 300
-------------------- ---------------- -----------------
3 to 6 months 3 241 887 4 887 372
-------------------- ---------------- -----------------
6 months to 1 year 14 969 876 8 890 799
-------------------- ---------------- -----------------
1 to 5 years 8 550 509 17 242 712
-------------------- ---------------- -----------------
Over 5 years - -
-------------------- ---------------- -----------------
--------------- ----------------
-------------------- ---------------- -----------------
277 216 769 235 362 677
-------------------- ---------------- -----------------
========= ==========
-------------------- ---------------- -----------------
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
13.3 Sectoral analysis of deposits
31 December 31 December
2015 2014
---------------------------------- ---------------- --------- ---------------- -------
US$ % US$ %
---------------------------------- ---------------- --------- ---------------- -------
Agriculture 7 959 554 3 4 706 661 2
---------------------------------- ---------------- --------- ---------------- -------
Banks and other
financial institutions 63 192 674 23 59 739 033 25
---------------------------------- ---------------- --------- ---------------- -------
Distribution 28 153 680 10 21 893 891 9
---------------------------------- ---------------- --------- ---------------- -------
Individuals 30 782 718 11 31 127 616 13
---------------------------------- ---------------- --------- ---------------- -------
Manufacturing 37 633 942 14 28 354 313 12
---------------------------------- ---------------- --------- ---------------- -------
Mining companies 6 268 507 2 4 125 974 2
---------------------------------- ---------------- --------- ---------------- -------
Municipalities and
parastatals 11 833 310 4 10 367 121 5
---------------------------------- ---------------- --------- ---------------- -------
Other deposits 34 054 452 12 30 124 932 13
---------------------------------- ---------------- --------- ---------------- -------
Services 47 908 714 17 38 488 209 16
---------------------------------- ---------------- --------- ---------------- -------
Transport and telecommunications
---------------------------------- ---------------- --------- ---------------- -------
companies 9 429 218 4 6 434 927 3
---------------------------------- ---------------- --------- ---------------- -------
--------------- -------- --------------- ------
---------------------------------- ---------------- --------- ---------------- -------
235 362
277 216 769 100 677 100
---------------------------------- ---------------- --------- ---------------- -------
========= ===== ========= ====
---------------------------------- ---------------- --------- ---------------- -------
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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for the year ended 31 December 2015
14. FINANCIAL INSTRUMENTS
14.1 Investment securities held to maturity
31 December 31 December
2015 2014
---------------------------- ---------------- ---------------
US$ US$
---------------------------- ---------------- ---------------
Investment securities held
to maturity 3 817 687 3 874 525
---------------------------- ---------------- ---------------
Investment securities - 10 730 305 -
loans and receivables
---------------------------- ---------------- ---------------
--------------- --------------
---------------------------- ---------------- ---------------
14 547 992 3 874 525
---------------------------- ---------------- ---------------
========= ========
---------------------------- ---------------- ---------------
The Group holds Treasury Bills and Government bonds amounting to US$14 547 992 with interest rates ranging from 2.5% to 5%. Liquidity induced trades have occurred in the secondary market and these trades do not represent free market activity. In light of the absence of an active market for the Treasury Bills, the instruments are recorded at amortised cost. Of the total Treasury Bills balance, a total of US$6 136 716 has been pledged as security on interbank borrowings.
14.2 Maturity analysis of investment securities held to maturity
31 December 31 December
2015 2014
-------------------- --------------- ---------------
US$ US$
-------------------- --------------- ---------------
Less than 1 month - -
-------------------- --------------- ---------------
1 to 3 months 1 314 802 -
-------------------- --------------- ---------------
3 to 6 months 2 502 885 2 582 519
-------------------- --------------- ---------------
6 months to 1 year - 1 292 006
-------------------- --------------- ---------------
1 year to 5 years - -
-------------------- --------------- ---------------
Over 5 years - -
-------------------- --------------- ---------------
-------------- --------------
-------------------- --------------- ---------------
3 817 687 3 874 525
-------------------- --------------- ---------------
======== =========
-------------------- --------------- ---------------
14.3 Maturity analysis of investment securities - loans and receivables
31 December 31 December
2015 2014
------------------- ------------------ ---------------
US$ US$
------------------- ------------------ ---------------
Less than 1 month - -
------------------- ------------------ ---------------
1 to 3 months - -
------------------- ------------------ ---------------
6 months to 1 year 6 329 114 -
------------------- ------------------ ---------------
1 year to 5 years 3 400 415 -
------------------- ------------------ ---------------
Over 5 years 1 000 776 -
------------------- ------------------ ---------------
----------------- --------------
------------------- ------------------ ---------------
10 730 305 -
------------------- ------------------ ---------------
========== =========
------------------- ------------------ ---------------
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
14. FINANCIAL INSTRUMENTS (continued) 14.4 Fair values of financial instruments
The fair values of financial assets and financial liabilities that are traded in active markets are based on quoted market prices or dealer price quotations. For all other financial instruments, the Group determines fair values using other valuation techniques.
For financial instruments that trade infrequently and have little price transparency, fair value is less objective, and requires varying degrees of judgement depending on liquidity, concentration, uncertainty of market factors, pricing assumptions and other risks affecting the specific instrument.
Valuation models
The Group measures fair values using the following fair value hierarchy, which reflects the significance of the inputs used in making the measurements.
-- Level 1: inputs that are quoted market prices (unadjusted) in active markets for identical instruments.
-- Level 2: inputs other than quoted prices included within Level 1 that are observable either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques in which all significant inputs are directly or indirectly observable from market data.
-- Level 3: inputs that are unobservable. This category includes all instruments for which the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument's valuation. This category includes instruments that are valued based on quoted prices for similar instruments for which significant unobservable adjustments or assumptions are required to reflect differences between the instruments.
The objective of valuation techniques is to arrive at a fair value measurement that reflects the price that would be received to sell the asset or paid to transfer the liability in an orderly transaction between market participants at the measurement date.
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
14. FINANCIAL INSTRUMENTS (continued) 14.4 Fair values of financial instruments
14.4.1 Financial instruments measured at fair value - fair value hierarchy
31 Dec Level 1 Level 2 Level 3
2015
-------------------- --------------- -------------- ------------ -----------------
US$ US$ US$ US$
-------------------- --------------- -------------- ------------ -----------------
Trade investments 77 805 - - 77 805
-------------------- --------------- -------------- ------------ -----------------
Quoted investments 68 220 68 220 - -
-------------------- --------------- -------------- ------------ -----------------
-------------- ------------- ----------- ----------------
-------------------- --------------- -------------- ------------ -----------------
146 025 68 220 - 77 805
-------------------- --------------- -------------- ------------ -----------------
======== ======== ======= ===========
-------------------- --------------- -------------- ------------ -----------------
During the reporting period ended 31 December 2015, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfers into and out of Level 3 fair value measurements. The trade investments were valued using the net asset value method.
31 Dec Level 1 Level 2 Level 3
2014
-------------------- --------------- -------------- ------------ -----------------
US$ US$ US$ US$
-------------------- --------------- -------------- ------------ -----------------
Trade investments 81 390 - - 81 390
-------------------- --------------- -------------- ------------ -----------------
Quoted investments 127 291 127 291 - -
-------------------- --------------- -------------- ------------ -----------------
-------------- ------------- ----------- ----------------
-------------------- --------------- -------------- ------------ -----------------
208 681 127 291 - 81 390
-------------------- --------------- -------------- ------------ -----------------
======== ======== ======= =========
-------------------- --------------- -------------- ------------ -----------------
During the reporting period ended 31 December 2014, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfers into and out of Level 3 fair value measurements. The trade investments were valued using the net asset value method.
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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for the year ended 31 December 2015
14. FINANCIAL INSTRUMENTS (continued) 14.4 Fair values of financial instruments (continued)
14.4.1 Financial instruments measured at fair value - fair value hierarchy (continued)
Level 3 fair value measurements
Reconciliation
31 December 2015
Trade investments
------------------------------ ------------------
US$
------------------------------ ------------------
Balance at 1 January 81 390
------------------------------ ------------------
Total loss in profit or loss (3 585)
------------------------------ ------------------
-----------
------------------------------ ------------------
Balance at 31 December 77 805
------------------------------ ------------------
=======
------------------------------ ------------------
31 December 2014
Trade investments
------------------------------ ------------------
US$
------------------------------ ------------------
Balance at 1 January 190 148
------------------------------ ------------------
Total gain in profit or loss 5 188
------------------------------ ------------------
Disposal of investment (113 946)
------------------------------ ------------------
-----------
------------------------------ ------------------
Balance at 31 December 81 390
------------------------------ ------------------
=======
------------------------------ ------------------
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
14. FINANCIAL INSTRUMENTS (continued) 14.4 Fair values of financial instruments (continued) 14.4.2 Financial instruments not measured at fair value
The below table sets out the fair values of financial instruments not measured at fair value and analyses them by the level in the fair value hierarchy into which each fair value measurement is categorised.
31 December 2015
Level Level 2 Level 3 Total carrying
amount
----------------- ------------ ------------------- --------------- ------------------
Assets US$ US$ US$ US$
----------------- ------------ ------------------- --------------- ------------------
Cash and cash 63 439
equivalents - 347 - 63 439 347
----------------- ------------ ------------------- --------------- ------------------
Loans, advances
and other 235 088 235 088
accounts - 981 - 981
----------------- ------------ ------------------- --------------- ------------------
Investment 14 547
securities - - 992 14 547 992
----------------- ------------ ------------------- --------------- ------------------
---------- ----------------- -------------- -----------------
----------------- ------------ ------------------- --------------- ------------------
298 528 14 547 313 076
- 328 992 320
------------------------------ ------------------- --------------- ------------------
====== ========== ======== ==========
----------------- ------------ ------------------- --------------- ------------------
Liabilities
----------------- ------------ ------------------- --------------- ------------------
Deposits and
other 283 287 283 287
liabilities - 243 - 243
----------------- ------------ ------------------- --------------- ------------------
---------- ------------------ ------------ -----------------
----------------- ------------ ------------------- --------------- ------------------
283 287 283 287
- 243 - 243
------------------------------ ------------------- --------------- ------------------
====== =========== ======= ==========
------------------------------ ------------------- --------------- ------------------
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
14. FINANCIAL INSTRUMENTS (continued) 14.3 Fair values of financial instruments (continued) 14.4.2 Financial instruments not measured at fair value
31 December 2014
Total carrying
Level Level 2 Level 3 amount
----------------- ------------ ------------------- --------------- ------------------
Assets US$ US$ US$ US$
----------------- ------------ ------------------- --------------- ------------------
Cash and cash 54 750
equivalents - 561 - 54 750 561
----------------- ------------ ------------------- --------------- ------------------
Loans, advances
and other 203 363 203 363
accounts - 052 - 052
----------------- ------------ ------------------- --------------- ------------------
Investment
in debentures - 4 614 047 - 4 614 047
----------------- ------------ ------------------- --------------- ------------------
Investment
securities
held
to maturity - - 3 874 525 3 874 525
----------------- ------------ ------------------- --------------- ------------------
---------- ----------------- -------------- -----------------
----------------- ------------ ------------------- --------------- ------------------
262 727 266 602
Total - 660 3 874 525 185
----------------- ------------ ------------------- --------------- ------------------
====== ========== ======== ==========
----------------- ------------ ------------------- --------------- ------------------
Liabilities
----------------- ------------ ------------------- --------------- ------------------
Deposits and
other 241 001 241 001
liabilities - 418 - 418
----------------- ------------ ------------------- --------------- ------------------
---------- ------------------ ------------ -----------------
----------------- ------------ ------------------- --------------- ------------------
241 001 241 001
- 418 - 418
------------------------------ ------------------- --------------- ------------------
====== =========== ======= ==========
------------------------------ ------------------- --------------- ------------------
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
14. FINANCIAL INSTRUMENTS (continued) 14.3 Fair values of financial instruments (continued) 14.3.2 Financial instruments not measured at fair value
The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:
-- The fair values of cash and cash equivalents, advances and other assets and deposits and other liabilities carrying amounts approximate their fair values largely due to the short - term maturities of these instruments.
