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NMBZ Holdings Ld Half-year Report

03/09/2020 7:00am

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TIDMNMB

RNS Number : 8617X

NMBZ Holdings Ld

03 September 2020

NMBZ HOLDINGS

Holding company of

NMB BANK LIMITED (Registered Commercial Bank)

CONDENSED REVIEWED RESULTS

FOR THE SIX MONTHSED 30 JUNE 2020

FINANCIAL SUMMARY

 
                                        Inflation adjusted                         Historical Cost 
                                 30 June       30 June    31 December       30 June     30 June   31 December 
                            ------------  ------------  -------------  ------------  ----------  ------------ 
                                    2020          2019           2019          2020        2019          2019 
                            ------------  ------------  -------------  ------------  ----------  ------------ 
                                              Restated       Restated 
                            ------------  ------------  -------------  ------------  ----------  ------------ 
                                Reviewed      Reviewed        Audited 
                            ------------  ------------  -------------  ------------  ----------  ------------ 
                               1 248 545     1 291 433      1 914 723     1 461 158     104 329       464 285 
 Total income (ZWL)                  848           954            540           296         370           244 
                            ------------  ------------  -------------  ------------  ----------  ------------ 
 Operating profit 
  before impairment 
  charge and loss 
  on net monetary                883 605       865 002      1 149 090     1 252 502      73 508       341 453 
  position (ZWL)                     127           477            915           523         993           654 
                            ------------  ------------  -------------  ------------  ----------  ------------ 
 
 Total comprehensive             992 251       703 127        672 728     1 725 623      61 425       473 463 
  income (ZWL)                       893           345            135           822         194           396 
                            ------------  ------------  -------------  ------------  ----------  ------------ 
 Basic earnings 
  per share (ZWL 
  cents)                          170.53        174.77          55.15        270.66       14.55         71.56 
                            ------------  ------------  -------------  ------------  ----------  ------------ 
 Total deposits                3 493 310     4 021 200      3 120 529     3 493 310     480 292     1 191 079 
  (ZWL)                              688           461            011           688         497           845 
                            ------------  ------------  -------------  ------------  ----------  ------------ 
 
 Total gross loans             1 439 233     2 103 827      1 396 704     1 439 233     263 435       533 110 
  and advances (ZWL)                 342           197            117           342         295           289 
                            ------------  ------------  -------------  ------------  ----------  ------------ 
 
 Total shareholders' 
  funds and shareholders'      2 860 394     1 521 627      1 854 516     2 389 080     136 054       579 169 
  liabilities (ZWL)                  662           784            185           902         899           046 
                            ------------  ------------  -------------  ------------  ----------  ------------ 
 

Enquiries:

NMBZ HOLDINGS LIMITED

Benefit P Washaya, Chief Executive Officer, NMBZ Holdings Limited benefitw@nmbz.co.zw

Gerald Gore, Deputy Chief Executive Officer, NMBZ Holdings Limited geraldg@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-(242) 759 651/9

Facebook: NMB Bank Zimbabwe

Twitter: @NMBBankZim

Whatsapp:

+263775710000

CHAIRMAN'S STATEMENT

INTRODUCTION

The 2020 operating environment was largely characterised by the unprecedented global challenges emanating from the novel COVID-19 pandemic. Global and regional economies have experienced significant challenges due to the COVID-19 virus and the Zimbabwean economy was no exception. The Government of Zimbabwe pronounced a number of socio-economic restrictions, effectively plunging the nation into lockdown conditions in an attempt to manage the spread of the virus as well as mitigate its ravaging effects, which was followed by subsequent pronouncements and measures to gradually alter and vary the lockdown conditions. A raft of policy pronouncements have also been made and these have all significantly impacted on the Group's operating environment.

In spite of the difficult local operating environment and the unique global circumstances, the Group remained resilient and this culminated in the financial results which were underpinned by the Banking subsidiary's digitalisation drive and fair value gains on the bank's property portfolio. The Bank's digital strategy could not have come at a better time as it has been quite pivotal in driving business within the COVID-19 induced circumstances. The Bank has recorded significant growth and expansion on its digital platforms and this has resulted in enhanced service delivery. Furthermore, in response to the prevailing hyperinflationary environment, the Group has adopted a number of value preservation strategies in order to ensure that shareholders' value is not eroded.

The key inflation adjusted financial highlights of the Group as at 30 June 2020 are depicted below:

Shareholders' funds and shareholders' liabilities ZWL2.9 billion (December 2019 - ZWL1.9 billion)

Total assets ZWL6.9 billion (December 2019 - ZWL5.5 billion)

Total comprehensive income ZWL992.3 million (June 2019 - ZWL703.1 million)

Operating income before impairments and

monetary adjustments ZWL883.6 million (June 2019 - ZWL865.0 million)

HYPERINFLATIONARY REPORTING

On 11 October 2019, the Public Accountants and Auditors Board (PAAB) issued a pronouncement to the effect that the Zimbabwean economy had met all conditions necessary to be classified as a hyperinflationary economy. On that basis, the Directors have prepared the accompanying financial statements using the hyper-inflationary accounting basis to achieve fair presentation at the reporting date of 30 June 2020. The following results commentary is primarily on the Group's hyperinflationary adjusted financial statements at the reporting date.

GROUP RESULTS

Financial performance

The profit before taxation was ZWL844 746 155 (June 2019 - ZWL852 273 012) during the period under review and this gave rise to total comprehensive income of ZWL992 251 893 (June 2019 - ZWL703 127 345). The Group achieved a basic earnings per share of 170.53 cents (June 2019 - 174.77 cents) and this translated into the headline losses per share of 1.28 cents (June 2019 - earnings per share of 35.82 cents). The significant differential between the basic and headline losses per share is largely due to investment properties fair value adjustments and gains arising from the translation of foreign currency balances due to the depreciation of the Zimbabwe dollar against the USD and other major currencies.

Total income amounted to ZWL1 248 545 848 and this was down 3% from ZWL1 291 433 954 recorded during the six months ended 30 June 2019 mainly due to a reduction in net interest income due to sub-optimal market interest rates.

Operating expenses amounted to ZWL327 844 569 and these were down 4% from ZWL341 124 089 recorded during the six months ended 30 June 2019. The reduced costs were a result of cost containment measures adopted by the Group in addition to improved efficiencies arising out of the Group's digital drive.

The Group recorded an impairment credit loss on financial assets measured at amortised cost amounting to ZWL25 219 962 compared to an expected credit loss reversal of ZWL7 896 544 during the six months ended 30 June 2019 due to growth in the banking subsidiary's financial assets.

The Bank has continued with its drive to reduce non-performing loans (NPLs) and this saw the NPL ratio reduce from 1.37% as at 31 December 2019 to 0.81% as at 30 June 2020. The drop in the NPL ratio is largely due to aggressive collections and stricter credit underwriting standards.

Financial position

The Group's total assets increased by 27% from ZWL5 473 819 939 as at 31 December 2019 to ZWL6 936 485 718 as at 30 June 2020 mainly due to a 47% increase in property and equipment, a 126% increase in investment properties and a 6% increase in cash and cash equivalents.

Investment properties increased from ZWL602 234 779 as at 31 December 2019 to ZWL1 363 353 363 as at 30 June 2020 whilst property and equipment increased from ZWL1 032 743 479 at 31 December 2019 to ZWL1 514 418 395 as at 30 June 2020 mainly due to the significant increase in property values in ZWL terms in line with market changes.

Gross loans and advances increased by 3% from ZWL1 396 704 117 as at 31 December 2019 to ZWL1 439 233 342 as at 30 June 2020 mainly due to a slowdown in advances during the period under review in view of the prevailing economic conditions.

Cash and cash equivalents increased from ZWL1 289 795 771 as at 31 December 2019 to ZWL1 369 056 048 at 30 June 2020 mainly due to the upward foreign exchange revaluation of the Group's foreign denominated liquid assets.

Total deposits increased by 12% from ZWL3 120 529 011 at 31 December 2019 to ZWL3 493 310 688 as at 30 June 2020 as a result of deposit mobilization strategies and the translation of foreign denominated deposits to the local currency.

The Bank maintained a sound liquidity position with a liquidity ratio of 73.90% which was significantly above the statutory minimum of 30%.

Capital

The banking subsidiary maintained adequate capital levels to cover all risks as reflected by a capital adequacy ratio of 39.39% as at 30 June 2020 (31 December 2019 - 39.49%). The ratio was well above the regulatory minimum of 12%.

The Group's shareholders' funds and shareholders' liabilities increased by 54% from ZWL1 854 516 185 as at 31 December 2019 to ZWL2 860 394 662 as at 30 June 2020 as a result of the current period's total comprehensive income.

The Bank's regulatory capital as at 30 June 2020 was ZWL1 466 396 127 and was above the minimum regulatory capital of ZWL25 million. The Bank submitted its capitalisation plan to the RBZ in terms of the requirements for a Tier 1 bank to have a minimum Zimbabwe dollar equivalent of USD30 million by 31 December 2021. We await approval of our capitalisation plan by the RBZ.

DIVID

The Board has resolved not to declare an interim dividend as the Group is firmly focused on achieving the revised minimum regulatory capital requirement of the ZWL equivalent of USD30 million for a Tier 1 Bank by 31 December 2021.

DIRECTORATE

There were no changes to the Directorate during the period under review. The directors of both NMBZ Holdings Limited and NMB Bank Limited boards remain as follows: Mr Benedict A. Chikwanha (Board Chairman), Mr Benefit P. Washaya (Chief Executive Officer), Mr Benson Ndachena (Chief Finance Officer), Mr Charles Chikaura (Independent Non-Executive Director and Deputy Chairman), Mr James de la Fargue (Non-Executive Director), Ms Jean Maguranyanga (Independent Non-Executive Director), Mr Julius Tichelaar (Non Executive Director), Ms Sabinah Chitehwe (Independent Non-Executive Director), Ms Christine Glover (Non-Executive Director) and Mr Givemore Taputaira (Independent Non-Executive Director).

FUNCTIONAL CURRENCY

As announced in the Group's financial statements for the year ended 31 December 2019, we continue to closely monitor the developments in the economic and monetary landscape. On 22 February 2019, the Reserve Bank of Zimbabwe (RBZ) issued an Exchange Control Directive, RU 28 of 2019 which established an Interbank foreign exchange market to formalize the buying and selling of foreign currency through the Banks and Bureaux de change. To operationalize this, the RBZ denominated the existing RTGS balances as RTGS dollars and initial trades between the RTGS dollar and the US$ were pegged at USD/RTGS$1:2.5. On the same date, Statutory Instrument 33 (SI 33) of 2019 was also issued and it specified that all assets and liabilities that were in USD immediately before 22 February 2019 were deemed to have been valued in RTGS$ at a rate of USD/RTGS$1:1.

On 24 June 2019, through Statutory Instrument 142 (SI 142) of 2019, the Government of Zimbabwe discontinued the multicurrency regime which had been in place since February 2009 and also introduced the Zimbabwe Dollar (ZWL), which was designated as the country's sole legal tender to be used for all local transactions and other purposes.

On 26 March 2020, the Reserve Bank of Zimbabwe in a press statement announced various interventions in response to the financial vulnerabilities caused by the COVID-19 pandemic. One of the measures announced therein was the authorization of the use of free-funds in paying for goods and services, in terms of Statutory Instrument (SI) 85 of 2020. On 24 July 2020, the Government of Zimbabwe issued Statutory Instrument (SI) 185 of 2020, which granted permission to display, quote or offer prices for all goods and services in both Zimbabwe dollars and foreign currency at the interbank exchange rate.

On 23 June 2020, the Reserve Bank of Zimbabwe introduced the Foreign Exchange Auction System, effectively abandoning the fixed foreign currency exchange rate regime which had been prevailing for the greater part of 2020. Significant trades have been recorded on the platform and significant movements in the exchange rate have been resultantly recorded.

The Directors, having assessed all these developments, concluded that the Group's functional currency remains the Zimbabwe dollar having changed from USD to RTGS dollars on 22 February 2019, which subsequently changed to Zimbabwe Dollars (ZWL) following the issuance of SI 142 of 2019 on 24 June 2019.