(MORE TO FOLLOW) Dow Jones Newswires
March 21, 2016 03:00 ET (07:00 GMT)
-- Fair value of financial assets and liabilities at fair value through profit or loss is derived from quoted market prices in active markets. If quoted market prices are not available the fair value is estimated using pricing models or discounted cash flow techniques.
15. CASH AND CASH EQUIVALENTS
31 December 31 December
2015 2014
--------------------------- --------------- ---------------
US$ US$
--------------------------- --------------- ---------------
Balances with the Central
Bank 26 238 681 11 408 222
--------------------------- --------------- ---------------
Current, nostro accounts
and cash 11 700 666 15 842 339
--------------------------- --------------- ---------------
Interbank placements 25 500 000 27 500 000
--------------------------- --------------- ---------------
-------------- --------------
--------------------------- --------------- ---------------
63 439 347 54 750 561
--------------------------- --------------- ---------------
======== =========
--------------------------- --------------- ---------------
Of the cash and cash equivalents balance an amount of US$1 214 932 was pledged to FMO and Proparco as collateral for offshore lines of credit.
16. INVESTMENT IN DEBENTURES
31 December 31 December
2015 2014
-------------------------- ----------------- ---------------
US$ US$
-------------------------- ----------------- ---------------
Debentures 4 787 074 4 787 074
-------------------------- ----------------- ---------------
Allowance for impairment
loss - (173 027)
-------------------------- ----------------- ---------------
Redemption of debentures (4 787 074) -
-------------------------- ----------------- ---------------
---------------- --------------
-------------------------- ----------------- ---------------
- 4 614 047
-------------------------- ----------------- ---------------
========== =========
-------------------------- ----------------- ---------------
The Bank had convertible debentures with a carrying amount of US$4 787 074 with a maturity of 5 years from inception. The debentures were at an interest of 10% per annum. The Bank had an option to convert the debentures to equity or redeem the debentures at par on or before the maturity date of 9 March 2018. The debentures were redeemed at par on 17 March 2015.
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
17. LOANS, ADVANCES AND OTHER ACCOUNTS
17.1 Total loans, advances and other accounts
17.1.1 Advances
31 December 31 December
2015 2014
-------------------------------- ---------------- ----------------
US$ US$
-------------------------------- ---------------- ----------------
Fixed term loans 25 138 443 21 889 534
-------------------------------- ---------------- ----------------
Local loans and overdrafts 207 408 465 182 413 594
-------------------------------- ---------------- ----------------
--------------- ---------------
-------------------------------- ---------------- ----------------
232 546 908 204 303 128
-------------------------------- ---------------- ----------------
Reclassification to debentures - (4 614 047)
-------------------------------- ---------------- ----------------
Other assets 2 542 073 3 673 971
-------------------------------- ---------------- ----------------
-------------- --------------
-------------------------------- ---------------- ----------------
235 088 981 203 363 052
-------------------------------- ---------------- ----------------
========= =========
-------------------------------- ---------------- ----------------
17.1.2 Maturity analysis
31 December 31 December
2015 2014
-------------------------------- ---------------- -----------------
US$ US$
-------------------------------- ---------------- -----------------
131 810
Less than one month 136 146 912 553
-------------------------------- ---------------- -----------------
1 to three months 24 125 652 24 022 035
-------------------------------- ---------------- -----------------
3 to 6 months 2 387 188 1 747 453
-------------------------------- ---------------- -----------------
6 months to 1 year 15 686 184 3 881 236
-------------------------------- ---------------- -----------------
1 to 5 years 64 895 082 56 002 042
-------------------------------- ---------------- -----------------
Over 5 years - -
-------------------------------- ---------------- -----------------
--------------- ----------------
-------------------------------- ---------------- -----------------
217 463
Total advances 243 241 018 319
-------------------------------- ---------------- -----------------
Allowances for impairment
losses
-------------------------------- ---------------- -----------------
on loans and advances (Note (10 790
17.3) (8 582 636) 192)
-------------------------------- ---------------- -----------------
(2 369
Suspended interest (2 111 474) 999)
-------------------------------- ---------------- -----------------
--------------- --------------
-------------------------------- ---------------- -----------------
204 303
232 546 908 128
-------------------------------- ---------------- -----------------
Reclassification to debentures - (4 614 047)
-------------------------------- ---------------- -----------------
Other assets 2 542 073 3 673 971
-------------------------------- ---------------- -----------------
--------------- ---------------
-------------------------------- ---------------- -----------------
203 363
235 088 981 052
-------------------------------- ---------------- -----------------
========= ========
-------------------------------- ---------------- -----------------
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
17.2 Sectoral analysis of utilizations
31 December % 31 December %
2015 2014
------------------ ------------------ --------- ---------------- ---------
Agriculture and
horticulture 13 907 259 6 17 523 451 8
------------------ ------------------ --------- ---------------- ---------
Conglomerates 11 348 334 5 10 030 909 5
------------------ ------------------ --------- ---------------- ---------
Distribution 37 364 138 16 55 359 765 26
------------------ ------------------ --------- ---------------- ---------
Food & beverages 5 692 742 2 442 295 -
------------------ ------------------ --------- ---------------- ---------
101 585
Individuals 312 42 58 353 526 27
------------------ ------------------ --------- ---------------- ---------
Manufacturing 29 774 899 12 29 100 980 13
------------------ ------------------ --------- ---------------- ---------
Mining 1 067 328 - 5 044 850 2
------------------ ------------------ --------- ---------------- ---------
Services 42 501 006 17 41 607 543 19
------------------ ------------------ --------- ---------------- ---------
----------------- -------- --------------- --------
(MORE TO FOLLOW) Dow Jones Newswires
March 21, 2016 03:00 ET (07:00 GMT)
------------------ ------------------ --------- ---------------- ---------
243 241
018 100 217 463 319 100
------------------ ------------------ --------- ---------------- ---------
========== ===== ========= =====
------------------ ------------------ --------- ---------------- ---------
The material concentration of loans and advances is with individuals at 42% (2014 - 27%) and services at 17% (2014 - 19%).
17.3 Allowance for impairment losses on loans, advances and debentures
31 December 2015 31 December 2014
---------------- ----------------------------------------------- -----------------------------------------------
Specific Portfolio Total Specific Portfolio Total
---------------- --------------- ------------- --------------- ---------------- ------------- --------------
US$ US$ US$ US$ US$ US$
---------------- --------------- ------------- --------------- ---------------- ------------- --------------
10 626 10 790 11 427 257
At 1 January 997 163 195 192 356 845 11 685 201
---------------- --------------- ------------- --------------- ---------------- ------------- --------------
Charge against 8 651 9 496 5 112 (94
profits 949 844 652 601 012 650) 5 017 362
---------------- --------------- ------------- --------------- ---------------- ------------- --------------
Bad debts (11 704 (11 704 (5 912
written off 157) - 157) 371) - (5 912 371)
---------------- --------------- ------------- --------------- ---------------- ------------- --------------
-------------- ------------ -------------- --------------- ------------ -------------
---------------- --------------- ------------- --------------- ---------------- ------------- --------------
7 574 1 007 8 582 10 626 163
At 31 December 789 847 636 997 195 10 790 192
---------------- --------------- ------------- --------------- ---------------- ------------- --------------
======== ======= ======== ========= ======= ========
---------------- --------------- ------------- --------------- ---------------- ------------- --------------
During the period under review, the Bank reviewed the basis and assumptions for recognizing portfolio provision in view of the current macro and micro economic conditions prevailing in Zimbabwe. The review resulted in an increase in the level of portfolio provisions recognised by the Bank in proportion to its loan book size.
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
17.4 Non-performing loans, advances and debentures
31 December 31 December
2015 2014
----------------------------- -------------- ----------------
US$ US$
----------------------------- -------------- ----------------
Total non-performing loans
and advances 32 092 184 38 581 699
----------------------------- -------------- ----------------
Allowances for impairment (10 626
loss on loans and advances (7 574 789) 997)
----------------------------- -------------- ----------------
Allowance for impairment
losses on debentures
(Note 16) - 173 027
----------------------------- -------------- ----------------
Retail loans insurance (1 682 840) -
----------------------------- -------------- ----------------
Suspended interest (1 798 490) (2 369 999)
----------------------------- -------------- ----------------
------------- ---------------
----------------------------- -------------- ----------------
Residue 21 036 065 25 757 730
----------------------------- -------------- ----------------
======== ==========
----------------------------- -------------- ----------------
The residue on these accounts represents recoverable portions covered by realisable security, which includes guarantees, cessation of debtors, mortgages over residential properties, equities and promissory notes all fair valued at US$22 787 088 (2014 - US$23 465 162).
17.5 Loans to related parties (included under loans, advances and other assets)
31 December 31 December
2015 2014
------------------------ --------------- ---------------
US$ US$
------------------------ --------------- ---------------
Executive directors 136 276 51 610
------------------------ --------------- ---------------
Officers 5 178 746 3 316 060
------------------------ --------------- ---------------
Officers' companies - 10 169
------------------------ --------------- ---------------
-------------- --------------
------------------------ --------------- ---------------
5 315 022 3 377 839
------------------------ --------------- ---------------
Fair value adjustments (293 377) (180 394)
------------------------ --------------- ---------------
------------- --------------
------------------------ --------------- ---------------
5 021 645 3 197 445
------------------------ --------------- ---------------
======== =========
------------------------ --------------- ---------------
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
18. NON-CURRENT ASSETS HELD FOR SALE
31 December 31 December
2015 2014
----------------------- ------------------- ---------------
US$ US$
----------------------- ------------------- ---------------
At 1 January 2 267 300 2 303 300
----------------------- ------------------- ---------------
Disposals - (39 000)
----------------------- ------------------- ---------------
Fair value adjustment (3 000) 3 000
----------------------- ------------------- ---------------
------------------ --------------
----------------------- ------------------- ---------------
2 264 300 2 267 300
----------------------- ------------------- ---------------
=========== =========
----------------------- ------------------- ---------------
The Group is in possession of land with a fair value of US$2 225 300 at year end. The Group entered into a sale agreement (at a price of US$2 150 000) for a portion of the land in 2012, however the execution and finalisation of the sale under this contract has been pending since then. The buyer has expressed commitment towards finalisation of the sale and the disposal process is now expected to be completed within the next twelve months. The disposal will improve the Group's cash flows. The fair value adjustment is included under non-interest income (note 5.2).
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDTED FINANCIAL STATEMENTS
for the year ended 31 December 2015
19 INTANGIBLE ASSETS
Work in Computer
----------------------------- ------------- ------------- ---------------
Progress Software Total
----------------------------- ------------- ------------- ---------------
US$ US$ US$
----------------------------- ------------- ------------- ---------------
Cost
----------------------------- ------------- ------------- ---------------
1 911
Balance at 1 January 2014 - 483 1 911 483
----------------------------- ------------- ------------- ---------------
Acquisitions 208 673 414 809 623 482
----------------------------- ------------- ------------- ---------------
------------ ------------ --------------
----------------------------- ------------- ------------- ---------------
2 326
Balance at 1January 2015 208 673 292 2 534 965
----------------------------- ------------- ------------- ---------------
Acquisitions 19 922 228 417 248 339
(MORE TO FOLLOW) Dow Jones Newswires
March 21, 2016 03:00 ET (07:00 GMT)
----------------------------- ------------- ------------- ---------------
------------ ------------ -------------
----------------------------- ------------- ------------- ---------------
2 554
Balance at 31 December 2015 228 595 709 2 783 304
----------------------------- ------------- ------------- ---------------
----------- ------------ ------------
----------------------------- ------------- ------------- ---------------
Accumulated amortisation
and impairment
----------------------------- ------------- ------------- ---------------
Balance at 1 January 2014 - 247 114 247 114
----------------------------- ------------- ------------- ---------------
Amortisation for the year - 337 118 337 118
----------------------------- ------------- ------------- ---------------
----------- ------------ ------------
----------------------------- ------------- ------------- ---------------
Balance at 1 January 2015 - 584 232 584 232
----------------------------- ------------- ------------- ---------------
Amortisation for the year - 509 687 509 687
----------------------------- ------------- ------------- ---------------
------------ ----------- -----------
----------------------------- ------------- ------------- ---------------
1 093
Balance at 31 December 2015 - 919 1 093 919
----------------------------- ------------- ------------- ---------------
======= ----------- -----------
----------------------------- ------------- ------------- ---------------
Carrying amount
----------------------------- ------------- ------------- ---------------
1 460
At 31 December 2015 228 595 790 1 689 385
----------------------------- ------------- ------------- ---------------
======== ======= =========
----------------------------- ------------- ------------- ---------------
1 742
At 1 January 2015 208 673 060 1 950 733
----------------------------- ------------- ------------- ---------------
======== ======== =========
----------------------------- ------------- ------------- ---------------
1 664
At 1 January 2014 - 369 1 664 369
----------------------------- ------------- ------------- ---------------
======== ========= =========
----------------------------- ------------- ------------- ---------------
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
20. PROPERTY AND EQUIPMENT
Capital Computers Motor Vehicles Furniture Freehold Total
work in and equipment land buildings
progress
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
US$ US$ US$ US$ US$ US$
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
Cost
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
At 1 January 12 048
2014 - 2 286 662 4 003 128 2 914 364 2 843 908 062
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
Additions 101 375 319 048 392 366 179 287 - 992 076
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
Revaluation
gain - - - - 60 610 60 610
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
Disposals - (4) (234 069) (3) - (234 076)
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
--------------- -------------- -------------- -------------- -------------- ------------
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
At 1 January 12 866
2015 101 375 2 605 706 4 161 425 3 093 648 2 904 518 672
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
Additions 585 511 334 338 418 383 540 202 393 509 2 271 943
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
Capitalisations (33 513) 33 513 - - - -
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
Revaluation
loss - - - - (40 200) (40 200)
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
Disposals - (11 220) (869 083) - - (880 303)
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
Reclassification
to investment
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
properties (67 862) - - - - (67 862)
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
-------------- -------------- -------------- -------------- -------------- -------------
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
At 31 December 14 150
2015 585 511 2 962 337 3 710 725 3 633 850 3 257 827 250
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
-------------- -------------- -------------- -------------- -------------- ------------
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
Accumulated
depreciation
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
At 1 January
2014 - 1 029 312 1 894 424 1 664 551 86 832 4 675 119
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
Charge for
the year - 356 749 1 030 894 456 604 54 800 1 899 047
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
Disposals - (6) (52 754) (1) - (52 761)
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
-------------- -------------- -------------- -------------- -------------- -------------
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
At 1 January
2015 - 1 386 055 2 872 564 2 121 154 141 632 6 521 405
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
Charge for
the year - 392 601 775 381 464 885 58 035 1 690 902
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
Disposals - (3 197) (659 946) - - (663 143)
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
-------------- -------------- -------------- -------------- -------------- -----------
(MORE TO FOLLOW) Dow Jones Newswires
March 21, 2016 03:00 ET (07:00 GMT)
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
At 31 December
2015 - 1 775 459 2 987 999 2 586 039 199 667 7 549 164
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
-------------- -------------- -------------- -------------- -------------- ------------
------------------ ---------------- --------------- --------------- --------------- --------------- --------------
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
20. PROPERTY AND EQUIPMENT (continued)
Carrying amount
----------------- ---------- ---------- ---------- ---------- ---------- ----------
At 31 December
2015 585 511 1 186 878 722 726 1 047 811 3 058 160 6 601 086
----------------- ---------- ---------- ---------- ---------- ---------- ----------
========= ========= ========= ========= ========= =======
----------------- ---------- ---------- ---------- ---------- ---------- ----------
At 1 January
2015 101 375 1 219 651 1 288 861 972 494 2 762 886 6 345 267
----------------- ---------- ---------- ---------- ---------- ---------- ----------
========= ========= ========= ========= ========= =======
----------------- ---------- ---------- ---------- ---------- ---------- ----------
At 1 January
2014 - 1 257 350 2 108 704 1 249 813 2 757 076 7 372 943
----------------- ---------- ---------- ---------- ---------- ---------- ----------
========= ========= ========= ========= ========= =======
----------------- ---------- ---------- ---------- ---------- ---------- ----------
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
20. PROPERTY AND EQUIPMENT (continued)
Measurement of fair value
Fair value hierarchy
Immovable properties were revalued as at 31 December 2015 on the basis of valuations carried out by independent professional valuers, PMA Real Estate (Private) Limited. The valuation which conforms to International Valuation Standards, was in terms of the policy as set out in the accounting policies section. All movable assets are measured at their carrying amounts which are arrived at by the application of a depreciation charge on their cost values over the useful lives of the assets.
The valuation of land and buildings was arrived by applying yield rates of 8% on rental levels of between US$3 - US$7 per square metre.
The carrying cost less accumulated depreciation of the land and buildings had revaluations not been performed would be US$3 669 148 as at 31 December 2015 (2014 - US$3 343 677).
Level 3
The fair value of immovable properties of US$3 058 160 (2014 - US$2 762 886) has been categorised under Level 3 in the fair value hierarchy based on the inputs used for the valuation technique highlighted above.
The following table shows reconciliation between the opening and closing balances for level fair values:
31 December 31 December
2015 2014
------------------------- -------------- ----------------
US$ US$
------------------------- -------------- ----------------
At 1 January 2 762 886 2 757 076
------------------------- -------------- ----------------
Additions 393 509 -
------------------------- -------------- ----------------
Revaluation (loss)/gain (40 200) 60 610
------------------------- -------------- ----------------
Depreciation (58 035) (54 800)
------------------------- -------------- ----------------
------------- ---------------
------------------------- -------------- ----------------
Balance at 31 December 3 058 160 2 762 886
------------------------- -------------- ----------------
======== ==========
------------------------- -------------- ----------------
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
20. PROPERTY AND EQUIPMENT (continued)
Valuation technique and significant unobservable inputs
The following table shows the valuation technique used in measuring the fair value of investment properties, as well as the significant unobservable inputs used.
Valuation Technique Significant Unobservable Inter-relationship
Inputs between key
unobservable
inputs and fair
value measurement
----------------------------------------------------------------- -------------------------------------------------------- --------------------
The estimated
* The Investment Method was applied on all income * Expected market rental growth (weighted average - fair value would
producing properties. Market capitalisation rates negative 2%) increase/(decrease)
were derived from market sales evidence and were if expected market
determined in consultation with other investors and rental growth
property brokers in the market. * Average market yield was 10.5%. were higher/
(lower).
* The Direct Comparison Method was applied on all
residential properties, after PMA Real Estate
(Private) Limited identified various properties that
have been sold or which were on sale and situated in
comparable areas using the Main Space Equivalent
(MSE) principle. The total (MSE) of comparable areas
was then used to determine the value per square metre
of (MSE).
----------------------------------------------------------------- -------------------------------------------------------- --------------------
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
21. CAPITAL COMMITMENTS
31 December 31 December
2015 2014
-------------------------------- -------------- --------------
US$ US$
-------------------------------- -------------- --------------
Capital expenditure contracted
for 807 000 1 90 000
-------------------------------- -------------- --------------
Capital expenditure authorised
but not yet
contracted for 3 516 220 3 815 868
-------------------------------- -------------- --------------
------------- -------------
-------------------------------- -------------- --------------
4 323 220 4 005 868
-------------------------------- -------------- --------------
======== ========
-------------------------------- -------------- --------------
The capital expenditure will be funded from the Group's own resources.
22. CONTINGENT LIABILITIES
31 December 31 December
2015 2014
------------------------------- --------------- ----------------
US$ US$
------------------------------- --------------- ----------------
Guarantees 5 305 263 6 246 933
------------------------------- --------------- ----------------
Facilities approved but
not drawn down 39 468 072 33 341 817
------------------------------- --------------- ----------------
Irrevocable Letters of Credit 1 264 607 900 000
------------------------------- --------------- ----------------
-------------- ---------------
------------------------------- --------------- ----------------
46 037 942 40 488 750
------------------------------- --------------- ----------------
======== ========
------------------------------- --------------- ----------------
23. INVESTMENT IN ASSOCIATE
23.1 Investment in Altiwave Investments (Private) Limited
(MORE TO FOLLOW) Dow Jones Newswires
March 21, 2016 03:00 ET (07:00 GMT)
The Bank had a 25.5% interest in Altiwave Investments (Private) Limited which is the holding company of Lobels (Private) Limited. The investment arose from a Scheme of Arrangement agreed to by Lobels Holdings (Private) Limited shareholders and creditors (banks, suppliers and employees). Lobels Holdings (Private) Limited is in the bread and confectionery business. The combined Bank's interest was disposed off on 17 March 2015.
Altiwave Investments (Private) Limited is not listed on any public exchange. The following table illustrates the summarised unaudited financial information of the Bank's investment in Altiwave (Private) Limited as at 28 February 2015.