LEGACY DEBTS

The banking subsidiary owed USD13 840 412 to various lines of credit providers as at 30 June 2020. The Bank registered these foreign debts with the Reserve Bank of Zimbabwe (RBZ) as required by the regulatory directives. During the previous financial period, the Bank transferred to the RBZ the ZWL equivalent of the foreign debts at a rate of USD/ZWL1:1. The RBZ has indicated that they will be issuing a USD denominated instrument for these debts and consequently these debts and the RBZ deposits have been accounted for at the closing exchange rate of USD/ZWL 1:63.74 at 30 June 2020. This effectively values the original credit lines at a rate of 1:1 on a netted off basis. The RBZ approved the line of credit balances amounting to USD13 840 412.

CORPORATE SOCIAL INVESTMENTS

During the period under review, the Group channelled its Corporate Social Investments towards education, environment conservation as well as the support of disadvantaged and vulnerable groups. Donations towards education were to the Ministry of Education Mashonaland West Provincial Wellness Launch and Matabeleland North Athletics team NASH/NAPH. Donations were also made to KidzCan for treatment of children living with cancer and commemoration of the World Kidney Day.

The Group in conjunction with other banks also channelled its Corporate Social Investments towards the fight against COVID-19 under the Bankers Association of Zimbabwe. Leveraging the ecosystem of customers, business partners and the public at large, the Bank also set up a COVID-19 donations platform through which institutions and individuals are making donations towards fighting this global pandemic.

CORPORATE DEVELOPMENTS

In the advent of the 'new normal', where physical interactions have to be kept at a minimum in line with the World Health Organisation (WHO) guidelines on fighting the novel COVID-19 pandemic, the Bank's strategy is anchored on the enhancement of its digital touch points to ensure uninterrupted service delivery to the Bank's valued clients via digital platforms.

The Bank continues with its financial inclusion drive and has intensified the opening of a number of low cost accounts via our NMBLite product.

The construction of our new Head Office along Borrowdale Road has been completed and the envisaged migration was hampered by the unforeseeable COVID-19 induced challenges.

COVID-19 UPDATE

The Group has been closely monitoring the developments around the COVID-19 crisis. To this end, we have fully embraced and implemented the WHO guidelines to ensure the safety of our valued clients, staff and stakeholders. Amongst several initiatives, we have enabled remote working for staff, accelerated the Bank's digital transformation drive and we continue to encourage our customers to fully utilize the Bank's enhanced digital banking platforms thereby minimizing the need for them to physically visit the Bank's banking halls and offices. These measures have significantly contributed towards the maintenance of social distancing by decongesting the Bank's branches and workspaces. Where customers and staff have had to visit the branches and offices, we have strictly adhered to the prescribed WHO regulations which include temperature checking, sanitization and the correct wearing of masks at all times.

OUTLOOK AND STRATEGY

The operating environment continues to be challenging and the introduction of the RBZ's Foreign Exchange (FX) Auction system on 23 June 2020 should hopefully result in price discovery and stabilisation of the FX market.

We continue to be optimistic that the measures being taken by the Government and the Central Bank to stimulate the economy will have the desired effects in the short to medium term and consequently improve the country's economic climate. The containment of the COVID-19 pandemic continues to be a prerequisite for an economic rebound and the measures taken so far by the Government should lead to a slowdown in the spread of the Corona virus which should result in an increase in the level of economic activities in the country.

As aforementioned, the banking subsidiary has continued to enhance its digital offerings and some digital platforms will be launched shortly which will provide customers with simplicity and convenience in transacting and digitally meet a greater part of their information requirements.

APPRECIATION

I remain sincerely grateful to our valued clients, shareholders and regulatory authorities who continue to support the Group in the face of the numerous challenges posed by the tough operating environment. To my fellow board members, management and staff, I extend my heartfelt gratitude for their continued diligence, dedication and relentless efforts which have culminated in the achievement of these commendable results.

May I take this opportunity to implore all our valued stakeholders to remain vigilant and resolute as we all put up a fight against the horrendous COVID-19 pandemic.

B. A. CHIKWANHA

CHAIRMAN

25 August 2020

REVIEWER'S STATEMENT

These condensed inflation adjusted interim financial statements have been reviewed by Ernst & Young Chartered Accountants (Zimbabwe) and an adverse review conclusion issued thereon due to continuing issues from prior years with regards to non-compliance with International Accounting Standard 21, "The Effects of Changes in Foreign Exchange Rates" and International Accounting Standard 8, "Accounting Polices, Changes in Accounting Estimates and Errors" and their effect on base numbers used for reporting under International Accounting Standard 29, "Financial Reporting in Hyperinflationary Economies". The reviewer's report is available for inspection at the Holding Company's registered office. The engagement partner for this review is Mr Walter Mupanguri (PAAB Practicing Number 0367).

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the six months ended 30 June 2020

 
                                           Inflation adjusted                           Historical Cost* 
                                            30 June               30 June                30 June              30 June 
                      ------  ---------------------  --------------------  ---------------------  ------------------- 
                        Note                   2020                  2019                   2020                 2019 
                              ---------------------  --------------------  ---------------------  ------------------- 
                                                ZWL                   ZWL                    ZWL                  ZWL 
                      ------  ---------------------  --------------------  ---------------------  ------------------- 
                                                                 Restated 
                      ------  ---------------------  --------------------  ---------------------  ------------------- 
                                           Reviewed              Reviewed 
                      ------  ---------------------  --------------------  ---------------------  ------------------- 
 Interest income       4                205 869 041           284 733 413            127 969 603           23 200 282 
                      ------  ---------------------  --------------------  ---------------------  ------------------- 
                                       (37 096 152)          (85 307 388)           (22 245 160)          (6 890 386) 
 Interest expense                  ----------------      ----------------       ----------------     ---------------- 
                      ------  ---------------------  --------------------  ---------------------  ------------------- 
 Net interest income                    168 772 889           199 426 025            105 724 443           16 309 896 
                      ------  ---------------------  --------------------  ---------------------  ------------------- 
 Fee and commission 
  income               5.1              241 177 285           221 924 797            154 253 951           18 569 148 
                      ------  ---------------------  --------------------  ---------------------  ------------------- 
 Net foreign 
  exchange gains                        133 139 769           355 453 683            114 112 987           32 664 282 
                      ------  ---------------------  --------------------  ---------------------  ------------------- 
                                  -----------------     -----------------       ----------------   ---------------- 
                      ------  ---------------------  --------------------  ---------------------  ------------------- 
 Revenue                                543 089 943           776 804 505            374 091 381           67 543 326 
                      ------  ---------------------  --------------------  ---------------------  ------------------- 
                                                                  429 322              1 064 821 
                                        668 359 753                   061                    755           29 895 658 
 Other income          5.2       ------------------     -----------------       ----------------     ---------------- 
                      ------  ---------------------  --------------------  ---------------------  ------------------- 
                                          1 211 449             1 206 126              1 438 913 
 Operating income                               696                   566                    136           97 438 984 
                      ------  ---------------------  --------------------  ---------------------  ------------------- 
                                           (327 844              (341 124               (186 410              (23 929 
 Operating                                     569)                  089)                   613)                 991) 
  expenditure          6        -------------------     -----------------       ----------------    ----------------- 
                      ------  ---------------------  --------------------  ---------------------  ------------------- 
 Operating income 
  before 
  impairment charge 
  and loss 
  on net monetary                                                                      1 252 502 
  position                              883 605 127           865 002 477                    523           73 508 993 
                      ------  ---------------------  --------------------  ---------------------  ------------------- 
 Impairment losses 
  on financial 
  assets measured at 
  amortised 
  cost                                 (25 219 962)             7 896 544           (25 219 962)              943 144 
                      ------  ---------------------  --------------------  ---------------------  ------------------- 
 Loss on net 
  monetary position                    (13 639 010)          (20 626 009)                      -                    - 
                      ------  ---------------------  --------------------  ---------------------  ------------------- 
                                                                                ---------------- 
   Profit before                   ----------------      ----------------              1 227 282      --------------- 
   taxation                             844 746 155           852 273 012                    561           74 452 137 
                      ------  ---------------------  --------------------  ---------------------  ------------------- 
                                           (155 504              (162 249               (133 332              (17 013 
                                               400)                  579)                   999)                 168) 
 Taxation charge       7         ------------------      ----------------    -------------------     ---------------- 
                      ------  ---------------------  --------------------  ---------------------  ------------------- 
 Profit for the                                                                        1 093 949 
  period                                689 241 755           690 023 433                    562           57 438 969 
                      ------  ---------------------  --------------------  ---------------------  ------------------- 
 Other comprehensive 
 income 
                      ------  ---------------------  --------------------  ---------------------  ------------------- 
      Items that will not be reclassified to 
       profit or loss 
                                                     --------------------  ---------------------  ------------------- 
 Revaluation gain on 
  land 
  and buildings, net                        303 010 
  of tax                 5.3                    138            13 103 912            631 674 260            3 986 225 
                      ------  ---------------------  --------------------  ---------------------  ------------------- 
                                   ----------------       ---------------     ------------------      --------------- 
                      ------  ---------------------  --------------------  ---------------------  ------------------- 
 Total comprehensive income                 992 251           703 127 345              1 725 623           61 425 194 
 for                                            893             =========                    822            ========= 
 the period                              ==========                                  =========== 
                              ---------------------  --------------------  ---------------------  ------------------- 
 
 Earnings/(losses) per share 
  (ZWL cents) 
                              ---------------------  --------------------  ---------------------  ------------------- 
 - Basic               9.3                   170.53                174.77                 270.66                14.55 
                      ------  ---------------------  --------------------  ---------------------  ------------------- 
 - Diluted             9.3                   160.69                161.18                 255.53                13.42 
                      ------  ---------------------  --------------------  ---------------------  ------------------- 
 - Headline            9.3                   (1.28)                 35.82                   1.11                 3.21 
                      ------  ---------------------  --------------------  ---------------------  ------------------- 
 
 

*The Historical Cost information has been shown as supplementary information for the benefit of users. These are not required in terms of International Accounting Standard (IAS) 29 "Financial Reporting in Hyperinflationary Economies". The Reviewer has not expressed an opinion on the Historical Cost information.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2020

 
                                            Inflation adjusted                          Historical Cost* 
                                             30 June               31 Dec               30 June               31 Dec 
                       -------  --------------------  -------------------  --------------------  ------------------- 
                        Note                    2020                 2019                  2020                 2019 
                       -------  --------------------  -------------------  --------------------  ------------------- 
                                                 ZWL                  ZWL                   ZWL                  ZWL 
                       -------  --------------------  -------------------  --------------------  ------------------- 
                                                                 Restated 
                       -------  --------------------  -------------------  --------------------  ------------------- 
 SHAREHOLDERS' FUNDS                        Reviewed              Audited 
                       -------  --------------------  -------------------  --------------------  ------------------- 
 Share capital          10.2.1             2 087 754            2 087 754                84 116               84 116 
                       -------  --------------------  -------------------  --------------------  ------------------- 
                                             440 278              441 838 
 Capital reserves                                222                  966            19 121 607           19 184 170 
                       -------  --------------------  -------------------  --------------------  ------------------- 
 Functional currency 
  translation                                167 928              167 928 
  reserve                                        479                  479            11 619 648           11 619 648 
                       -------  --------------------  -------------------  --------------------  ------------------- 
                                             587 498              284 488               807 754              176 079 
 Revaluation reserves                            371                  233                   210                  950 
                       -------  --------------------  -------------------  --------------------  ------------------- 
                                           1 535 555              846 313             1 423 455              329 505 
                                                 646                  891                   131                  569 
 Retained earnings                 -----------------     ----------------      ----------------     ---------------- 
                       -------  --------------------  -------------------  --------------------  ------------------- 
                                           2 733 348            1 742 657             2 262 034              536 473 
 Total equity                                    472                  323                   712                  453 
                       -------  --------------------  -------------------  --------------------  ------------------- 
 
 Redeemable ordinary 
  shares                11                14 335 253           37 557 157            14 335 253           14 335 253 
                       -------  --------------------  -------------------  --------------------  ------------------- 
 Subordinated term                           112 710                                    112 710 
  loan                  12                       937           74 301 705                   937           28 360 340 
                       -------  --------------------  -------------------  --------------------  ------------------- 
                                   -----------------     ----------------     -----------------     ---------------- 
                       -------  --------------------  -------------------  --------------------  ------------------- 
 Total shareholders' 
  funds                                    2 860 394            1 854 516             2 389 080              579 169 
  and shareholders'                              662                  185                   902                  046 
  liabilities                      -----------------     ----------------     -----------------      --------------- 
                       -------  --------------------  -------------------  --------------------  ------------------- 
 