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
31 December 31December
2015 2014
-------------------------------- ---------------- -----------------
US$ US$
-------------------------------- ---------------- -----------------
Associate's statement of
financial position
-------------------------------- ---------------- -----------------
Current assets 12 798 956 15 974 685
-------------------------------- ---------------- -----------------
Non-current assets 10 243 534 14 361 606
-------------------------------- ---------------- -----------------
Current liabilities (5 212 870) (12 993 517)
-------------------------------- ---------------- -----------------
Non-current liabilities (30 857 918) (32 385 340)
-------------------------------- ---------------- -----------------
--------------- ----------------
-------------------------------- ---------------- -----------------
Equity (13 028 298) (15 042 566)
-------------------------------- ---------------- -----------------
========= ==========
-------------------------------- ---------------- -----------------
Share of associate's equity
(25.5%) (3 322 216) (3 835 854)
-------------------------------- ---------------- -----------------
======== ========
-------------------------------- ---------------- -----------------
Associate's revenue and profit
-------------------------------- ---------------- -----------------
Revenue 5 251 729 87 153 020
-------------------------------- ---------------- -----------------
======== =========
-------------------------------- ---------------- -----------------
Profit 422 251 5 348 411
-------------------------------- ---------------- -----------------
======== ==========
-------------------------------- ---------------- -----------------
Share of associate's profit
(25.5%) 107 674 1 363 845
-------------------------------- ---------------- -----------------
======== ==========
-------------------------------- ---------------- -----------------
Reconciliation of carrying
amount of investment
-------------------------------- ---------------- -----------------
1 January - -
-------------------------------- ---------------- -----------------
Increase in investment - -
-------------------------------- ---------------- -----------------
Share of profit in associate 107 674 1 363 845
-------------------------------- ---------------- -----------------
Allowance for impairment (107 674) (1 363 845)
-------------------------------- ---------------- -----------------
------------ -------------
-------------------------------- ---------------- -----------------
- -
-------------------------------- ---------------- -----------------
======= ========
-------------------------------- ---------------- -----------------
The investment in Altiwave Investments (Private) Limited had been fully impaired as the company had negative equity as at date of sale, 17 March 2015.
NMBZ HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2015
24. EXCHANGE RATES
The following exchange rates have been used to translate the foreign currency balances to United States dollars at period end:-
Mid-rate Mid-rate
------------------------ ----- ------------ ------------
31 December 31 December
2015 2014
------------------------ ----- ------------ ------------
US$ US$
------------------------ ----- ------------ ------------
British Pound Sterling GBP 1.4800 1.5564
------------------------ ----- ------------ ------------
South African Rand ZAR 15.5039 11.5764
------------------------ ----- ------------ ------------
European Euro EUR 1.0882 1.2159
------------------------ ----- ------------ ------------
Botswana Pula BWP 11.1111 8.5034
------------------------ ----- ------------ ------------
25. EVENTS AFTER REPORTING DATE
Following the decision by Commerzbank AG to move out of the United States Dollars (USD) clearing business for Zimbabwean banks by 31 March 2016, the Bank changed its correspondent banks. The decision taken by Commerzbank AG does not only affect NMB Bank Limited but affects all other Banks who were using Commerzbank AG. Consequently, our customers can now receive USDs from offshore sources using our new accounts with Ecobank International, France or Bank of China, South Africa. Given the swift action taken by management, the impact on the Bank's operations has been minimal.
NMB BANK LIMITED
STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2015
31 December 31 December 2014
2015
--------------------------------- ------ ----------------- -----------------
Note US$ US$
--------------------------------- ------ ----------------- -----------------
Interest income 35 761 355 31 072 461
----------------------------------------- ----------------- -----------------
Interest expense (15 118 292) (12 651 722)
----------------------------------------- ----------------- -----------------
---------------- --------------
--------------------------------- ------ ----------------- -----------------
Net interest income 20 643 063 18 420 739
----------------------------------------- ----------------- -----------------
Net foreign exchange
gains 1 416 445 1 822 432
----------------------------------------- ----------------- -----------------
Fee and commissions income 20 984 694 15 121 536
----------------------------------------- ----------------- -----------------
---------------- --------------
--------------------------------- ------ ----------------- -----------------
Revenue 43 044 202 35 364 707
----------------------------------------- ----------------- -----------------
Non-interest income a 1 293 435 59 769
--------------------------------- ------ ----------------- -----------------
Operating expenditure b (26 872 649) (27 967 159)
--------------------------------- ------ ----------------- -----------------
Impairment losses on
loans, advances and debentures (9 496 601) (5 017 362)
----------------------------------------- ----------------- -----------------
-------------- --------------
--------------------------------- ------ ----------------- -----------------
Profit before taxation 7 968 387 2 439 955
----------------------------------------- ----------------- -----------------
Taxation (2 425 049) (767 222)
----------------------------------------- ----------------- -----------------
-------------- -------------
--------------------------------- ------ ----------------- -----------------
Profit for the period 5 543 338 1 672 733
----------------------------------------- ----------------- -----------------
Other comprehensive income,
net of tax c 2 970 10 180
--------------------------------- ------ ----------------- -----------------
------------- ------------
--------------------------------- ------ ----------------- -----------------
Total comprehensive income
(MORE TO FOLLOW) Dow Jones Newswires
March 21, 2016 03:00 ET (07:00 GMT)
for the period 5 546 308 1 682 913
----------------------------------------- ----------------- -----------------
======= ========
--------------------------------- ------ ----------------- -----------------
Earnings per share (US
cents)
--------------------------------- ------ ----------------- -----------------
-Basic d 33.60 10.20
--------------------------------- ------ ----------------- -----------------
NMB BANK LIMITED
STATEMENT OF FINANCIAL POSITION
as at 31 December 2015
31 December 31 December
2015 2014
--------------------------- ------ ------------------- -----------------
Note US$ US$
--------------------------- ------ ------------------- -----------------
SHAREHOLDER'S FUNDS
--------------------------- ------ ------------------- -----------------
Share capital e 16 506 16 506
--------------------------- ------ ------------------- -----------------
Share Premium 31 474 502 31 474 502
----------------------------------- ------------------- -----------------
Regulatory Reserve 3 746 729 3 293 699
----------------------------------- ------------------- -----------------
Retained earnings 14 439 723 9 346 445
----------------------------------- ------------------- -----------------
--------------- ---------------
--------------------------- ------ ------------------- -----------------
Total shareholder's
funds 49 677 460 44 131 152
----------------------------------- ------------------- -----------------
LIABILITIES
--------------------------- ------ ------------------- -----------------
Deposits and other
liabilities 283 257 535 240 971 888
----------------------------------- ------------------- -----------------
Subordinated term loan 1 414 144 1 407 964
----------------------------------- ------------------- -----------------
Current tax liabilities 52 443 -
--------------------------- ------ ------------------- -----------------
----------------- ----------------
--------------------------- ------ ------------------- -----------------
Total liabilities 284 724 122 242 379 852
----------------------------------- ------------------- -----------------
---------------- ---------------
--------------------------- ------ ------------------- -----------------
Total shareholder's
funds and liabilities 334 401 582 286 511 004
----------------------------------- ------------------- -----------------
========== =========
--------------------------- ------ ------------------- -----------------
ASSETS
--------------------------- ------ ------------------- -----------------
Cash and cash equivalents f 63 439 347 54 750 561
--------------------------- ------ ------------------- -----------------
Current tax assets - 1 361 456
----------------------------------- ------------------- -----------------
Investment securities 14 547 992 3 874 525
----------------------------------- ------------------- -----------------
Amount owing from Holding
Company 610 604 610 604
----------------------------------- ------------------- -----------------
Investment in debentures - 4 614 047
----------------------------------- ------------------- -----------------
Loans, advances and
other assets 235 144 444 203 418 514
----------------------------------- ------------------- -----------------
Non-current assets
held for sale 2 264 300 2 267 300
----------------------------------- ------------------- -----------------
Unquoted investments 77 805 81 390
----------------------------------- ------------------- -----------------
Investment in associate - -
--------------------------- ------ ------------------- -----------------
Investment properties g 8 125 800 4 453 300
--------------------------- ------ ------------------- -----------------
Intangible assets 1 689 385 1 950 733
----------------------------------- ------------------- -----------------
Property and equipment 6 601 086 6 345 267
----------------------------------- ------------------- -----------------
Deferred tax asset 1 900 819 2 783 307
----------------------------------- ------------------- -----------------
------------------ ---------------
--------------------------- ------ ------------------- -----------------
Total assets 334 401 582 286 511 004
----------------------------------- ------------------- -----------------
=========== =========
---------------------------------- ------------------- -----------------
NMB BANK LIMITED
STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2015
Share Share Regulatory Retained
Capital Premium Reserve Earnings Total
------------------------------ --------- --------------- ---------------- ----------------- ---------------
US$ US$ US$ US$ US$
------------------------------ --------- --------------- ---------------- ----------------- ---------------
42 448
Balances 1 January 2014 16 506 31 474 502 2 154 252 8 802 979 239
------------------------------ --------- --------------- ---------------- ----------------- ---------------
Total comprehensive income
for the year - - - 1 682 913 1 682 913
------------------------------ --------- --------------- ---------------- ----------------- ---------------
Impairment allowance for
loans and advances - - 1 139 447 (1 139 447) -
------------------------------ --------- --------------- ---------------- ----------------- ---------------
-------- ------------- --------------- ---------------- --------------
------------------------------ --------- --------------- ---------------- ----------------- ---------------
44 131
Balances at 31 December 2014 16 506 31 474 502 3 293 699 9 346 445 152
------------------------------ --------- --------------- ---------------- ----------------- ---------------
Total comprehensive income
for the year - - - 5 546 308 5 546 308
------------------------------ --------- --------------- ---------------- ----------------- ---------------
Impairment allowance for
loans and advances - - 453 030 (453 030) -
------------------------------ --------- --------------- ---------------- ----------------- ---------------
-------- -------------- --------------- ------------- --------------
------------------------------ --------- --------------- ---------------- ----------------- ---------------
49 677
Balances at 31 December 2015 16 506 31 474 502 3 746 729 14 439 723 460
------------------------------ --------- --------------- ---------------- ----------------- ---------------
===== ======== ========= ======== =========
------------------------------ --------- --------------- ---------------- ----------------- ---------------
NMB BANK LIMITED
STATEMENT OF CASH FLOWS
(MORE TO FOLLOW) Dow Jones Newswires
March 21, 2016 03:00 ET (07:00 GMT)
for the year ended 31 December 2015
31 December 31 December
2015 2014
--------------------------------------- ----------------- ----------------
CASH FLOWS FROM OPERATING ACTIVITIES US$ US$
--------------------------------------- ----------------- ----------------
Profit before taxation 7 968 387 2 439 955
--------------------------------------- ----------------- ----------------
Non-cash items
--------------------------------------- ----------------- ----------------
-Impairment losses on loans,
advances and debentures 9 496 601 5 017 362
--------------------------------------- ----------------- ----------------
-Non-current assets held for
sale fair value adjustment 3 000 (3 000)
--------------------------------------- ----------------- ----------------
-Investment properties fair value
adjustment (118 278) (37 800)
--------------------------------------- ----------------- ----------------
-Profit on disposal of property
and equipment 46 924 (6 274)
--------------------------------------- ----------------- ----------------
-Loss on disposal of property
and equipment (included in staff
costs) 68 470 177 413
--------------------------------------- ----------------- ----------------
-Profit on disposal of non-current (635 500) -
assets held for sale
--------------------------------------- ----------------- ----------------
-Quoted and other investments
fair value adjustment 3 585 5 188
--------------------------------------- ----------------- ----------------
-Impairment reversal on land
and buildings 44 200 (46 900)
--------------------------------------- ----------------- ----------------