 LIABILITIES 
                       -------  --------------------  -------------------  --------------------  ------------------- 
 Deposits and other                        3 649 929            3 322 435             3 649 929            1 268 146 
  liabilities           13.1                     722                  897                   722                  016 
                       -------  --------------------  -------------------  --------------------  ------------------- 
 Deferred tax                                411 392                                    414 985 
  liabilities                                    690            1 637 282                   705           97 653 191 
                       -------  --------------------  -------------------  --------------------  ------------------- 
                                                                  295 230 
 Current tax                              14 768 644                  575            14 768 644              624 937 
  liabilities                      -----------------    -----------------     -----------------    ----------------- 
                       -------  --------------------  -------------------  --------------------  ------------------- 
 Total shareholders' funds and             6 936 485            5 473 819             6 468 764            1 945 593 
  liabilities                                    718                  939                   973                  190 
                                          ==========           ==========            ==========           ========== 
                                --------------------  -------------------  --------------------  ------------------- 
 
 ASSETS 
                       -------  --------------------  -------------------  --------------------  ------------------- 
 Cash and cash                             1 369 056            1 289 795             1 369 056              492 304 
  equivalents           15                       048                  771                   048                  267 
                       -------  --------------------  -------------------  --------------------  ------------------- 
 Investment                                  129 932              280 766               129 932              107 166 
  securities            14.1                     320                  312                   320                  155 
                       -------  --------------------  -------------------  --------------------  ------------------- 
 Loans, advances and 
  other                                    2 526 003            2 233 628             2 436 533              817 960 
  assets                16                       092                  818                   439                  242 
                       -------  --------------------  -------------------  --------------------  ------------------- 
 Trade and other 
  investments                              7 325 771            4 223 647             7 325 771            1 612 131 
                       -------  --------------------  -------------------  --------------------  ------------------- 
 Investment                                1 363 353              602 234             1 363 353              229 867 
  properties                                     363                  779                   363                  982 
                       -------  --------------------  -------------------  --------------------  ------------------- 
 Intangible assets      18                26 396 729           30 427 133             2 639 087            1 397 186 
                       -------  --------------------  -------------------  --------------------  ------------------- 
 Property and                              1 514 418            1 032 743             1 159 924              295 285 
  equipment             19                       395                  479                   945                  227 
                       -------  --------------------  -------------------  --------------------  ------------------- 
                                   -----------------    -----------------     -----------------    ----------------- 
   Total assets                            6 936 485            5 473 819             6 468 764            1 945 593 
                                                 718                  939                   973                  190 
                                          ==========           ==========            ==========           ========== 
                       -------  --------------------  -------------------  --------------------  ------------------- 
 

*The Historical Cost information has been shown as supplementary information for the benefit of users. These are not required in terms of International Accounting Standard (IAS) 29 "Financial Reporting in Hyperinflationary Economies". The Reviewer has not expressed an opinion on the Historical Cost information.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the six months ended 30 June 2020

 
                                                                            Inflation adjusted 
                                                              Functional 
                                                                Currency 
                                                             Translation       Share Option        Revaluation             Retained 
                     Share Capital      Share Premium            Reserve            Reserve            Reserve             Earnings                 Total 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  -------------------- 
                               ZWL                ZWL                ZWL                ZWL                ZWL                  ZWL                   ZWL 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  -------------------- 
 Balances at 1                                409 288                                                                                             671 740 
  January 2019           2 015 305                762                  -          1 560 744                  -          258 875 925                   736 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  -------------------- 
 Total 
  comprehensive 
  income for                                                                                                                                      703 127 
  the period                     -                  -                  -                  -         13 103 912          690 023 433                   345 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  -------------------- 
 Share issue - 
  scrip 
  dividend                  72 449         30 989 460                  -                  -                  -                    -            31 061 909 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  -------------------- 
 Change in 
  functional 
  currency 
  translation                                                    167 928                                                                          167 928 
  reserve                        -                  -                479                  -                  -                    -                   479 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  -------------------- 
                                                                                                                                                  (52 230 
                                 -                  -                  -                  -                  -         (52 230 685)                  685) 
 Dividends paid   ----------------   ----------------   ----------------   ----------------   ----------------    -----------------      ---------------- 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  -------------------- 
 Balances at 30 
  June 2019 -                                 440 278            167 928                                                                        1 521 627 
  Restated               2 087 754                222                479          1 560 744         13 103 912          896 668 673                   784 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  -------------------- 
 Total 
  comprehensive 
  income for                                                                                           271 384                                    221 029 
  the period                     -                  -                  -                  -                321         (50 354 782)                   539 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  -------------------- 
 
   Balance as 
   at 31 
   December                          ----------------   ----------------                      ----------------                        ------------------- 
   2019           ----------------            440 278            167 928   ----------------            284 488    -----------------             1 742 657 
   - Restated            2 087 754                222                479          1 560 744                233          846 313 891                   323 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  -------------------- 
 Unwinding of 
  share option 
  reserve                        -                  -                  -        (1 560 744)                  -                    -           (1 560 744) 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  -------------------- 
 Total 
  comprehensive 
  income for                                                                                           303 010                                    992 251 
  the period                     -                  -                  -                  -                138          689 241 755                   893 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  -------------------- 
                   ---------------   ----------------   ----------------    ---------------    ---------------    -----------------    ------------------ 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  -------------------- 
 Balances at 30          2 087 754            440 278            167 928                  -            587 498         1 535 555646             2 733 348 
  June 2020              =========                222                479          =========                371           ==========                   472 
                                           ==========         ==========                             =========                                =========== 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  -------------------- 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the six months ended 30 June 2020

 
                                                                             Historical Cost* 
                                                              Functional 
                                                                Currency 
                                                             Translation       Share Option        Revaluation             Retained 
                     Share Capital      Share Premium            Reserve            Reserve            Reserve             Earnings                Total 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  ------------------- 
                               ZWL                ZWL                ZWL                ZWL                ZWL                  ZWL                  ZWL 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  ------------------- 
 Balances at 1 
  January 2019              80 975         16 463 734                  -             62 563            136 741           47 377 400           64 121 413 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  ------------------- 
 Total 
  comprehensive 
  income for 
  the period                     -                  -                  -                  -          3 986 225           57 438 969           61 425 194 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  ------------------- 
 Share issue - 
  scrip 
  dividend                   3 141          2 657 873                  -                  -                  -                    -            2 661 014 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  ------------------- 
 Change in 
  functional 
  currency 
  translation 
  reserve                        -                  -         11 619 648                  -                  -                    -           11 619 648 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  ------------------- 
                                 -                  -                  -                  -                  -          (3 772 370)          (3 772 370) 
 Dividends paid   ----------------   ----------------   ----------------   ----------------   ----------------    -----------------     ---------------- 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  ------------------- 
 Balances at 30 
  June 2019                 84 116         19 121 607         11 619 648             62 563          4 122 966          101 043 999          136 054 899 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  ------------------- 
 
 Total 
  comprehensive 
  income for                                                                                           171 956 
  the period                     -                  -                  -                  -                984          228 461 570          400 418 554 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  ------------------- 
 
   Balance as                                                                                 ---------------- 
   at December    ----------------   ----------------   ----------------   ----------------            176 079     ----------------     ---------------- 
   2019                     84 116         19 121 607         11 619 648             62 563                950          329 505 569          536 473 453 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  ------------------- 
 Unwinding of 
  share option 
  reserve                        -                  -                  -           (62 563)                  -                    -             (62 563) 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  ------------------- 
 Total 
  comprehensive 
  income for                                                                                           631 674            1 093 949            1 725 623 
  the period                     -                  -                  -                  -                260                  562                  822 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  ------------------- 
                   ---------------    ---------------    ---------------    ---------------    ---------------    -----------------   ------------------ 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  ------------------- 
 Balances at 30             84 116         19 121 607         11 619 648                  -            807 754         1 423 455131            2 262 034 
  June 2020              =========         ==========         ==========          =========                210           ==========                  712 
                                                                                                     =========                               =========== 
                 -----------------  -----------------  -----------------  -----------------  -----------------  -------------------  ------------------- 
 

*The Historical Cost information has been shown as supplementary information for the benefit of users. These are not required in terms of International Accounting Standard (IAS) 29 "Financial Reporting in Hyperinflationary Economies". The Reviewer has not expressed an opinion on the Historical Cost information.

CONSOLIDATED STATEMENT OF CASH FLOWS

for the six months ended 30 June 2020

 
                                                                        Inflation adjusted                            Historical Cost * 
                                                                          30 June               30 June               30 June               30 June 
                                                           ----------------------  --------------------  --------------------  -------------------- 
                                                                             2020                  2019                  2020                  2019 
                                                           ----------------------  --------------------  --------------------  -------------------- 
                                                                              ZWL                   ZWL                   ZWL                   ZWL 
                                                           ----------------------  --------------------  --------------------  -------------------- 
                                                                                               Restated 
                                                                                   --------------------  --------------------  -------------------- 
                                                                         Reviewed              Reviewed 
                                                                                   --------------------  --------------------  -------------------- 
 CASH FLOWS FROM OPERATING ACTIVITIES 
                                                                                   --------------------  --------------------  -------------------- 
                                                                          844 746               852 273             1 227 282                74 452 
 Profit before taxation                                                       155                   012                   561                   137 
                                                           ----------------------  --------------------  --------------------  -------------------- 
 Non-cash items: 
                                                           ----------------------  --------------------  --------------------  -------------------- 
 - Depreciation(excluding right 
  of use assets)                                                       19 299 688            34 764 116             4 340 825               988 561 
                                                           ----------------------  --------------------  --------------------  -------------------- 
 - Depreciation - Right of use 
  assets                                                                1 985 839             5 967 714             1 501 219               537 067 
                                                           ----------------------  --------------------  --------------------  -------------------- 
 - Amortisation of intangible 
  assets                                                                7 238 239            22 309 322               328 236               373 555 
                                                           ----------------------  --------------------  --------------------  -------------------- 
 
   *    Impairment losses on financial assets measured at 
        amortised costs                                                25 219 962           (7 896 544)            25 219 962             (943 144) 
                                                           ----------------------  --------------------  --------------------  -------------------- 
                                                                         (640 103              (380 064            (1 053 907               (27 991 
   *    Investment properties fair value gains                               624)                  124)                  444)                  540) 
                                                           ----------------------  --------------------  --------------------  -------------------- 
 
   *    Trade and other investments fair value adjustment             (3 102 124)           (4 762 662)           (5 713 640)             (506 254) 
                                                           ----------------------  --------------------  --------------------  -------------------- 
 - Interest capitalised on subordinated 
  term loan                                                             5 459 411             2 309 884             2 888 228               275 887 
                                                           ----------------------  --------------------  --------------------  -------------------- 
                                                                         (113 156              (247 818              (113 156               (29 598 
 - Unrealised foreign exchange                                               723)                  512)                  723)                  834) 
  gains                                                        ------------------     -----------------      ----------------      ---------------- 
                                                           ----------------------  --------------------  --------------------  -------------------- 
 
 Operating cash flows before changes                                      147 586               277 082                                      17 587 
  in operating assets and liabilities                                         823                   206            88 783 224                   435 
                                                           ----------------------  --------------------  --------------------  -------------------- 
 Changes in operating assets and 
  liabilities 
                                                           ----------------------  --------------------  --------------------  -------------------- 
 Increase/(Decrease) in deposits                                       (1 492 755              (324 288               561 534               (26 719 
  and other liabilities                                                      091)                  863)                   790                  258) 
                                                           ----------------------  --------------------  --------------------  -------------------- 
 