-Depreciation 1 690 902 1 899 047
--------------------------------------- ----------------- ----------------
-Amortisation of intangible assets 509 687 337 118
--------------------------------------- ----------------- ----------------
---------------- --------------
--------------------------------------- ----------------- ----------------
Operating cash flows before changes
in operating
--------------------------------------- ----------------- ----------------
assets and liabilities 19 077 978 9 771 733
--------------------------------------- ----------------- ----------------
Changes in operating assets and
liabilities
--------------------------------------- ----------------- ----------------
Deposits and other liabilities 42 285 647 24 951 482
--------------------------------------- ----------------- ----------------
Amount owing from holding company - 136 440
--------------------------------------- ----------------- ----------------
Investment in debentures 4 614 047 (629 324)
--------------------------------------- ----------------- ----------------
Loans, advances and other assets (41 222 531) (27 064 142)
--------------------------------------- ----------------- ----------------
--------------- ---------------
--------------------------------------- ----------------- ----------------
Net cash generated from operations 24 755 141 7 166 189
--------------------------------------- ----------------- ----------------
--------------- ---------------
--------------------------------------- ----------------- ----------------
Taxation
--------------------------------------- ----------------- ----------------
Capital gains tax paid (91 850) (1 750)
--------------------------------------- ----------------- ----------------
Corporate tax paid (37 843) (422 299)
--------------------------------------- ----------------- ----------------
-------------- ---------------
--------------------------------------- ----------------- ----------------
Net cash inflow from operating
activities 24 625 448 6 742 140
--------------------------------------- ----------------- ----------------
-------------- ---------------
--------------------------------------- ----------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES
--------------------------------------- ----------------- ----------------
Proceeds on disposal of non-current
assets held for sale - 39 000
--------------------------------------- ----------------- ----------------
Proceeds on disposal of property
and equipment 101 766 10 177
--------------------------------------- ----------------- ----------------
Acquisition of intangible assets (248 339) (623 482)
--------------------------------------- ----------------- ----------------
Acquisition of property and equipment (2 271 943) (992 076)
--------------------------------------- ----------------- ----------------
Acquistion of investment properties (8 230 860) (30 200)
--------------------------------------- ----------------- ----------------
(Acquisition)/maturity of investment
securities (10 673 466) 810 945
--------------------------------------- ----------------- ----------------
Proceeds on disposal of investment 5 380 000 -
properties
--------------------------------------- ----------------- ----------------
---------------- -------------
--------------------------------------- ----------------- ----------------
Net cash outflow from investing
activities (15 942 842) (785 636)
--------------------------------------- ----------------- ----------------
-------------- -------------
--------------------------------------- ----------------- ----------------
Net cash inflow before financing
activities 8 682 606 5 956 504
--------------------------------------- ----------------- ----------------
-------------- -------------
--------------------------------------- ----------------- ----------------
NMB BANK LIMITED
STATEMENT OF CASH FLOWS
for the year ended 31 December 2015
31 December 31 December
2015 2014
-------------------------------------- --------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES US$ US$
-------------------------------------- --------------- ----------------
Payment of interest on subordinated
term loan (128 496) (218 413)
-------------------------------------- --------------- ----------------
Interest capitalised on subordinated
term loan 134 676 140 487
-------------------------------------- --------------- ----------------
-------------- ---------------
-------------------------------------- --------------- ----------------
Net cash inflow/(outflow) from
financing activities 6 180 (77 926)
-------------------------------------- --------------- ----------------
-------------- ---------------
-------------------------------------- --------------- ----------------
Net increase in cash and cash
equivalents 8 688 786 5 878 578
-------------------------------------- --------------- ----------------
Cash and cash equivalents at
beginning of the year 54 750 561 48 871 983
-------------------------------------- --------------- ----------------
-------------- ---------------
-------------------------------------- --------------- ----------------
Cash and cash equivalents at
the end of the year (note f) 63 439 347 54 750 561
-------------------------------------- --------------- ----------------
======== ========
-------------------------------------- --------------- ----------------
NMB BANK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2015
(MORE TO FOLLOW) Dow Jones Newswires
March 21, 2016 03:00 ET (07:00 GMT)
There are no material differences between the Bank and the Holding company as the Bank is the principal operating subsidiary of the Group. The notes to the financial statements under NMBZ Holdings Limited are therefore the same as those of the Bank in every material respect.
a. NON-INTEREST income
31 December 31 December
2015 2014
---------------------------------- ----------------- --------------
US$ US$
---------------------------------- ----------------- --------------
Quoted and other investments
fair value adjustments (3 585) 5 188
---------------------------------- ----------------- --------------
Profit on disposal of investment 635 500 -
properties
---------------------------------- ----------------- --------------
(Loss)/profit on disposal
of property and equipment (46 924) 6 274
---------------------------------- ----------------- --------------
Fair value adjustment of
non-current assets held
for sale (3 000) 3 000
---------------------------------- ----------------- --------------
Fair value adjustment on
investment properties 118 278 37 800
---------------------------------- ----------------- --------------
Rental income 49 523 36 160
---------------------------------- ----------------- --------------
Bad debts recovered 430 851 1 502
---------------------------------- ----------------- --------------
Other operating income 112 792 (30 155)
---------------------------------- ----------------- --------------
-------------- ------------
---------------------------------- ----------------- --------------
1 293 435 59 769
---------------------------------- ----------------- --------------
======== ======
---------------------------------- ----------------- --------------
b. Operating EXPENDITURE
31 December 31 December
2015 2014
-------------------------------------- --------------- ---------------
US$ US$
-------------------------------------- --------------- ---------------
The operating profit is
after recognising the following:
-------------------------------------- --------------- ---------------
Administration costs 12 702 704 12 365 273
-------------------------------------- --------------- ---------------
Audit fees:
-------------------------------------- --------------- ---------------
- Current year 85 557 74 014
-------------------------------------- --------------- ---------------
- Prior year 109 325 140 433
-------------------------------------- --------------- ---------------
Impairment/(impairment reversal)
on land and
buildings 44 200 (46 900)
-------------------------------------- --------------- ---------------
Depreciation 1 690 902 1 899 047
-------------------------------------- --------------- ---------------
Amortisation of intangible
assets 509 687 337 118
-------------------------------------- --------------- ---------------
Directors' remuneration 499 024 923 008
-------------------------------------- --------------- ---------------
- Fees for services as directors 232 705 316 255
-------------------------------------- --------------- ---------------
- Other emoluments 266 319 606 753
-------------------------------------- --------------- ---------------
Staff costs -salaries, allowances
and related costs 10 362 780 11 189 468
-------------------------------------- --------------- ---------------
-termination benefits 868 470 1 085 698
-------------------------------------- --------------- ---------------
-------------- --------------
-------------------------------------- --------------- ---------------
26 872 649 27 967 159
-------------------------------------- --------------- ---------------
======== ========
-------------------------------------- --------------- ---------------
NMB BANK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2015
c. OTHER COMPREHENSIVE INCOME
31 December 31 December
2015 2014
------------------------------ ------------ -------------
US$ US$
------------------------------ ------------ -------------
Gross revaluation adjustment
on land and
buildings 4 000 13 710
------------------------------ ------------ -------------
Tax effect (1 030) (3 530)
------------------------------ ------------ -------------
----------- ------------
------------------------------ ------------ -------------
2 970 10 180
------------------------------ ------------ -------------
====== ======
------------------------------ ------------ -------------
d. EARNINGS PER SHARE
The calculation of earnings per share is based on the following figures:
d.1 Earnings
31 December 31 December
2015 2014
----------------------- ------------ ------------
US$ US$
----------------------- ------------ ------------
Attributable earnings 5 546 308 1 682 913
----------------------- ------------ ------------
d.2 Number of shares
Weighted average shares
in issue 16 506 050 16 503 813
------------------------- ----------- -----------
d.3 Earnings per share (US cents)
Basic 33.60 10.20
------- ------ ------
NMB BANK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2015
e. SHARE CAPITAL e.1 Authorised
The authorised ordinary share capital at 31 December 2015 is at the historical cost figure of US$25 000 (2014 - US$25 000) comprising 25 million ordinary shares of US$0.001each.
e.2 Issued and fully paid
The issued share capital at 31 December 2015 is at the historical cost figure of US$16 506 (2014 - US$16 506) comprising 16 506 050 (2014 - 16 506 050) ordinary shares of US$0.001 each
f. CASH AND CASH EQUIVALENTS
31 December 31 December
2015 2014
--------------------------- -------------- ----------------
US$ US$
--------------------------- -------------- ----------------
Balances with the Central
Bank 26 238 681 11 408 222
--------------------------- -------------- ----------------
Current, nostro accounts
and cash 11 700 666 15 842 339
--------------------------- -------------- ----------------
Interbank placements 25 500 000 27 500 000
--------------------------- -------------- ----------------
------------- ---------------
--------------------------- -------------- ----------------
63 439 347 54 750 561
--------------------------- -------------- ----------------
======== =========
--------------------------- -------------- ----------------
g. INVESTMENT PROPERTIES
31 December 31 December
2015 2014
---------------------------- -------------- --------------
US$ US$
---------------------------- -------------- --------------
At 1 January 4 453 300 4 385 300
---------------------------- -------------- --------------
Transfer from property and 67 862 -
equipment
---------------------------- -------------- --------------
Improvements 8 230 860 30 200
---------------------------- -------------- --------------
Disposals (4 744 500) -
---------------------------- -------------- --------------
Fair value adjustments 118 278 37 800
---------------------------- -------------- --------------
------------- -------------
---------------------------- -------------- --------------
At 31 December 8 125 800 4 453 300
---------------------------- -------------- --------------
======== ========
---------------------------- -------------- --------------
(MORE TO FOLLOW) Dow Jones Newswires
March 21, 2016 03:00 ET (07:00 GMT)
Investment properties comprise commercial properties and residential properties that are leased out to third parties and land held for capital appreciation. All investment properties were not encumbered.
Measurement of fair value
Fair value hierarchy
The fair value of the Bank's investment properties as at 31 December 2015 has been arrived at on the basis of valuations carried out by independent professional valuers, PMA Real Estate (Private) Limited. The valuation which conforms to International Valuation Standards, was in terms of the policy as set out in the accounting policies section and was derived with reference to market information close to the date of the valuation.
The Bank has no restrictions on the realisability of all investment properties and no contractual obligations to purchase, construct or develop the investment properties or for repairs, maintenance and enhancements.
Rental income amounting to US$49 523 (2014 - US$36 160) was received and no operating expenses were incurred on the investment properties in the current year due to the net leasing arrangement on the properties.
NMB BANK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2014
Level 2
The fair value for investment properties of US$2 816 800 (2014 - US$2 659 300) has been categorised under Level 2 in fair value hierarchy based on the inputs used for the valuation technique highlighted above.
The following table shows reconciliation between the opening and closing balances for Level 2 fair values:
31 December 31 December
2015 2014
------------------------ ---------------- --------------
US$ US$
------------------------ ---------------- --------------
At 1 January 2 659 300 2 575 300
------------------------ ---------------- --------------
Additions 3 200 000 10 200
------------------------ ---------------- --------------
Disposals (3 200 000) -
------------------------ ---------------- --------------
Fair value adjustments 157 500 73 800
------------------------ ---------------- --------------
--------------- -------------
------------------------ ---------------- --------------
Balance at 31 December 2 816 800 2 659 300
------------------------ ---------------- --------------
========= ========
------------------------ ---------------- --------------
The values were arrived at by applying a market rate of US$36.50 per square metre.
Level 3
The fair value for investment properties of US$5 309 000 (2014 - US$1 794 000) has been categorised under Level 3 in fair value hierarchy based on the inputs used for the valuation technique highlighted above.
The following table shows reconciliation between the opening and closing balances for Level 3 fair values:
31 December 31 December
2015 2014
---------------------------- ---------------- --------------
US$ US$
---------------------------- ---------------- --------------
At 1 January 1 794 000 1 810 000
---------------------------- ---------------- --------------
Transfer from property and 67 862 -
equipment
---------------------------- ---------------- --------------
Additions 5 030 860 20 000
---------------------------- ---------------- --------------
Disposals (1 544 500) -
---------------------------- ---------------- --------------
Fair value adjustments (39 222) (36 000)
---------------------------- ---------------- --------------
--------------- -------------
---------------------------- ---------------- --------------
Balance at 31 December 5 309 000 1 794 000
---------------------------- ---------------- --------------
========= ========
---------------------------- ---------------- --------------
NMB BANK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2015
The values were arrived at by applying yield rates of 8% on rental values of between US$3 - US$7 per square metre. The properties are leased out under operating leases to various tenants.
Valuation technique and significant unobservable inputs
The following table shows the valuation technique used in measuring the fair value of investment properties, as well as the significant unobservable inputs used.
Valuation Technique Significant Unobservable Inter-relationship
Inputs between key unobservable
inputs and fair
value measurement
----------------------------------------------------------------- ---------------------------------------------------------- ---------------------------------------------------------
The estimated fair
* The Investment Method was applied on all income * Expected market rental growth (weighted average - value would increase/
producing properties. Market capitalisation rates negative 2%); (decrease) if:
were derived from market sales evidence and were * expected market rental growth were higher/(lower);
determined in consultation with other investors and
property brokers in the market. * Void period (average 7 months after the end of each
lease); * void periods were shorter/(longer);
* The Direct Comparison Method was applied on all
residential properties, after PMA Real Estate * Occupancy rate (20 -30%), weighted average 25%; * the occupancy rates were higher/ (lower).
(Private) Limited identified various properties that
have been sold or which were on sale and situated in
comparable areas using the Main Space Equivalent * Average market yield was 10.5%.
(MSE) principle. The total (MSE) of comparable areas
was then used to determine the value per square metre
of (MSE).
----------------------------------------------------------------- ---------------------------------------------------------- ---------------------------------------------------------
NMB BANK LIMITED
h. CORPORATE GOVERNANCE AND RISK MANAGEMENT 1. RESPONSIBILITY
These financial statements are the responsibility of the directors. This responsibility includes the setting up of internal control and risk management processes, which are monitored independently. The information contained in these financial statements has been prepared on the going concern basis and is in accordance with the provisions of the Companies Act (Chapter 24:03), the Banking Act (Chapter 24:20) and International Financial Reporting Standards.
2. CORPORATE GOVERNANCE
The Group adheres to principles of corporate governance derived from the King III Report, the United Kingdom Combined Code and RBZ corporate governance guidelines. The Group is cognisant of its duty to conduct business with due care and in good faith in order to safeguard all stakeholders' interests.
3. BOARD OF DIRECTORS
Board appointments are made to ensure a variety of skills and expertise on the Board. Non-executive directors are of such calibre as to provide independence to the Board. The Chairman of the Board is an independent non-executive director. The Board is supported by mandatory committees in executing its responsibilities. The Board meets at least quarterly to assess risk, review performance and provide guidance to management on both operational and policy issues.
The Board conducts an annual peer based evaluation on the effectiveness of its activities. The process involves the members evaluating each other collectively as a board and individually as members. The evaluation, as prescribed by the RBZ, takes into account the structure of the board, effectiveness of committees, strategic leadership, corporate social responsibility, attendance and participation of members and weaknesses noted. Remedial plans are invoked to address identified weaknesses with a view to continually improve the performance and effectiveness of the Board and its members.
(MORE TO FOLLOW) Dow Jones Newswires
March 21, 2016 03:00 ET (07:00 GMT)
NMB BANK LIMITED
3.1 Directors' attendance at (NMB Bank Ltd Board is the same as the NMBZ Holdings Limited Board)
Human
Asset and Resources,
Liability Remuneration
Management Loans and
Board of Audit Risk Committee Review Nominations Credit
Directors Committee Management (ALCO) Committee Committee Committee
& Finance
Committee
------------------- ------------- -------------- -------------- -------------- ------------- --------------- -------------
Mr. B. A.
Chikwanha**** 4 4 3 3 1 1 4 4 9 8
------------------- ---- ------- --- --------- --- --------- ---- -------- ---- ------- ---- --------- ---- -------
Mr. T. N.
Mundawarara* 1 1 1 1 1 1 2 2
------------------- ---- ------- --- --------- --- --------- ---- -------- ---- ------- ---- --------- ---- -------
Mr. A. M. T.
Mutsonziwa** 2 2 2 1 2 2 3 3
------------------- ---- ------- --- --------- --- --------- ---- -------- ---- ------- ---- --------- ---- -------
Mr. B. P. Washaya
(E) 4 4 4 4 4 4 11 11
------------------- ---- ------- --- --------- --- --------- ---- -------- ---- ------- ---- --------- ---- -------
Mr. B. W.
Madzivire******** 4 4 4 4 3 3 3 3
------------------- ---- ------- --- --------- --- --------- ---- -------- ---- ------- ---- --------- ---- -------
Ms. M. R. Svova 4 4 4 4 2 2 11 11
------------------- ---- ------- --- --------- --- --------- ---- -------- ---- ------- ---- --------- ---- -------
Mr. J.
Chigwedere** 2 1 1 1 2 2
------------------- ---- ------- --- --------- --- --------- ---- -------- ---- ------- ---- --------- ---- -------
Mr. J.
Chenevix-Trench 4 4 4 4 4 - 5 5
------------------- ---- ------- --- --------- --- --------- ---- -------- ---- ------- ---- --------- ---- -------
Mr. B.A.M.
Zwinkels 4 4 4 4 4 2 5 5
------------------- ---- ------- --- --------- --- --------- ---- -------- ---- ------- ---- --------- ---- -------
Mr. C.I.F. Ndiaye 4 4 4 4 4 4 5 5
------------------- ---- ------- --- --------- --- --------- ---- -------- ---- ------- ---- --------- ---- -------
Mr. R. Keighley*** 2 2 2 2 2 2 5 5
------------------- ---- ------- --- --------- --- --------- ---- -------- ---- ------- ---- --------- ---- -------
Ms.J.Maguranyanga
***** 2 1 2 2 2 2 3 3
------------------- ---- ------- --- --------- --- --------- ---- -------- ---- ------- ---- --------- ---- -------
Mr.
E.Sandersen****** 2 1 2 2 2 2 2 2
------------------- ---- ------- --- --------- --- --------- ---- -------- ---- ------- ---- --------- ---- -------
Mr.K.Qurashi*****
** 1 1 2 2 2 2 4 4
------------------- ---- ------- --- --------- --- --------- ---- -------- ---- ------- ---- --------- ---- -------
Meetings planned
-------------------
KEY
E - Executive
*Resigned on 18 March 2015.
**Retired on 21 May 2015.
***Resigned on 3 July 2015.
****Became a member of the Credit and ALCO & Finance Committees on 19 March 2015 and was a member of the Risk Management and Loans Review Committees until 18 March 2015.
*****Appointed on 10 July 2015.
******Appointed on 13 August 2015
*******Appointed on 19 August 2015.
********Stepped down from the Risk Committee with effect from 19 August 2015 and resigned from the board with effect from 31 December 2015.
NMB BANK LIMITED
4. RISK MANAGEMENT
The Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework. The Board has established the Board Asset and Liability Management Committee (ALCO) and Board Risk Committee, which are responsible for defining the Group's risk universe, developing policies and monitoring implementation. The Group has complied with Basel II implementation timelines set by the Reserve Bank of Zimbabwe.
Risk management is linked logically from the level of individual transactions to the Group level. Risk management activities broadly take place simultaneously at the following different hierarchy levels:
a) Strategic Level: This involves risk management functions performed by senior management and the board of directors. It includes the definition of risk, ascertaining the Group's risk appetite, formulating strategy and policy for managing risk and establishes adequate systems and controls to ensure overall risk remains within acceptable levels and is adequately compensated.
b) Macro Level: It encompasses risk management within a business area or across business lines. These risk management functions are performed by middle management.
c) Micro Level: This involves "On-the-line" risk management where risks are actually created. These are the risk management activities performed by individuals who assume risk on behalf of the organization such as Treasury Front Office, Corporate Banking, Retail banking etc. The risk management in these areas is confined to operational procedures set by management.
Risk management is premised on four (4) mutually reinforcing pillars, namely:
a) adequate board and senior management oversight; b) adequate strategy, policies, procedures and limits; c) adequate risk identification, measurement, monitoring and information systems; and d) comprehensive internal controls and independent reviews. 4.1 Credit risk
Credit risk is the risk that a financial contract will not be honoured according to the original set of terms. The risk arises when borrowers or counterparties to a financial instrument fail to meet their contractual obligations. The Group reviewed its credit risk management structures aimed at enhancing credit risk and asset quality. The Group's general credit strategies centre on sound credit granting process, diligent credit monitoring and strong loan collection and recovery. There is a separation between loan collection and recovery. There is a separation between loan granting and credit monitoring to ensure independency and effective management of the loan portfolio. The Board has put in place sanctioning committees with specific credit approval limits. The Credit Management department does the initial review of all applications before recommending them to the Executive Credit Committee and finally the Board Credit Committee depending on the loan amount. The Group has in place a Board Loans Review Committee responsible for reviewing the quality of the loan book and adequacy or loan loss provisions.
NMB BANK LIMITED
4. RISK MANAGEMENT (continued) 4.1 Credit Risk (continued)
The Group finalised the implementation of an end to end credit risk management solution. The system automated the bank's credit process from loan origination, appraisal, monitoring and collections. The system comes with a robust loan monitoring and reporting module which is critical in managing credit risk. In view of the group's move into the mass market, retail credit has become a key area of focus. The group has put in place robust personal loan monitoring systems and structures to mitigate retail loan delinquencies. This includes a rigorous scheme assessment and a dedicated team pre-delinquency team and a separate recoveries team.
Credit Management
-- Responsible for evaluating & approving credit proposals from the business units.
-- Together with business units, has primary responsibility on the quality of the loan book.
-- Reviewing credit policy for approval by the Board Credit Committee.
-- Reviewing business unit level credit portfolios to ascertain changes in the credit quality of individual customers or other counterparties as well as the overall portfolio and detect unusual developments.
-- Approve initial customer internal credit grades or recommend to the Credit Committees for approval.
-- Setting the credit risk appetite parameters. -- Ensure the Group adheres to limits, mandates and its credit policy.
-- Ensure adherence to facility covenants and conditions of sanction e.g. annual audits, gearing levels, management accounts.
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-- Manage trends in asset and portfolio composition, quality and growth and non-performing loans.
-- Manage concentration risk both in terms of single borrowers or group as well as sector concentrations and the review of such limits.
Credit Monitoring and Financial Modelling
-- Independent Credit Risk Management. -- Independent on-going monitoring of individual credit and portfolios.