                                                                        1 527 246              (403 980              (410 549                (9 734 
 (Increase)/Decrease in loans,                                                950                  927)                  859)                  285) 
  advances and other assets                                   -------------------     -----------------     -----------------     ----------------- 
                                                           ----------------------  --------------------  --------------------  -------------------- 
                                                                          182 078              (451 187               239 768               (18 866 
 Net cash generated/(used) from                                               682                  584)                   155                  108) 
  operations                                                   ------------------     -----------------    ------------------     ----------------- 
                                                           ----------------------  --------------------  --------------------  -------------------- 
 TAXATION 
                                                                                   --------------------  --------------------  -------------------- 
 Tax on dividends paid                                                          -           (2 074 228)                     -             (247 740) 
                                                           ----------------------  --------------------  --------------------  -------------------- 
                                                                          (12 483               (10 211                                      (1 219 
 Corporate tax paid                                                          633)                  836)           (9 197 573)                  677) 
                                                           ----------------------  --------------------  --------------------  -------------------- 
                                                              -------------------     -----------------     -----------------      ---------------- 
                                                                          169 595              (463 473               230 570               (20 333 
   Net cash inflow/(outflow) from                                             049                  648)                   582                  525) 
   operations                                                 -------------------     -----------------     -----------------      ---------------- 
                                                           ----------------------  --------------------  --------------------  -------------------- 
 CASH FLOWS FROM INVESTING ACTIVITIES 
                                                                                   --------------------  --------------------  -------------------- 
 Acquisition of intangible assets                                     (3 207 838)             (789 701)           (1 570 139)              (94 320) 
                                                           ----------------------  --------------------  --------------------  -------------------- 
 (Acquisition)/Disposal of investment                                     150 833                                     (22 766 
  securities                                                                  992            75 578 716                  165)             9 026 936 
                                                           ----------------------  --------------------  --------------------  -------------------- 
                                                                          (85 399               (82 103               (19 605                (9 806 
 Acquisition of property and equipment                                       196)                  509)                  609)                  241) 
                                                           ----------------------  --------------------  --------------------  -------------------- 
 Proceeds on disposal of investment 
  properties                                                              262 500                     -               262 500                     - 
                                                           ----------------------  --------------------  --------------------  -------------------- 
                                                                         (121 277                                     (79 840 
 Acquisition of investment properties                                        460)           (2 832 244)                  437)             (338 276) 
                                                           ----------------------  --------------------  --------------------  -------------------- 
                                                                 ----------------      ----------------     -----------------      ---------------- 
                                                           ----------------------  --------------------  --------------------  -------------------- 
                                                                          (58 788               (10 146              (123 519               (21 545 
 Net cash (used)/generated in                                                002)                  738)                  850)                  426) 
  investing activities                                          -----------------      ----------------      ----------------      ---------------- 
                                                           ----------------------  --------------------  --------------------  -------------------- 
 
 
 CASH FLOWS FROM FINANCING 
 ACTIVITIES 
                                      ------------------  -------------------  -------------------  ------------------ 
 Payment of interest on subordinated 
  term loan                                            -          (1 507 481)                    -           (180 050) 
                                      ------------------  -------------------  -------------------  ------------------ 
 Repayment of lease liabilities              (8 839 289)          (2 938 988)          (5 082 972)           (559 029) 
                                      ------------------  -------------------  -------------------  ------------------ 
                                                                      (11 528 
 Cash dividend paid                                    -                 654)                    -           (832 659) 
                                      ------------------  -------------------  -------------------  ------------------ 
                                                       -            (428 632)                    -            (30 958) 
 Share issue costs - scrip dividend     ----------------     ----------------       --------------    ---------------- 
                                      ------------------  -------------------  -------------------  ------------------ 
                                                                      (16 403 
 Net cash outflow from financing             (8 839 289)                 755)          (5 082 972)         (1 602 696) 
  activities                            ----------------     ----------------     ----------------    ---------------- 
                                      ------------------  -------------------  -------------------  ------------------ 
 Net increase in cash and cash                   101 967             (490 024              101 967             (23 148 
  equivalents                                        759                 142)                  759                122) 
                                      ------------------  -------------------  -------------------  ------------------ 
 Net foreign exchange and monetary 
  adjustments on cash and cash                   774 784              838 399              774 784             100 136 
  equivalents                                        022                  746                  022                 405 
                                      ------------------  -------------------  -------------------  ------------------ 
                                                 492 304              941 420              492 304             112 440 
 Cash and cash equivalents at                        267                  167                  267                 912 
  beginning of the period               ----------------    -----------------    -----------------    ---------------- 
                                      ------------------  -------------------  -------------------  ------------------ 
 Cash and cash equivalents at                  1 369 056            1 289 795            1 369 056             189 429 
  the end of the period                              048                  771                  048                 195 
                                              ==========            =========           ==========           ========= 
                                      ------------------  -------------------  -------------------  ------------------ 
 

*The Historical Cost information has been shown as supplementary information for the benefit of users. These are not required in terms of International Accounting Standard (IAS) 29 "Financial Reporting in Hyperinflationary Economies". The Reviewer has not expressed an opinion on the Historical Cost information.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

for the six months ended 30 June 2020

   1.         REPORTING ENTITY 

The Holding Company is incorporated and domiciled in Zimbabwe and is an investment holding company. Its registered office address is 64 Kwame Nkrumah Avenue, Harare. Its principal operating subsidiary is engaged in commercial and retail banking. NMB Bank Limited is a registered commercial bank and was incorporated in Zimbabwe on 16 October 1992 and commenced trading on 1 June 1993. The Bank operated as an Accepting House until 6 December 1999 when the licence was converted to that of a Commercial Bank. The Bank is exposed to the following risks in its operations: liquidity risk, credit risk, market risk, operational risk, foreign currency exchange rate risk and interest rate risk.

   2.         ACCOUNTING CONVENTION 

Statement of compliance

These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting. Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in financial position of the Group since the last annual consolidated financial statements as at and for the year ended 31 December 2019. These condensed consolidated interim financial statements do not include all the information required for the full annual financial statements prepared in accordance with International Financial Reporting Standards.

These condensed consolidated interim financial statements were approved by the Board of Directors on 25 August 2020.

   2.1       Basis of preparation 

The condensed consolidated financial statements including comparatives, have been prepared under the inflation adjusted accounting basis to account for changes in the general purchasing power of the ZWL. The restatement is based on the Consumer Price Index at the statement of financial position date. The Public Accountants and Auditors Board (PAAB) issued a pronouncement on 11 October 2019 indicating the economy had become hyper-inflationary. As such, the Directors have prepared the accompanying financial statements using the hyperinflationary statements using the hyper-inflationary accounting basis. The indices are derived from the monthly inflation rates which are issued by the Zimbabwe National Statistics Agency (ZIMSTAT). As a result of the change in the Group's functional currency on 22 February 2019, the CPI indices for the prior periods are in respect of the USD functional currency which was prevailing at the time. The indices used are shown below. These condensed consolidated financial statements are reported in Zimbabwean dollars and rounded to the nearest dollar.

 
 Dates                Indices   Conversion factor 
 31 December 2018       88.81             16.2736 
 30 June 2019          172.61              8.3726 
 31 December 2019      551.63              2.6199 
 30 June 2020        1 445.21              1.0000 
 

The indices have been applied to the historical costs of transactions and balances as follows:

-- All comparative figures as of and for the periods ended 31 December 2018, 30 June 2019, 31 December 2019 have been restated by applying the change in the index from the date of last re-measurement to 30 June 2020;

-- Income statement transactions have been restated by applying the change in the index from the approximate date of the transactions to 30 June 2020;

-- Gains and losses arising from the monetary assets or liability positions have been included in the income statement;

-- Non-monetary assets and liabilities have been restated by applying the change in the index from the date of the transaction to 30 June 2020;

-- Property and equipment and accumulated depreciation have been restated by applying the change in the index from the earlier of February 2009 and date of their purchase or re-assessment to 30 June 2020;

-- Equity has been restated by applying the change in index from the date of issue to 30 June 2020;

The net impact of applying the procedures above is shown in the statement of comprehensive income as the gain or loss on net monetary position.

IAS 29 discourages the publication of historical results as a supplement to the inflation adjusted results. However, historical results have been published to allow comparability of the results during the transitional phase in applying the Standard.

   2.2       F unctional and presentation currency 

For the purpose of the consolidated financial statements, the results and financial position of the Group are expressed in Zimbabwe Dollars (ZWL) which is the functional currency of the Group, and the presentation currency for the consolidated financial statements. Note 2.5.6 provides further information on the determination of the Group's functional currency.

   2.3       Basis of consolidation 

The Group financial results incorporate the financial results of the Company and its subsidiaries. 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 the 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.

   2.4       Comparative financial information 

The interim financial statements comprise consolidated statements of financial position, comprehensive income, changes in equity and cash flows. The comparative information covers a period of six months.

   2.5       Use of estimates and judgements 

In preparation of the Group financial statements, Directors have made judgments, 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 estimates are recognised prospectively.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the six months ended 30 June 2020 is included in the following notes:

   2.5.1    Deferred tax 

Provision for deferred taxation 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. 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.

   2.5.2     Valuation of properties 

Significant judgements and estimates have been applied as detailed below for the valuation of Investment Properties and of Land and Buildings held under Property, Plant and Equipment:

Statutory Instrument 142 of 2019 introduced the Zimbabwe Dollar (ZWL) as the sole legal tender effective 24 June 2019. This appears to have been a follow up measure to the Monetary Policy Statement (MPS) of 22 February 2019 which added the RTGS$ to the then basket of currencies. The MPS established an Inter-Bank Foreign Exchange market which continued to function up to the reporting year end date. These events have created complex valuation challenges for the short term.

Valuations rely on historical market evidence for calculation inputs. This includes transaction prices for comparable properties, rents and capitalisation rates. Such market evidence does not exist at present to calculate ZWL values. Therefore, valuers have adopted the approach for the meanwhile of converting USD valuation inputs at the Inter-Bank Foreign Exchange Auction Rate of the day to calculate ZWL property values.

This approach, however, presents a multitude of risks to the users of the valuation reports. These are detailed below:

Overstating the property values

The key inputs for the valuation of non-residential investment property are the rent income and the capitalisation rate. No trends for ZWL rents have yet been established neither is there easily verifiable market evidence of ZWL transactions to enable analysis of the yields. It is unlikely that ZWL rent movements will mirror the activity on the Inter-Bank Foreign Exchange market. In addition, the property market will price the risk associated with the ZWL which is not a fully convertible currency, and this will be reflected through the capitalisation rates.

Therefore, a direct conversion of USD valuation inputs likely results in overstated ZWL property values.

Property sub-sectors will respond differently to the new currency

To use a single conversion rate for different property sub-sectors does not recognise the fact that each will respond differently to the reintroduced ZWL. Non-residential property is likely to lag behind the economic cycle quite considerably. Whereas residential property which is more sentiment driven, is likely to respond positively quicker.

Ignoring market dynamics (supply and demand)

Applying a conversion rate to USD valuation inputs to calculate ZWL property values is not an accurate reflection of market dynamics. Risks associated with currency trading do not reflect the risks associated with property trading. The two markets perceive and price their respective risks quite differently.

It is, therefore, unlikely that property values will strictly track the movement in the Inter-Bank Foreign Exchange Rate.

   2.5.3    Investment securities 

The Group has Treasury Bills for which there is currently no market information to facilitate the application of fair value principles, in determining fair value disclosures.

However, in terms of IFRS 9, investment securities measured at amortised cost do not require fair value adjustments. As such none of the Group's investment securities required the application of fair value measurement principles to determine their carrying amounts.

   2.5.4    Intangible assets 

Intangible assets are initially recognised at cost. Subsequently the assets are measured at

cost less     accumulated   amortisation and any impairment loss. 
   2.5.5      Impairment losses on financial instruments 

The Bank recognises loss allowances for Expected Credit Losses (ECLs) on the following financial

instruments that are not measured at Fair Value through Profit or Loss (FVTPL):

   --    loans and advances to banks; 
   --    loans and advances to customers; 
   --    debt investment securities; 
   --    lease receivables; 
   --    loan commitments issued; and 
   --    financial guarantee contracts issued. 

No impairment loss is recognised on equity investments. With the exception of purchased or originated credit-impaired (POCI) financial assets (which are considered separately below), ECLs are measured through a loss allowance at an amount equal to:

-- 12-month ECL, i.e. lifetime ECL that result from those default events on the financial instrument that are

possible within 12 months after the reporting date (referred to as Stage 1); or

-- Full lifetime ECL, i.e. lifetime ECL that result from all possible default events over the life of the financial instrument (referred to as Stage 2 and Stage 3).

A loss allowance for full lifetime ECL is required for a financial instrument if the credit risk on that financial instrument has increased significantly since initial recognition. For all other financial instruments, ECLs are measured at an amount equal to the 12-month ECL.