-- Triggers remedial actions to protect the interests of the Group, if appropriate (e.g. in relation to deteriorated credits).
-- Monitors the on-going development and enhancement of credit risk management across the Group.
-- Reviews the Internal Credit Rating System. -- On-going championing of the Basel II methodologies across the Group.
-- Ensures consistency in the rating processes and performs independent review of credit grades to ensure they conform to the rating standards.
-- Confirm the appropriateness of the credit risk strategy and policy or recommends necessary revisions in response to changes/trends identified.
NMB BANK LIMITED
4. RISK MANAGEMENT (continued) 4.1 Credit Risk (continued)
Credit Administration
-- Prepares and keeps custody of all facility letters. -- Security registration. -- Safe custody of security documents.
-- Ensures all conditions of sanction are fulfilled before allowing drawdown or limit marking.
-- Review of credit files for documentation compliance e.g. call reports, management accounts.
Recoveries
The recoveries unit is responsible for all collections and ensures that the Group maximizes recoveries from Non-Performing Loans (NPLs).
4.2 Market risk
This is the exposure of the Group's on and off balance sheet positions to adverse movement in market prices resulting in a loss in earnings and capital. The market prices will range from money market (interest rate risk), foreign exchange and equity markets in which the bank operates. The Group has in place a Management Asset and Liability Committee (ALCO) which monitors market risk and recommends the appropriate levels to which the Group should be exposed at any time. Net Interest Margin is the primary measure of interest rate risk, supported by periodic stress tests to assess the Group's ability to withstand stressed market conditions. On foreign exchange risk, the bank monitors currency mismatches and make adjustments depending on exchange rate movement forecast. The mismatches are also contained within 10% of the Group's capital position.
ALCO meets on a monthly basis and operates within the prudential guidelines and policies established by the Board ALCO. The board ALCO is responsible for setting exposure thresholds and limits, and meets on a quarterly basis. The downward revision of interest rates and the volatility of the South African Rand were the major sources of market risk during the year under review.
4.3 Liquidity risk
Liquidity risk is the risk of financial loss arising from the inability of the Group to fund asset increases or meet obligations as they fall due without incurring unacceptable costs or losses. The Group identifies this risk through maturity profiling of assets and liabilities and assessment of expected cash flows and the availability of collateral which could be used if additional funding is required.
The daily liquidity position is monitored and regular liquidity stress testing is conducted under a variety of scenarios covering both normal and more severe market conditions. All liquidity policies and procedures are subject to review and approval by the Board ALCO.
The key measure used by the bank for managing liquidity risk is the ratio of net liquid assets to deposits to customers. The Group also actively monitors its loans to deposit ratio against a set threshold in a bid to monitor and limit funding risk. The group monitors funding concentration risk by reviewing the ratio of top 20 depositors to the total funding. Funding mix is also monitored by monitoring the contribution of wholesale and demand deposits to the total funding for the bank. Liquidity risk is monitored through a daily liquidity meeting. This is augmented by a monthly management ALCO and a quarterly board ALCO.
NMB BANK LIMITED
4. RISK MANAGEMENT (continued) 4.4 Operational risk
This risk is inherent in all business activities and is the risk of loss arising from inadequate or failed internal processes, people, systems or from external events. The Group utilises monthly Key Risk Indicators to monitor operational risk in all units. Further to this, the Group has an elaborate Operational Loss reporting system in which all incidents with a material impact on the well-being of the Group are reported to risk management. The risk department conducts periodic risk assessments on all the units within the Group aimed at identifying the top risks and ways to minimise their impact. There is a Board Risk Committee whose function is to ensure that this risk is minimized. The Risk Committee with the assistance of the internal audit function and the Risk Management department assesses the adequacy of the internal controls and makes the necessary recommendations to the Board.
4.5 Legal and compliance risk
Legal risk is risk from uncertainty due to legal actions or uncertainty in the applicability or interpretation of contracts, laws or regulations. Legal risk may entail such issues as contract formation, capacity and contract frustration. Compliance risk is the risk arising from non - compliance with laws and regulations. To manage this risk permanent relationships are maintained with firms of legal practitioners and access to legal advice is readily available to all departments. The Group has an independent compliance function which is responsible for identifying and monitoring all compliance issues and ensures the Group complies with all regulatory and statutory requirements.
4.6 Reputational risk
Reputation risk is the risk of loss of business as a result of negative publicity or negative perceptions by the market with regards to the way the Group conducts its business. To manage this risk, the Group strictly monitors customers' complaints, continuously train staff at all levels, conducts market surveys and periodic reviews of business practices through its Internal Audit department. The directors are satisfied with the risk management processes in the Group as these have contributed to the minimisation of losses arising from risky exposures.
4.7 Strategic risk
This refers to current and prospective impact on a Group's earnings and capital arising from adverse business decisions or implementing strategies that are not consistent with the internal and external environment. To manage this risk, the Group always has a strategic plan that is adopted by the Board of Directors. Further, attainment of strategic objectives by the various departments is monitored periodically at management level.
4.8 Risk Ratings 4.8.1 Reserve Bank of Zimbabwe Ratings
The Reserve Bank of Zimbabwe conducted an onsite inspection on the Group's banking subsidiary in 2013 and detailed below were the final ratings. Subsequent to this, a further review was done in 2014 during which the RBZ indicated that the bank had attended to their satisfaction on all matters raised in the 2013 inspection.
NMB BANK LIMITED
4. RISK MANAGEMENT (continued)
4.8.1.1 CAMELS* Ratings
Latest Previous Previous RAS
CAMELS Component RBS** Ratings RAS Ratings Ratings
30/06/2013 31/01/2008 30/06/2007
-------------------- --------------- ------------- -------------
Capital Adequacy 2 4 4
-------------------- --------------- ------------- -------------
Asset Quality 4 2 3
-------------------- --------------- ------------- -------------
Management 3 3 3
-------------------- --------------- ------------- -------------
Earnings 2 3 3
-------------------- --------------- ------------- -------------
Liquidity 2 3 3
-------------------- --------------- ------------- -------------
Sensitivity to
Market Risk 2 3 3
-------------------- --------------- ------------- -------------
Composite Rating 3 3 4
-------------------- --------------- ------------- -------------
*CAMELS is an acronym for Capital Adequacy, Asset quality, Management, Earnings, Liquidity and Sensitivity to Market Risk. CAMELS rating system uses a rating scale of 1-5, where '1' is Strong, '2' is Satisfactory, '3' is Fair, '4' is Weak and '5' is Critical.
**RBS stands for Risk-Based Supervision
4.8.1.2 Summary RAS ratings
Latest RAS*** Previous Previous
RAS Component Ratings RBS Ratings RBS Ratings
30/06/2013 31/01/2008 30/06/2007
------------------------ -------------- ------------- -------------
Overall Inherent Moderate Moderate High
Risk
------------------------ -------------- ------------- -------------
Overall Risk Management Acceptable Acceptable Weak
Systems
------------------------ -------------- ------------- -------------
Overall Composite Moderate Moderate High
Risk
------------------------ -------------- ------------- -------------
Direction of Overall Stable Stable Increasing
Composite Risk
------------------------ -------------- ------------- -------------
(MORE TO FOLLOW) Dow Jones Newswires
March 21, 2016 03:00 ET (07:00 GMT)
*** RAS stands for Risk Assessment System.
NMB BANK LIMITED
4. RISK MANAGEMENT (continued)
4.8.1.3 Summary risk matrix -30 June 2013 on - site examination
Level of Adequacy Overall Composite Direction
Type of Risk Inherent of Risk Management Risk of Overall
Risk Systems Composite
Risk
------------------- ---------- -------------------- ------------------ ------------
Credit High Weak High Increasing
------------------- ---------- -------------------- ------------------ ------------
Liquidity Moderate Acceptable Moderate Stable
------------------- ---------- -------------------- ------------------ ------------
Interest Rate Moderate Acceptable Moderate Stable
------------------- ---------- -------------------- ------------------ ------------
Foreign Exchange Low Acceptable Low Stable
------------------- ---------- -------------------- ------------------ ------------
Strategic Moderate Acceptable Moderate Stable
Risk
------------------- ---------- -------------------- ------------------ ------------
Operational Moderate Acceptable Moderate Stable
Risk
------------------- ---------- -------------------- ------------------ ------------
Legal & Compliance Moderate Strong Moderate Stable
------------------- ---------- -------------------- ------------------ ------------
Reputation Moderate Strong Moderate Stable
------------------- ---------- -------------------- ------------------ ------------
Overall Moderate Acceptable Moderate Stable
------------------- ---------- -------------------- ------------------ ------------
KEY
Level of Inherent Risk
Low - reflects a lower than average probability of an adverse impact on a banking institution's capital and earnings. Losses in a functional area with low inherent risk would have little negative impact on the banking institution's overall financial condition.
Moderate - could reasonably be expected to result in a loss which could be absorbed by a banking institution in the normal course of business.
High - reflects a higher than average probability of potential loss. High inherent risk could reasonably be expected to result in a significant and harmful loss to the banking institution.
Adequacy of Risk Management Systems
Weak - risk management systems are inadequate or inappropriate given the size, complexity and risk profile of the banking institution. Institution's risk management systems are lacking in important ways and therefore a cause of more than normal supervisory attention. The internal control systems will be lacking in important aspects particularly as indicated by continued control exceptions or by the failure to adhere to written policies and procedures.
Acceptable - management of risk is largely effective but lacking to some modest degree. While the institution might be having some minor risk management weaknesses, these have been recognized and are being addressed. Management information systems are generally adequate.
Strong - management effectively identifies and controls all types of risk posed by the relevant functional areas or per inherent risk. The board and senior management are active participants in managing risk and ensure appropriate policies and limits are put in place. The policies comprehensively define the bank's risk tolerance, responsibilities and accountabilities are effectively communicated.
NMB BANK LIMITED
4. RISK MANAGEMENT (continued)
Overall Composite Risk
Low - would be assigned to low inherent risk areas. Moderate risk areas may be assigned a low composite risk where internal controls and risk management systems are strong and effectively mitigate much of the risk.
Moderate - risk management systems appropriately mitigates inherent risk. For a given low risk area, significant weaknesses in the risk management systems may result in a moderate composite risk assessment. On the other hand, a strong risk management system may reduce the risk so that any potential financial loss from the activity would have only a moderate negative impact on the financial condition of the organization.
High - risk management systems do not significantly mitigate the high inherent risk. Thus, the activity could potentially result in a financial loss that would have a significant impact on the bank's overall condition.
Direction of Overall Composite Risk
Increasing - based on the current information, risk is expected to increase in the next 12 months.
Decreasing - based on current information, risk is expected to decrease in the next 12 months.
Stable - based on the current information, risk is expected to be stable in the next 12 months.
4.8.2 External Credit Ratings
The external credit ratings were given by Global Credit Rating (GCR), a credit rating agency accredited with the Reserve Bank of Zimbabwe.
Security class 2015 2014
Long term BB+ BB+
The current rating expires in August 2016.
4.9 Regulatory Compliance
There were no instances of regulatory non-compliance in the period under review. The Bank remains committed to complying with and adhering to all regulatory requirements.
NMB BANK LIMITED
5. CAPITAL MANAGEMENT
The primary objective of the Bank's capital management is to ensure that the Bank complies with the RBZ requirements. In implementing the current capital requirements, the RBZ requires the Banking subsidiary to maintain a prescribed ratio of total capital to total risk weighted assets.
Regulatory capital consists of Tier 1 capital, which comprises share capital, share premium, retained earnings (including current year profit), statutory reserve and other equity reserves.
The other component of regulatory capital is Tier 2 capital, which includes subordinated term debt, revaluation reserves and portfolio provisions.
Tier 3 capital relates to an allocation of capital to market and operational risk.
Various limits are applied to elements of the capital base. The core capital (Tier 1) shall comprise not less than 50% of the capital base and the regulatory reserves and portfolio provisions are limited to 1.25% of total risk weighted assets.
The Bank's regulatory capital position at 31 December was as follows:
31 December 2015 31 December
2014
------------------------------- ----------------------- ---------------
US$ US$
------------------------------- ----------------------- ---------------
Share capital 16 506 16 506
------------------------------- ----------------------- ---------------
Share premium 31 474 502 31 474 502
------------------------------- ----------------------- ---------------
Retained earnings 14 439 723 9 346 446
------------------------------- ----------------------- ---------------
Fair value gain on investment
properties (3 112 902) (2 964 628)
------------------------------- ----------------------- ---------------
--------------- --------------
------------------------------- ----------------------- ---------------
42 817 829 37 872 826
------------------------------- ----------------------- ---------------
Less: capital allocated
for market
------------------------------- ----------------------- ---------------
and operational risk (722 035) (467 320)
------------------------------- ----------------------- ---------------
Credit to insiders - (10 169)
------------------------------- ----------------------- ---------------
-------------- --------------
------------------------------- ----------------------- ---------------
Tier 1 capital 42 095 794 37 395 337
------------------------------- ----------------------- ---------------
Tier 2 capital (subject
to limit as per Banking
Regulations) 7 812 084 7 294 677
------------------------------- ----------------------- ---------------
Fair value gain on investment
properties 3 112 902 2 964 628
------------------------------- ----------------------- ---------------
Subordinated debt 1 414 144 1 407 964
------------------------------- ----------------------- ---------------
Regulatory reserve (limited
to 1.25% of risk weighted
assets) 2 277 191 2 758 890
------------------------------- ----------------------- ---------------
Portfolio provisions (limited
to 1.25% of risk weighted
assets) 1 007 847 163 195
------------------------------- ----------------------- ---------------
--------------- --------------
------------------------------- ----------------------- ---------------
(MORE TO FOLLOW) Dow Jones Newswires
March 21, 2016 03:00 ET (07:00 GMT)
Total Tier 1 & 2 capital 49 907 878 44 690 014
------------------------------- ----------------------- ---------------
Tier 3 capital (sum of
market and operational
risk capital) 722 035 467 320
------------------------------- ----------------------- ---------------
--------------- --------------
------------------------------- ----------------------- ---------------
Total capital base 50 629 913 45 157 334
------------------------------- ----------------------- ---------------
========= =========
------------------------------- ----------------------- ---------------
Total risk weighted assets 262 803 080 233 766 816
------------------------------- ----------------------- ---------------
========= =========
------------------------------- ----------------------- ---------------
Tier 1 ratio 16.02%% 16.00%%
------------------------------- ----------------------- ---------------
Tier 2 ratio 2.97% 3.12%
------------------------------- ----------------------- ---------------
Tier 3 ratio 0.27% 0.20%
------------------------------- ----------------------- ---------------
Total capital adequacy
ratio 19.26% 19.32%
------------------------------- ----------------------- ---------------
RBZ minimum required 12.00% 12.00%
------------------------------- ----------------------- ---------------
NMB BANK LIMITED
6. SEGMENT INFORMATION
For management purposes, the Bank is organised into five operating segments based on products and services as follows:
Retail Banking Individual customer's deposits
and consumer overdrafts, credit
card facilities and funds transfer
facilities.
Corporate Banking Loans and other credit facilities
and deposit and current accounts
for corporate and institutional
customers.
Treasury Money market investment, securities
trading, accepting and discounting
of instruments and foreign currency
trading.
International Banking Handles the Bank's foreign currency
denominated banking business
and manages relationships with
correspondent.
Corporate Finance Corporate restructuring, empowerment
transactions investment advisory
services, structured finance
and capital raising.
Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which in certain respects is measured differently from operating profit or loss in the financial statements. Income taxes are managed on a bank wide basis and are not allocated to operating segments.
Interest income is reported net as management primarily relies on net interest revenue as a performance measure, not the gross income and expense.
Transfer prices between operating segments are on arm's length basis in a manner similar to transactions with third parties.
No revenue from transactions with a single external customer or counterparty amounted to 10% or more of the Bank's total revenue in 2015 and 2014.
NMB BANK LIMITED
7. SEGMENT INFORMATION (cont'd)
The following table presents income and profit and certain asset and liability information regarding the bank's operating segments and service units:
Retail Corporate Treasury International Corporate Unallocated Total
Banking Banking Banking Banking Finance
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
For the year
ended US$ US$ US$ US$ US$ US$ US$
31
December 2015
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
Income
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
30 779 19 942 1 035 59 455
Third party 845 424 5 108 349 1 597 671 992 446 194 929
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
Impairment
losses
on loans,
advances and (2 551 (6 944 (9 496
debentures 763) 838) - - - - 601)
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
------------- -------------- ------------ ------------- ------------- -------------- -------------
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
Net operating 28 228 12 997 1 035 49 959
income 082 586 5 108 349 1 597 671 992 446 194 328
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
-------------- -------------- ------------ ------------- -------------- --------------- --------------
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
Results
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
Interest and
similar 13 722 18 168 35 761
income 707 196 3 254 024 - 436 786 179 642 355
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
Interest and
similar (5 246 (7 523 (15 118
expense 473) 572) (2 059 002) - (289 245) - 292)
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
-------------- -------------- ------------- ------------ ------------ -------------- -------------
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
Net interest 10 644 20 645
income 8 476 234 624 1 195 022 - 147 541 179 642 063
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
------------- -------------- --------------- ------------- ------------ -------------- ---------------
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
Fee and
commission 17 057 20 984
income 135 1 774 228 - 1 597 671 555 660 - 694
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
Depreciation
of
property and 1 690
equipment 1 211 150 138 300 55 011 61 312 34 234 190 895 902
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
Amortisation
of
intangible
(MORE TO FOLLOW) Dow Jones Newswires
March 21, 2016 03:00 ET (07:00 GMT)
assets - - - - - 509 687 509 687
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
Segment
profit/ 1 035 7 968
(loss) 5 904 945 (243 899) 1 189 657 (193 878) 276 368 194 387
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
Income tax (2 425 (2 425
charge - - - - - 049) 049)
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
Other
comprehensive
income, net
of
tax - - - - - 2 970 2 970
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
net of tax ------------- --------------- ------------- -------------- ------------ --------------- ------------
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
Profit/(loss) (1 386 5 546
for the year 5 904 945 (243 899) 1 189 657 (193 878) 276 368 885) 308
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
======== ========= ======== ======== ======== ======== =======
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
As at 31
December
2015
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
Assets and
liabilities
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
Capital 1 219 2 520
expenditure 1 251 784 45 811 1 178 2 200 - 310 283
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
126 097 120 542 17 757 334 401
Total assets 301 673 66 724 913 95 275 3 183 641 779 582
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
Total 76 966 83 704 117 254 6 798 284 724
liabilities 500 208 881 - - 533 122
--------------- --------------- ---------------- ---------------- --------------- --------------- ---------------- ----------------
NMB BANK LIMITED
7. SEGMENT INFORMATION (continued)
The following table presents income and profit and certain asset and liability information regarding the bank's operating segments and service units:
Retail Banking Corporate Treasury International Corporate Unallocated Total
Banking Banking Banking Finance
--------------- --------------- ---------------- -------------- --------------- --------------- ---------------- ---------------
31 December US$ US$ US$ US$ US$ US$ US$
2014
--------------- --------------- ---------------- -------------- --------------- --------------- ---------------- ---------------
Income
--------------- --------------- ---------------- -------------- --------------- --------------- ---------------- ---------------
Third party 21 813 485 19 173 640 3 940 624 1 755 909 986 037 406 503 48 076 198
--------------- --------------- ---------------- -------------- --------------- --------------- ---------------- ---------------
Impairment
losses
on loans,
--------------- --------------- ---------------- -------------- --------------- --------------- ---------------- ---------------
advances and
debentures (1 062 257) (3 955 105) - - - -- (5 017 362)
--------------- --------------- ---------------- -------------- --------------- --------------- ---------------- ---------------
------------- -------------- ------------ ------------- ------------- -------------- -------------
--------------- --------------- ---------------- -------------- --------------- --------------- ---------------- ---------------
Net operating
income 20 751 228 15 218 535 3 940 624 1 755 909 986 037 406 503 43 058 836
--------------- --------------- ---------------- -------------- --------------- --------------- ---------------- ---------------
-------------- -------------- ------------ ------------- -------------- --------------- --------------
--------------- --------------- ---------------- -------------- --------------- --------------- ---------------- ---------------
Results
--------------- --------------- ---------------- -------------- --------------- --------------- ---------------- ---------------
Interest and
similar
income 9 645 130 18 806 056 2 118 193 - 156 389 346 693 31 072 461
--------------- --------------- ---------------- -------------- --------------- --------------- ---------------- ---------------
Interest and
similar
expense (2 766 972) (8 818 002) (1 066 748) - - - (12 651 722)
--------------- --------------- ---------------- -------------- --------------- --------------- ---------------- ---------------
-------------- -------------- ------------- ------------ ------------ -------------- -------------
--------------- --------------- ---------------- -------------- --------------- --------------- ---------------- ---------------
Net interest
income 6 878 158 9 988 054 1 051 445 - 156 389 346 693 18 420 739
--------------- --------------- ---------------- -------------- --------------- --------------- ---------------- ---------------
-------------- --------------- ------------- ------------ -------------- --------------- -------------
--------------- --------------- ---------------- -------------- --------------- --------------- ---------------- ---------------
Fee and
commission
income 12 168 355 367 584 - 1 755 909 829 688 - 15 121 536
--------------- --------------- ---------------- -------------- --------------- --------------- ---------------- ---------------
Depreciation
of
property and
equipment 874 507 150 236 51 713 49 100 28 152 745 339 1 899 047
--------------- --------------- ---------------- -------------- --------------- --------------- ---------------- ---------------
Amortisation
of
intangible
assets - - - - - 337 118 337 118
--------------- --------------- ---------------- -------------- --------------- --------------- ---------------- ---------------
Segment
profit/(loss) 2 265 727 (2 944 200) 2 030 053 167 485 514 387 406 503 2 439 955
--------------- --------------- ---------------- -------------- --------------- --------------- ---------------- ---------------
Income tax
charge - - - - - (767 222) (767 222)
--------------- --------------- ---------------- -------------- --------------- --------------- ---------------- ---------------
Other
comprehensive
income,
--------------- --------------- ---------------- -------------- --------------- --------------- ---------------- ---------------
net of tax - - - - - 10 180 10 180
--------------- --------------- ---------------- -------------- --------------- --------------- ---------------- ---------------
(MORE TO FOLLOW) Dow Jones Newswires
March 21, 2016 03:00 ET (07:00 GMT)
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