   2.5.6    Determination of functional currency 

The Government of Zimbabwe adopted a multi-currency regime in 2009. The British Pound, Euro, United States Dollar (USD), South African Rand (ZAR) and Botswana Pula were adopted as the multi-currency basket in February 2009. In January 2014, the Reserve Bank of Zimbabwe (RBZ) issued a Monetary Policy Statement which added the Chinese Yuan, Australian Dollar, Indian Rupee, Japanese Yen into the basket of multi-currencies. At the onset, the USD and the ZAR were the commonly used currencies, with the USD eventually gaining prominence resulting in it being designated as the functional and presentation currency by the transacting public and the Monetary Authorities, including the Group.

Between 2014 and 2016, the Zimbabwean economy experienced a massive liquidity crisis which eventually prompted the Monetary Authorities to introduce the bond notes in November 2016 whilst encouraging the public to continue using the other currencies in the multi-currency basket. The bond notes were introduced at an official fixed exchange rate of 1:1 with the USD and the Monetary Authorities specifically directed financial institutions not to open separate vault and cash accounts for the USD and the bond notes. The introduction of the bond notes gave rise to a three (3) tier pricing system wherein sellers and service providers would quote three (3) separate prices (USD, bond notes and RTGS/electronic transfers) for their merchandise and services respectively. Significant discounts were being offered for USD payments whilst a premium would be added for prices quoted in bond notes or electronic settlement via the Real Time Gross Settlement System (RTGS). These developments triggered a debate around the functional currency of Zimbabwe. It should be noted that the Group never participated in the three tier pricing and none of its products had multiple prices during the same period.

In October 2018, the Monetary Authorities instructed financial institutions to separate bond notes and USD accounts and indicated that corporates and individuals could proceed to open Nostro Foreign Currency Accounts (FCA), for foreign currency holdings, which were now being exclusively distinguished from the existing RTGS based accounts. However, it should be noted that at the time of this policy pronouncement, the Monetary Authorities did not state that they had introduced a new currency for Zimbabwe, which actually meant that the USD remained as the currency of reference. By 31 December 2018, there had been no pronouncement by the Monetary Authorities to the effect that there had been a new currency introduced, which could be considered as the country's functional currency.

On 22 February 2019, the Reserve Bank of Zimbabwe (RBZ) issued an Exchange Control Directive, RU 28 of 2019 which established an interbank foreign exchange market to formalise the buying and selling of foreign currency through the Banks and Bureaux de change. In order to establish an exchange rate between the current monetary balances and foreign currency, the Monetary Authorities denominated the existing RTGS balances in circulation as RTGS Dollars. Initial trades on 22 February 2019 were at USD1: RTGS$2.5.

On the same date, Statutory Instrument 33 of 2019 was also issued and it specified that for accounting and other purposes, all assets and liabilities that were in USD immediately before the 22(nd) of February 2019 were deemed to have been valued in RTGS Dollars at a rate of 1:1 with the USD.

On 24 June 2019, the Monetary Authorities announced that the multi-currency regime, which the country was operating in since February 2009 had been discontinued and the country had adopted a mono-currency regime meaning that the sole legal tender would be the Zimbabwe Dollar (ZWL).

On 26 March 2020, the Reserve Bank of Zimbabwe in a press statement announced various interventions in response to the financial vulnerabilities caused by the COVID-19 pandemic. One of the measures announced therein was the authorization of the use of free-funds in paying for goods and services, in terms of Statutory Instrument (SI) 85 of 2020. On 24 July 2020, the Government of Zimbabwe issued Statutory Instrument (SI) 185 of 2020, which granted permission to display, quote or offer prices for all goods and services in both Zimbabwe dollars and foreign currency at the interbank exchange rate.

On 23 June 2020, the Reserve Bank of Zimbabwe introduced the Foreign Exchange Auction System, effectively abandoning the fixed foreign currency exchange rate regime which had been prevailing for the greater part of 2020. Significant trades have been recorded on the platform and significant movements in the exchange rate have been resultantly recorded.

In light of the developments summarised above, the Directors concluded that the Group's functional currency remains the Zimbabwe dollar (ZWL) following its change from US$ with effect from 22 February 2019.

   2.6.0    Lease arrangements 

The Group adopted IFRS 16, Leases, on 1 January 2019. As permitted by the IFRS 16 transitional provisions, the Group elected not to restate comparative figures. The Directors exercised significant judgement on determining whether the various contractual relationships which the Group is party to, contain lease arrangements which fall into the scope of IFRS 16. Significant judgement was also exercised in determining whether the Group is reasonably certain that it will exercise extension options present in lease contracts as well as the determination of incremental borrowing rates applied in determining the lease liability.

   2.6.1   COVID-19 

The Directors fully acknowledge the unprecedented challenges and uncertainties posed by the COVID-19 pandemic. In that regard, significant judgments have generally been applied in light of the likely impacts of COVID-19 on the Group's activities.

   2.6.2    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 below. These policies have been consistently applied unless otherwise stated.

   3.1       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.

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 recognised in the profit or loss statement. The fair value is determined at the end of each reporting period by a professional valuer.

   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 

The residual value and the useful life of property and equipment are reviewed at least each financial period-end. The revaluation model is used for the Group's land and buildings with the fair values determined by an independent professional valuer using significant unobservable market inputs. 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 amortisation and any accumulated impairment losses.

   3.6       Shareholders' funds and shareholders' liabilities 

Shareholders' funds and shareholders' liabilities refer to the total investment made by the shareholders to the Group and it consists of share capital, share premium, Functional Currency Translation Reserve, share options reserve, retained earnings, redeemable ordinary shares and subordinated term loans.

   3.7       Taxation 

Income tax

Income tax expenses comprise current 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. 

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.

   3.8       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.

   3.9       Revenue from contracts with customers 

Revenue is recognised to the extent that it is probable that the Group has satisfactorily performed the performance obligations set out in the underlying contract with its customers and that economic benefits will flow to the Group 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.

   3.10     Interest income 

For all financial instruments measured at 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.

      3.11     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.

   3.12     Leases 

Lease income from operating leases where the Group is a lessor is recognised in income on a straight-line basis over the lease term. The respective leased assets are included in the statement of financial position based on their nature.

In terms of IFRS 16, the Group recognises lease liabilities in relation to leases which had previously been classified as 'operating leases' under the principles of IAS 17, Leases. These liabilities are measured at the present value of the remaining lease payments, discounted using the Group's incremental borrowing rate.

The Group has neither enjoyed nor extended any lease payment holidays in its capacity as either lessee or lessor respectively due to COVID-19. As such, there are no COVID-19 induced lease modifications applicable during the period under review.

Measurement of right-of-use assets

The associated right-of-use assets for property leases are measured on a prospective basis. The right-of-use assets are measured at the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the consolidated statement of financial position.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. In circumstances where the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset's useful life. The Group revalues its land and buildings that are presented within property and equipment and it has elected not to do so for the right-of-use buildings held by the Group.

Lessor accounting

The Group did not need to make any adjustments to the accounting for lease contracts in which the Group is the lessor under operating leases as a result of the adoption of IFRS 16.

Short-term leases

The Group does not recognise lease liabilities or Right-of-Use Assets in respect of short-term leases which are accounted for on a straight-line basis.

   3.13     Financial Instruments 

When the fair value of financial assets and liabilities differs from the transaction price on initial recognition, the entity recognises the difference as follows:

(a) When the fair value is evidenced by a quoted price in an active market for an identical asset or liability (i.e. a Level 1 input) or based on a valuation technique that uses only data from observable markets, the difference is recognised as a gain or loss.

(b) In all other cases, the difference is deferred and the timing of recognition of deferred day one profit or loss is determined individually. It is either amortised over the life of the instrument, deferred until the instrument's fair value can be determined using market observable inputs, or realised through settlement.

   3.13.1    Financial Assets 

(i) Classification and subsequent measurement

The Group classifies its financial assets in the following measurement categories:

   --    Fair value through profit or loss (FVPL); 
   --    Fair value through other comprehensive income (FVOCI); or 
   --    Amortised cost. 

The classification requirements for debt and equity instruments are described below:

Debt instruments

Debt instruments are those instruments that meet the definition of a financial liability from the issuer's perspective, such as loans, government and corporate bonds and trade receivables purchased from clients in factoring arrangements without recourse.

Classification and subsequent measurement of debt instruments depend on:

   --    the Banking subsidiary's business model for managing the asset; and 
   --    the cash flow characteristics of the asset. 

Based on these factors, the Bank classifies its debt instruments into one of the following three measurement categories:

-- Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest ('SPPI'), and that are not designated at FVPL, are measured at amortised cost. The carrying amount of these assets is adjusted by any expected credit loss allowance. Interest income from these financial assets is included in interest and similar income using the effective interest rate method.

-- Fair value through other comprehensive income (FVOCI): Financial assets that are held for collection of contractual cash flows and for selling the assets, where the assets' cash flows represent solely payments of principal and interest and that are not designated at FVPL, are measured at fair value through other comprehensive income (FVOCI). Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses on the instrument's amortised cost which are recognised in profit or loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in "Net Investment Income'. Interest income from these financial assets is included in 'Interest Income' using the effective interest rate method.

-- Fair value through profit or loss: Assets that do not meet the criteria for amortised cost or FVOCI are

measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is recognised in profit or loss and presented in the profit or loss statement within 'Net Trading Income" in the period in which it arises, unless it arises from debt instruments that were designated at fair value or which are not held for trading, in which case they are presented separately in 'Net Investment Income'. Interest income from these financial assets is included in "Interest income" using the effective interest rate method.

Business model: the business model reflects how the Bank manages the assets in order to generate cash flows. That is, whether the Bank's objective is solely to collect the contractual cash flows from the assets or is to collect both the contractual cash flows and cash flows arising from the sale of assets. If neither of these is applicable (e.g. financial assets are held for trading purposes), then the financial assets are classified as part of 'other' business model and measured at FVPL. Factors considered by the Bank in determining the business model for a group of assets include past experience on how the cash flows for these assets were collected, how the asset's performance is evaluated and reported to key management personnel, how risks are assessed and managed and how managers are compensated. Securities held for trading are held principally for the purpose of selling in the near term or are part of a portfolio of financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking. These securities are classified in the 'other' business model and measured at FVPL.

Where the business model is to hold assets to collect contractual cash flows or to collect contractual cash flows and sell, the Bank assesses whether financial instruments' cash flows represent solely payments of principal and interest (the "SPPI" test). In making this assessment, the Bank considers whether the contractual cash flows are consistent with a basic lending arrangement i.e. interest includes only consideration for the time value of money, credit risk, other basic lending risks and a profit margin that is consistent with a basic lending arrangement. Where the contractual terms introduce exposure to risk or volatility that are inconsistent with a basic lending arrangement, the related financial asset is classified and measured at fair value through profit or loss.

The Bank reclassifies debt investments when and only when its business model for managing those assets changes. The reclassification takes place from the start of the first reporting period following the change. Such changes are expected to be very infrequent and none occurred during the period.

Equity instruments

Equity instruments are instruments that meet the definition of equity from the issuer's perspective; that is, instruments that do not contain a contractual obligation to pay and that evidence a residual interest in the issuer's net assets. Examples of equity instruments include basic ordinary shares.

The Bank subsequently measures all equity investments at fair value through profit or loss, except where the Bank's management has elected, at initial recognition, to irrevocably designate an equity investment at fair value through other comprehensive income. The Bank policy is to designate equity investments as FVOCI when those investments are held for purposes other than to generate investment returns. When this election is used, fair value gains and losses are recognised in OCI and are not subsequently reclassified to profit or loss, including on disposal. Impairment losses (and reversal of impairment losses) are not reported separately from other changes in fair value. Dividends, when representing a return on such investments, continue to be recognised in profit or loss as other income when the Bank's right to receive payments is established.

Gains and losses on equity investments at FVPL are included in the 'Other Income' line in the statement of profit or loss.

(ii) Impairment

The Bank recognises loss allowances for Expected Credit Losses (ECLs) on the following financial instruments that are not measured at Fair Value through Profit or Loss (FVTPL):

   --    loans and advances to banks; 
   --    loans and advances to customers; 
   --    debt investment securities; 
   --    lease receivables; 
   --    loan commitments issued; and 
   --    financial guarantee contracts issued. 

No impairment loss is recognised on equity investments. With the exception of POCI financial assets (which are considered separately below), ECLs are measured through a loss allowance at an amount equal to:

-- 12-month ECL, i.e. lifetime ECL that result from those default events on the financial instrument that are possible within 12 months after the reporting date, (referred to as Stage 1); or

-- Full lifetime ECL, i.e. lifetime ECL that result from all possible default events over the life of the financial instrument, (referred to as Stage 2 and Stage 3).

A loss allowance for full lifetime ECL is required for a financial instrument if the credit risk on that financial instrument has increased significantly since initial recognition. For all other financial instruments, ECLs are measured at an amount equal to the 12-month ECL.

Expected Credit Losses

ECLs are a probability-weighted estimate of the present value of credit losses. These are measured as the present value of the difference between the cash flows due to the Bank under the contract and the cash flows that the Bank expects to receive arising from the weighting of multiple future economic scenarios, discounted at the asset's EIR.

For undrawn loan commitments, the ECL is the difference between the present value of the difference between the contractual cash flows that are due to the Bank if the holder of the commitment draws down the loan and the cash flows that the Bank expects to receive if the loan is drawn down; and for financial guarantee contracts, the ECL is the difference between the expected payments to reimburse the holder of the guaranteed debt instrument less any amounts that the Bank expects to receive from the holder, the debtor or any other party.

The Bank measures ECL on an individual basis, or on a collective basis for portfolios of loans that share similar economic risk characteristics. The measurement of the loss allowance is based on the present value of the asset's expected cash flows using the asset's original EIR, regardless of whether it is measured on an individual basis or a collective basis.

Special consideration has been made in respect of the uncertainties posed by the COVID-19 pandemic on the recoverability of the Group's financial instruments. The Group's ECL computations have taken this into account, resulting in notable increases in the ECL.

Credit-impaired financial assets

A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired include observable data about the following events:

(a) significant financial difficulty of the issuer or the borrower;

(b) a breach of contract, such as a default or past due event;

(c) the lender(s) of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise consider;

(d) it becoming probable that the borrower will enter bankruptcy or other financial reorganisation;

(e) the disappearance of an active market for that financial asset because of financial difficulties; or

(f) the purchase or origination of a financial asset at a deep discount that reflects the incurred credit losses.

It may not be possible to identify a single discrete event-instead, the combined effect of several events may have caused financial assets to become credit-impaired.

Purchased or originated credit-impaired (POCI) financial assets

For POCI the Bank only recognises the cumulative changes in lifetime expected credit losses since initial

recognition. At each reporting date, the Bank recognises in profit or loss the amount of the change in lifetime expected credit losses as an impairment gain or loss. The Bank recognises favourable changes in lifetime expected credit losses as an impairment gain, even if the lifetime expected credit losses are less than the amount of expected credit losses that were included in the estimated cash flows on initial recognition.

The Bank assesses on a forward-looking basis the expected credit losses ('ECL') associated with its debt instrument assets carried at amortised cost and FVOCI and with the exposure arising from loan commitments and financial guarantee contracts. The Bank recognises a loss allowance for such losses at each reporting date. The measurement of ECL reflects:

-- An unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes;

   --    The time value of money; and 

-- Reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.

For loan commitments and financial guarantee contracts, the loss allowance is recognised as a provision. The Bank keeps track of the changes in the loss allowance for financial assets separately from those for loan commitments and financial guarantee contracts. However, if a financial instrument includes both a loan (i.e. financial asset) and an undrawn commitment (i.e. loan commitment) component and the Bank does not separately identify the expected credit losses on the loan commitment component from those on the financial asset component, the expected credit losses on the loan commitment is recognised together with the loss allowance for the financial asset. To the extent that the combined expected credit losses exceed the gross carrying amount of the financial asset, the expected credit losses is recognised as a provision.

Definition of default and cure

Critical to the determination of ECL is the definition of default. The definition of default is used in measuring the amount of ECL and in the determination of whether the loss allowance is based on 12-month or lifetime ECL, as default is a component of the probability of default (PD) which affects both the measurement of ECLs and the identification of a significant increase in credit risk.

The Bank considers the following as constituting an event of default:

   --    The borrower is past due more than 90 days on any material credit obligation to the Bank or; 
   --    The borrower is unlikely to pay its credit obligations to the Bank in full. 

The definition of default is appropriately tailored to reflect different characteristics of different types of assets. Overdrafts are considered as being past due once the customer has breached an advised limit or has been advised of a limit smaller than the current amount outstanding.

When assessing if the borrower is unlikely to pay its credit obligation, the Bank takes into account both qualitative and quantitative indicators. The information assessed depends on the type of the asset, for example in corporate lending a qualitative indicator used is the breach of covenants, which is not relevant for retail lending. Quantitative indicators, such as overdue status and non-payment on another obligation of the same counterparty are key inputs in this analysis. The Bank uses a variety of sources of information to assess default which are either developed internally or obtained from external sources.

It is the Bank's policy to consider a financial instrument as 'cured' and subsequently reclassified out of Stage 3 when none of the above mentioned default criteria have been present for at least six consecutive months. The decision whether to classify a financial asset as Stage 1 or Stage 2 once cured depends on the updated credit grade at the time of the cure and whether this indicates that there has been a significant increase in credit risk compared to initial recognition.

Significant increase in credit risk

The Bank monitors all financial assets, undrawn loan commitments and financial guarantee contracts that are subject to the impairment requirements to assess whether there has been a significant increase in credit risk since initial recognition. If there has been a significant increase in credit risk the Bank will measure the loss allowance based on lifetime rather than 12-month ECL. The Bank's accounting policy is not to use the practical expedient that financial assets with 'low' credit risk at the reporting date are deemed not to have had a significant increase in credit risk. As a result, the Bank monitors all financial assets, undrawn loan commitments and financial guarantee contracts that are subject to impairment for significant increase in credit risk.

In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the Bank compares the risk of a default occurring on the financial instrument at the reporting date based on the remaining maturity of the instrument with the risk of a default occurring that was anticipated for the remaining maturity at the current reporting date when the financial instrument was first recognised. In making this assessment, the Bank considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort, based on the Bank's historical experience and expert credit assessment including forward-looking information.

Multiple economic scenarios form the basis of determining the probability of default at initial recognition

and at subsequent reporting dates. Different economic scenarios will lead to a different probability of default. It is the weighting of these different scenarios that forms the basis of a weighted average probability of default that is used to determine whether credit risk has significantly increased.

For corporate lending, forward-looking information includes the future prospects of the industries in which the Bank's lenders operate, obtained from economic expert reports, financial analysts, governmental bodies and other similar organisations, as well as consideration of various internal and external sources of actual and forecast economic information. For the retail portfolio, forward looking information includes the same economic forecasts as the corporate portfolio with additional forecasts of local economic indicators, particularly for regions with a concentration to certain industries, as well as internally generated information of customer payment behaviour. The Bank allocates its counterparties to a relevant internal credit risk grade depending on their credit quality. The quantitative information is a primary indicator of significant increase in credit risk and is based on the change in lifetime PD by comparing:

   --    The remaining lifetime PD at the reporting date; with 

-- the remaining lifetime PD for this point in time that was estimated based on facts and circumstances at the time of initial recognition of the exposure.

The PDs used are forward looking and the Bank uses the same methodologies and data used to measure the loss allowance for ECL.

The qualitative factors that indicate significant increase in credit risk are reflected in PD models on a timely basis. However, the Bank still considers separately additional qualitative factors to assess if credit risk has increased significantly. For corporate lending there is particular focus on assets that are included on the Bank's 'watch list' and for the retail portfolio the Bank considers the expectation of forbearance and payment holidays, credit scores and any other changes in the borrower's circumstances which are likely to adversely affect one's ability to meet contractual obligations.

Given that a significant increase in credit risk since initial recognition is a relative measure, a given change, in absolute terms, in the PD will be more significant for a financial instrument with a lower initial PD than compared to a financial instrument with a higher PD.

The Bank assumes that when an asset becomes 30 days past due, the Bank considers that a significant increase in credit risk has occurred and the asset is in stage 2 of the impairment model, i.e. the loss allowance is measured as the lifetime ECL.

(iii) Modification of loans

The Bank sometimes renegotiates or otherwise modifies the contractual cash flows of loans to customers. When this happens, the Bank assesses whether or not the new terms are substantially different to the original terms. The Bank does this by considering, among others, the following factors:

-- If the borrower is in financial difficulty, whether the modification merely reduces the contractual cash flows to amounts the borrower is expected to be able to pay.

-- Whether any substantial new terms are introduced, such as a profit share/equity-based return that substantially affects the risk profile of the loan.

-- Significant extension of the loan term when the borrower is not in financial difficulty. Significant change in the interest rate.

-- Change in the currency the loan is denominated in.

-- Insertion of collateral, other security or credit enhancements that significantly affect the credit risk associated with the loan.

If the terms are substantially different, the Bank derecognises the original financial asset and recognises a 'new' asset at fair value and recalculates the new effective interest rate for the asset. The date of renegotiation is consequently considered to be the date of initial recognition for impairment calculation purposes, including for the purpose of determining whether a significant increase in credit risk has occurred. However, the Bank also assesses whether the new financial asset recognised is deemed to be credit-impaired at initial recognition, especially in circumstances where the renegotiation was driven by the debtor being unable to make the originally agreed payments. Differences in the carrying amount are

also recognised in profit or loss as a gain or loss on derecognition.

If the terms are not substantially different, the renegotiation or modification does not result in derecognition, and the Bank recalculates the gross carrying amount based on the revised cash flows of the financial asset and recognises a modification gain or loss in profit or loss. The new gross carrying amount is recalculated by discounting the modified cash flows at the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired financial assets).

(iv) Derecognition other than on a modification

Financial assets, or a portion thereof, are derecognised when the contractual rights to receive the cash flows from the assets have expired, or when they have been transferred and either

-- the Bank transfers substantially all the risks and rewards of ownership, or

-- the Bank neither transfers nor retains substantially all the risks and rewards of ownership and the Bank has not retained control.

The Bank enters into transactions where it retains the contractual rights to receive cash flows to other entities and transfers substantially all of the risks and rewards. These transactions are accounted for as 'pass through' transfers that result in derecognition if the Bank:

   (i)       Has no obligation to make payments unless it collects equivalent amounts from the assets; 
   (ii)     Is prohibited from selling or pledging the assets; and 
   (iii)     Has an obligation to remit any cash it collects from the assets without material delay. 

Collateral (shares and bonds) furnished by the Bank under standard repurchase agreements and securities lending and borrowing transactions are not derecognised because the Bank retains substantially all the risks and rewards on the basis of the predetermined repurchase price, and the criteria for derecognition are therefore not met. This also applies to certain securitisation transactions in which the Bank retains a subordinated residual interest.

   3.13.2   Financial Liabilities 

(i) Classification and subsequent measurement

In both the current and prior period, financial liabilities are classified as subsequently measured at amortised cost, except for:

Financial liabilities at fair value through profit or loss: this classification is applied to financial liabilities held for trading (e.g. short positions in the trading booking) and other financial liabilities designated as such at initial recognition. Gains or losses on financial liabilities designated at fair value through profit or loss are presented partially in other comprehensive income (the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability, which is determined as the amount that is not attributable to changes in market conditions that give rise to market risk) and partially profit or loss (the remaining amount of change in the fair value of the liability). This is unless such a presentation would create, or enlarge, an accounting mismatch, in which case the gains and losses attributable to changes in the credit risk of the liability are also presented in profit or loss;

Financial liabilities arising from the transfer of financial assets which did not qualify for derecognition, whereby a financial liability is recognised for the consideration received for the transfer. In subsequent periods, the Bank recognises any expense incurred on the financial liability.

(ii) Derecognition

Financial liabilities are derecognised when they are extinguished (i.e. when the obligation specified in the contract is discharged, cancelled or expires).

The exchange between the Bank and its original lenders of debt instruments with substantially different terms, as well as substantial modifications of the terms of existing financial liabilities, are accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability.

The terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability. In addition, other qualitative factors, such as the currency that the instrument is denominated in, changes in the type of interest rate, new conversion features attached to the instrument and change in covenants are also taken into consideration. If an exchange of debt instruments or modification of terms is accounted for as an extinguishment, any costs or fees incurred are recognised as part of the gain or loss on the extinguishment. If the exchange or modification is not accounted for as an extinguishment, any costs or fees incurred adjust the carrying amount of the liability and are amortised over the remaining term of the modified liability.

   3.13.3   Financial guarantee contracts and loan commitments 

Financial guarantee contracts are contracts that require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due, in accordance with the terms of a debt instrument. Such financial guarantees are given to banks, financial institutions and others on behalf of customers to secure loans, overdrafts and other banking facilities.

Financial guarantee contracts are initially measured at fair value and subsequently measured at the higher of:

   --    The amount of the loss allowance; and 

-- The premium received on initial recognition less income recognised in accordance with the principles of IFRS15.

Loan commitments provided by the Bank are measured as the amount of the loss allowance. The Bank has not provided any commitment to provide loans at below-market interest rate, or that can be settled net in cash or by delivering or issuing another financial instrument.

For loan commitments and financial guarantee contracts, the loss allowance is recognised as a provision. However, for contracts that include both a loan and an undrawn commitment and the Bank cannot separately identify the expected credit losses on the undrawn commitment component from those on the loan component, the expected credit losses on the undrawn commitment are recognised together with the loss allowance for the loan. To the extent that the combined expected credit losses exceed the gross carrying amount of the loan, the expected credit losses are recognised as a provision.

   3.13.4   Critical Accounting Estimates and Judgements 

The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Bank's accounting policies.

Note 2.5 (Use of estimates and judgements) provides an overview of the areas that involve a higher degree of judgement or complexity, and major sources of estimation uncertainty that have a significant risk of resulting in a material adjustment within the next financial year. Detailed information about each of these estimates and judgements is included in the related notes together with information about the basis of calculation for each affected line item in the financial statements.

   3.13.5    Measurement of the expected credit loss allowance 

The measurement of the expected credit loss allowance for financial assets measured at amortised cost and FVOCI is an area that requires the use of complex models and significant assumptions about future economic conditions and credit behaviour (e.g. the likelihood of customers defaulting and the resulting losses). A number of significant judgements are also required in applying the accounting requirements for measuring ECL, such as:

   --     Determining criteria for significant increase in credit risk; 
   --    Choosing appropriate models and assumptions for the measurement of ECL; 
   --   Establishing the number and relative weightings of forward-looking scenarios for each type of product/market and the associated ECL; and 
   --    Establishing groups of similar financial assets for the purposes of measuring ECL. 

The Bank evaluates ECLs for 7 portfolios of audited corporates with overdraft limits, audited corporates without overdraft limits, unaudited corporates with overdraft limits, unaudited corporates without overdraft limits, SMEs with limits, SMEs without limits and Retail loans.

The guiding principle of the Expected Credit Loss evaluation is to reflect the general pattern of deterioration or improvement in the credit quality of financial instruments and allocate commensurate loss provisions. Under the general approach, there are two measurement bases:

-- 1 2-month ECLs (Stage 1 ECLs) that is evaluated for all financial instruments with no significant deterioration in credit quality since initial recognition.

-- Lifetime ECLs (Stages 2 and 3 ECLs) that is evaluated for financial instruments for which significant increase in credit risk or default has occurred on an individual or collective basis.

Probability of Default (PD)

The Bank defines Probability of Default as the likelihood that a borrower will fail to meet their contractual obligations in the future. The Bank's PD models have been built using historical credit default experience, present credit information as well as forward looking factors which affect the capacity of borrowers to meet their contractual obligations. The Bank used the logistic regression approach to construct PD models for Corporate, SME, Retail and Treasury Bills portfolios while the Merton model was adopted for Interbank Placements. The PD models are used at entity level to evaluate 12-month PDs for Day 1 losses and for financial instruments with no significant deterioration in credit risk since initial recognition, whilst lifetime PD is used for financial instruments for which significant increase in credit risk or default has occurred. 12-month PDs are derived using borrower present risk characteristics while lifetime PDs are derived using a combination of 12-month PDs, present borrower behaviour and forward looking macroeconomic factors.

Exposure at Default (EAD)

The Bank defines Exposure at Default as an estimation of the extent to which the Bank will be exposed to a counterparty in the event of a default. The Bank's EAD models have been built using historical experience of debt instruments that defaulted. The Bank used the linear regression approach to construct EAD models for Corporate, SME and Retail portfolios. For TBs and Interbank Placements, the Bank took a conservative approach of considering the full outstanding balance as the EAD at any given point in the lifetime of an instrument. The Bank's EAD models that use Credit Conversion Factors (CCFs) are

applied on fully drawn down instruments while models that use Loan Equivalents (LEQs) are applied on partly drawn instruments. The EAD models are used at entity level to evaluate the proportion of the exposure that will be outstanding at the point of default.

Loss Given Default (LGD)

The Bank defines Loss Given Default as an estimate of the ultimate credit loss in the event of a default. The Bank's LGD models were built using historical experience of defaulted debt instruments and observed recoveries. The Bank used the linear regression approach to construct LGD models for Corporate, SME and Retail portfolios. For Treasury Bills and Interbank Placements, the Bank took a conservative approach of taking a fixed 100% as the LGD at any given point in the lifetime of an instrument.

Loss Given Default (LGD)

The LGD models are used at portfolio level to evaluate 12-month LGDs for financial instruments with no significant increase in credit risk since initial recognition and lifetime is applied LGDs for financial instruments for which significant increase in credit risk has occurred. 12-month LGDs were derived as historical loss rates while lifetime LGDs were derived using a combination of 12-month LGDs and forward looking macroeconomic factors such as GDP and Inflation.

The Bank's ECL model combines the output of the PD, EAD and LGD and computes an Expected Credit Loss that takes into account time value of money using the Effective Interest Rates (EIR) and time to maturity of the debt instruments.

The final ECL is a probability-weighted amount that is determined by evaluating three (3) possible outcomes of Best Case ECL, Baseline Case ECL, and Worst Case ECL. The Bank has modelled these three cases in such a way that the Best Case represents scenario of lower than market average default rates, the Base Case represents scenarios of comparable market average default rates and the Worst Case represent scenarios of higher than market average default rates.

Renegotiated loans and advances

Where possible, the Bank seeks to restructure loans rather than to take possession of collateral. This may involve extending the payment arrangements and the agreement of new loan conditions. Once the terms have been re-negotiated, any impairment is measured using the original effective interest rate (EIR) as calculated before the modification of terms and the loan is no longer considered past due. Management continuously renews re-negotiated loans to ensure that all criteria are met and that future payments are likely to occur. The loans continue to be subject to an individual or collective impairment assessment, calculated using the loans original EIR.

Collateral valuation

The Bank seeks to use collateral, where possible, to mitigate its risks on financial assets. The collateral comes in various forms such as cash, securities, letters of credit/guarantees, real estate, receivables,

inventories, other non-financial assets and credit enhancements such as netting agreements. The fair value of collateral is generally assessed, at a minimum, at inception and based on the Bank's quarterly reporting schedule, however, some collateral, for example, cash or securities relating to margining requirements, is valued daily. To the extent possible, the Bank uses active market data for valuing financial assets, held as collateral. Other financial assets which do not have a readily determinable market value are valued using models. Non-financial collateral, such as real estate, is valued based on data provided by third parties such as mortgage brokers, housing price indices, audited financial statements, and other independent sources.

Collateral repossessed

The Bank's policy is to determine whether a repossessed asset is best used for its internal operations or should be sold. Assets determined to be useful for the internal operations are transferred to their relevant asset category at the lower of their repossessed value or the carrying value of the original secured asset. Assets that are determined better to be sold are immediately transferred to assets held for sale at their fair value at the repossession date in line with the Bank's policy.

   4.         INTEREST INCOME 
 
                                     Inflation adjusted                           Historical Cost 
                                      30 June              30 June               30 June               30 June 
                         --------------------  -------------------  --------------------  -------------------- 
                                         2020                 2019                  2020                  2019 
                         --------------------  -------------------  --------------------  -------------------- 
                                          ZWL                  ZWL                   ZWL                   ZWL 
                         --------------------  -------------------  --------------------  -------------------- 
                                                          Restated 
                         --------------------  -------------------  --------------------  -------------------- 
 Loans and advances 
  to banks                          5 196 133            3 150 400             2 980 143               282 764 
                         --------------------  -------------------  --------------------  -------------------- 
 Loans and advances 
  to customers                    190 954 025          214 374 164           119 161 161            17 884 227 
                         --------------------  -------------------  --------------------  -------------------- 
                                    9 718 883           67 208 849             5 828 299             5 033 291 
 Investment securities     ------------------    -----------------    ------------------    ------------------ 
                         --------------------  -------------------  --------------------  -------------------- 
                                  205 869 041          284 733 413           127 969 603            23 200 282 
                                  ===========          ===========           ===========           =========== 
                         --------------------  -------------------  --------------------  -------------------- 
 
   5.         NON-INTEREST INCOME 
   5.1       FEE AND COMMISSION INCOME 
 
                                        Inflation adjusted                          Historical Cost 
                                        30 June               30 June              30 June               30 June 
                            -------------------  --------------------  -------------------  -------------------- 
                                           2020                  2019                 2020                  2019 
                            -------------------  --------------------  -------------------  -------------------- 
                                            ZWL                   ZWL                  ZWL                   ZWL 
                            -------------------  --------------------  -------------------  -------------------- 
                                                             Restated 
                            -------------------  --------------------  -------------------  -------------------- 
 Retail banking customer 
  fees                               71 709 961            83 918 750           47 269 488            10 057 590 
                            -------------------  --------------------  -------------------  -------------------- 
 Corporate banking credit 
  related fees                       30 682 472            10 327 568           20 688 016             2 754 380 
                            -------------------  --------------------  -------------------  -------------------- 
 Financial guarantee fees             2 835 946               666 379            1 717 761                79 114 
                            -------------------  --------------------  -------------------  -------------------- 
 International banking 
  commissions                         4 769 260             6 747 517            2 999 072               598 868 
                            -------------------  --------------------  -------------------  -------------------- 
                                        131 179               120 264 
                                            646                   583           81 579 614             5 079 196 
 Digital banking fees         -----------------    ------------------    -----------------    ------------------ 
                            -------------------  --------------------  -------------------  -------------------- 
                                        241 177               221 924              154 253            18 569 148 
                                            285                   797                  951           =========== 
                                     ==========           ===========           ========== 
                            -------------------  --------------------  -------------------  -------------------- 
 
   5.2       OTHER INCOME 
 
                                              Inflation adjusted                          Historical Cost 
                                              30 June               30 June              30 June               30 June 
                                  -------------------  --------------------  -------------------  -------------------- 
                                                 2020                  2019                 2020                  2019 
                                  -------------------  --------------------  -------------------  -------------------- 
                                                  ZWL                   ZWL                  ZWL                   ZWL 
                                  -------------------  --------------------  -------------------  -------------------- 
                                                                   Restated 
                                  -------------------  --------------------  -------------------  -------------------- 
 Trade and other investments 
  fair value adjustments                    3 102 124             4 762 662            5 713 640               506 254 
                                  -------------------  --------------------  -------------------  -------------------- 
 
 Fair value gains on investment               640 103               380 064            1 053 907 
  properties                                      624                   124                  444            27 991 540 
                                  -------------------  --------------------  -------------------  -------------------- 
 Rental income                              1 722 165             2 495 821            1 456 767               194 895 
                                  -------------------  --------------------  -------------------  -------------------- 
 Bad debts recovered                        2 078 628            13 373 536            1 308 953             1 131 780 
                                  -------------------  --------------------  -------------------  -------------------- 
                                           21 353 212            28 625 918            2 434 951                71 189 
 Other net operating income         -----------------    ------------------    -----------------    ------------------ 
                                  -------------------  --------------------  -------------------  -------------------- 
                                              668 359               429 322            1 064 821            29 895 658 
                                                  753                   061                  755           =========== 
                                           ==========           ===========           ========== 
                                  -------------------  --------------------  -------------------  -------------------- 
 
   5.3       OTHER COMPREHENSIVE INCOME 
 
                                 Inflation adjusted                    Historical Cost 
                                 30 June            30 June           30 June           30 June 
                        ----------------  -----------------  ----------------  ---------------- 
                                    2020               2019              2020              2019 
                        ----------------  -----------------  ----------------  ---------------- 
                                     ZWL                ZWL               ZWL               ZWL 
                        ----------------  -----------------  ----------------  ---------------- 
                                                   Restated 
                        ----------------  -----------------  ----------------  ---------------- 
 Revaluations of land 
  and buildings              402 510 811         17 648 367       839 099 708         5 368 653 
                        ----------------  -----------------  ----------------  ---------------- 
                                                                     (207 425 
 Tax effect                 (99 500 673)        (4 544 455)              448)       (1 382 428) 
                        ----------------  -----------------  ----------------  ---------------- 
                         ---------------   ----------------   ---------------   --------------- 
                                 303 010         13 103 912           631 674         3 986 225 
                                     138          =========               260         ========= 
                               =========                            ========= 
                        ----------------  -----------------  ----------------  ---------------- 
 
   6.         Operating EXPITURE 
 
                                      Inflation adjusted                               Historical Cost 
                                       30 June               30 June               30 June                     30 June 
                          --------------------  --------------------  --------------------  -------------------------- 
                                          2020                  2019                  2020                        2019 
                          --------------------  --------------------  --------------------  -------------------------- 
                                           ZWL                   ZWL                   ZWL                         ZWL 
                          --------------------  --------------------  --------------------  -------------------------- 
                                                            Restated 
                                                --------------------  --------------------  -------------------------- 
 The operating profit is after recognising 
  the following: 
                                                --------------------  --------------------  -------------------------- 
                                       179 526               141 674               112 698 
 Administration costs                      651                   553                   385                  11 501 078 
                          --------------------  --------------------  --------------------  -------------------------- 
 Impairment reversal on 
  land and buildings                 -                             -                     -                    (40 600) 
                          --------------------  --------------------  --------------------  -------------------------- 
 Depreciation - 
  (excluding 
  right of use assets)              19 299 688            34 764 116             4 340 825                     988 561 
                          --------------------  --------------------  --------------------  -------------------------- 
 Amortisation of 
  intangible 
  assets                             7 238 239            22 309 322               328 236                     373 555 
                          --------------------  --------------------  --------------------  -------------------------- 
 Depreciation -right of 
  use assets                         1 985 839             5 967 714             1 501 219                     537 067 
                          --------------------  --------------------  --------------------  -------------------------- 
 
 Staff costs - salaries,               119 794               136 408 
  allowances and related                   152                   384            67 541 948                  10 570 330 
  costs                      -----------------     -----------------     -----------------           ----------------- 
                          --------------------  --------------------  --------------------  -------------------------- 
                                       327 844               341 124               186 410                  23 929 991 
                                           569                   089                   613                 =========== 
                                    ==========           ===========            ========== 
                          --------------------  --------------------  --------------------  -------------------------- 
 
   7.         TAXATION 
 
                                Inflation adjusted                       Historical Cost 
                                 30 June             30 June             30 June            30 June 
                      ------------------  ------------------  ------------------  ----------------- 
                                    2020                2019                2020               2019 
                      ------------------  ------------------  ------------------  ----------------- 
                                     ZWL                 ZWL                 ZWL                ZWL 
                      ------------------  ------------------  ------------------  ----------------- 
 Income tax expense                                 Restated 
                      ------------------  ------------------  ------------------  ----------------- 
 Current tax                  22 311 558          16 081 502          22 311 558          1 920 735 
                      ------------------  ------------------  ------------------  ----------------- 
 Deferred tax                133 192 842         146 168 077         111 021 441         15 092 433 
                      ------------------  ------------------  ------------------  ----------------- 
                       -----------------   -----------------   -----------------   ---------------- 
                             155 504 400         162 249 579         133 332 999         17 013 168 
                              ==========          ==========          ==========         ========== 
                      ------------------  ------------------  ------------------  ----------------- 
 
   8.         IMPAIRMENT LOSSES ON FINANCIAL ASSETS MEASURED AT AMORTISED COST 

Impairment losses are calculated by estimating the expected credit losses for all financial assets (including loan commitments and guarantees) measured at amortised cost or fair value through OCI (FVOCI). ECLs arising from financial assets measured at armotised cost and at FVOCI are recognized in profit or loss. However, the loss allowance in respect of assets measured at FVOCI shall not reduce the carrying amount of the financial asset in the Statement of Financial Position but will be accumulated in a reserve through OCI. The aggregate impairment losses which are made during the year are dealt with as per paragraph 8.3.

The Group has considered the increased uncertainties arising out of the COVID-19 developments in the computation of ECLs, resulting in significant increases being noted in the Groups ECLs during the period under review.

   8.1       Lifetime expected credit losses 

Lifetime ECLs are recognized where the Bank's counterparty to a financial asset has been classified as default as defined in the Bank's accounting and credit policies. Financial assets are written off against lifetime ECL provisions once the probability of recovering any significant amounts becomes remote.

   8.2       Twelve Month Expected credit losses 

The 12-Month ECL relates to the day 1 impairment provisions on financial assets as well as financial assets which are considered not to have had a significant increase in credit risk as defined in the Bank's accounting and credit policies.

   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.

IFRS 9, Financial Instruments IFRS 9, prescribes the provisioning for impairment losses based on the expected credit losses from the expected cash flows from financial assets held by the bank, including guarantees and loan commitments.

The two prescriptions are likely to give different results. The Group has taken the view that where the IFRS 9 charge is less than the amount provided for in the Banking Regulations, the difference is recognised 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.         IMPAIRMENT LOSSES ON FINANCIAL ASSETS MEASURED AT AMORTISED COST 
   8.4       Suspended interest 

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.

   9.         EARNINGS PER SHARE 

Basic earnings per share is calculated by dividing the profit for the period attributable to ordinary equity holders of NMBZ Holdings Limited by the weighted average number of ordinary shares outstanding during the period.

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 
 
                                    Inflation adjusted              Historical Cost 
                                     30 June         30 June       30 June        30 June 
                              --------------  --------------  ------------  ------------- 
                                        2020            2019          2020           2019 
                              --------------  --------------  ------------  ------------- 
                                         ZWL             ZWL           ZWL            ZWL 
                              --------------  --------------  ------------  ------------- 
                                                    Restated 
                              --------------  --------------  ------------  ------------- 
                                                                 1 093 949 
 Profit for the period           689 241 755     690 023 433           562     57 438 969 
                              --------------  --------------  ------------  ------------- 
 Headline (losses)/earnings 
  for the period                 (5 178 881)     141 420 994     4 476 245     12 692 709 
                              --------------  --------------  ------------  ------------- 
 
   9.2       Number of shares 
 
                                               Inflation adjusted                          Historical Cost 
                                                30 June              30 June              30 June              30 June 
         -------------------------  -------------------  -------------------  -------------------  ------------------- 
                                                   2020                 2019                 2020                 2019 
         -------------------------  -------------------  -------------------  -------------------  ------------------- 
 9.2.1    Basic earnings per share 
         -------------------------  -------------------  -------------------  -------------------  ------------------- 
  Weighted average number 
   of ordinary shares for 
   basic and headline earnings 
   per share                                404 171 689          394 824 611          404 171 689          394 824 611 
 ---------------------------------  -------------------  -------------------  -------------------  ------------------- 
 
 9.2.2    Diluted earnings per share 
         ----------------------------------------------  -------------------  -------------------  ------------------- 
  Number of shares at 
   beginning of period                      404 171 689          392 955 196          404 171 689          392 955 196 
 ---------------------------------                       -------------------  -------------------  ------------------- 
          Effect of dilution: 
         -------------------------  -------------------  -------------------  -------------------  ------------------- 
  Weighted average number 
   of shares issued - scrip 
   dividend                                           -           11 216 493                    -           11 216 493 
 ---------------------------------  -------------------  -------------------  -------------------  ------------------- 
  Share options approved 
   but not granted                           23 942 639           23 942 639           23 942 639           23 942 639 
 ---------------------------------  -------------------  -------------------  -------------------  ------------------- 
                                      -----------------    -----------------    -----------------    ----------------- 
         -------------------------  -------------------  -------------------  -------------------  ------------------- 
                                            428 114 328          428 114 328          428 114 328          428 114 328 
                                             ==========           ==========           ==========           ========== 
         -------------------------  -------------------  -------------------  -------------------  ------------------- 
 
                                                    ZWL                  ZWL                  ZWL                  ZWL 
         -------------------------  -------------------  -------------------  -------------------  ------------------- 
 9.2.3    Headline (losses)/                                        Restated 
          earnings 
         -------------------------  -------------------  -------------------  -------------------  ------------------- 
                                                                                        1 093 949 
  Profit for the period                     689 241 755          690 023 433                  562           57 438 969 
 ---------------------------------  -------------------  -------------------  -------------------  ------------------- 
          Add/(deduct) non-recurring items 
         ----------------------------------------------  -------------------  -------------------  ------------------- 
  Trade investments fair 
   value gains                              (3 102 124)          (4 762 662)          (5 713 640)            (506 254) 
 ---------------------------------                       -------------------  -------------------  ------------------- 
 
  Unrealised foreign exchange                  (113 156             (247 818             (113 156 
   revaluation gains                               723)                 512)                 723)         (29 598 834) 
 ---------------------------------  -------------------  -------------------  -------------------  ------------------- 
 
  Fair value gains on                          (640 103             (380 064           (1 053 907 
   investment properties                           624)                 124)                 444)         (27 991 540) 
 ---------------------------------  -------------------  -------------------  -------------------  ------------------- 
                                             61 941 834           84 042 858           83 304 490           13 350 368 
  Tax thereon                         -----------------    -----------------    -----------------    ----------------- 
 ---------------------------------  -------------------  -------------------  -------------------  ------------------- 
  Headline (losses)/ earnings               (5 178 882)          141 420 993            4 476 245           12 692 709 
                                             ==========           ==========           ==========           ========== 
 ---------------------------------  -------------------  -------------------  -------------------  ------------------- 
 

This is calculated in accordance with the Statement of Investment Practice No. 1 issued by the former Institute of Investment Management and Research (now the Chartered Financial Analysts (CFA) Society of the UK).

   9.3       Earnings/(losses) per share (ZWL cents) 
 
                   Inflation adjusted          Historical Cost 
             30 June                30 June   30 June   30 June 
            --------  ---------------------  --------  -------- 
                2020                   2019      2020      2019 
            --------  ---------------------  --------  -------- 
                 ZWL                    ZWL       ZWL       ZWL 
            --------  ---------------------  --------  -------- 
                                   Restated 
            --------  ---------------------  --------  -------- 
 Basic        170.53                 174.77    270.66     14.55 
            --------  ---------------------  --------  -------- 
 Diluted      160.99                 161.18    255.53     13.42 
            --------  ---------------------  --------  -------- 
 Headline     (1.28)                  35.82      1.11      3.21 
            --------  ---------------------  --------  -------- 
 
   10.         SHARE CAPITAL 
 
 10.1                            30 June   31 December     30 June   31 December 
                                    2020          2019        2020          2019 
        --------------------  ----------  ------------  ----------  ------------ 
                                  Shares        Shares         ZWL           ZWL 
                                 million       million 
        --------------------  ----------  ------------  ----------  ------------ 
         Authorised 
        --------------------  ----------  ------------  ----------  ------------ 
  Ordinary shares of 
   ZWL0.00028 each                   600           600     168 000       168 000 
 ---------------------------  ----------  ------------  ----------  ------------ 
                               =========     =========   =========      ======== 
 ---------------------------  ----------  ------------  ----------  ------------ 
 
   10.2       Issued and fully paid 
 
                                                Inflation adjusted 
                                     30 June   31 December      30 June   31 December 
          -----------------  ---------------  ------------  -----------  ------------ 
                                        2020          2019         2020          2019 
          -----------------  ---------------  ------------  -----------  ------------ 
                              Shares million        Shares          ZWL           ZWL 
                                                   million 
          -----------------  ---------------  ------------  -----------  ------------ 
                                                                             Restated 
          -----------------  ---------------  ------------  -----------  ------------ 
 10.2.1    Ordinary shares 
          -----------------  ---------------  ------------  -----------  ------------ 
  Ordinary shares                        404           404    2 087 754     2 087 754 
 --------------------------  ---------------  ------------  -----------  ------------ 
                                  ==========    ==========   ==========    ========== 
 --------------------------  ---------------  ------------  -----------  ------------ 
 
 
                                         Historical Cost 
                            30 June   31 December      30 June   31 December 
 -----------------  ---------------  ------------  -----------  ------------ 
                               2020          2019         2020          2019 
 -----------------  ---------------  ------------  -----------  ------------ 
                     Shares million        Shares          ZWL           ZWL 
                                          million 
 -----------------  ---------------  ------------  -----------  ------------ 
                                                                    Restated 
 -----------------  ---------------  ------------  -----------  ------------ 
  Ordinary shares 
 -----------------  ---------------  ------------  -----------  ------------ 
  Ordinary shares               404           404       84 116        84 116 
 -----------------  ---------------  ------------  -----------  ------------ 
                         ==========    ==========   ==========    ========== 
 -----------------  ---------------  ------------  -----------  ------------ 
 
 
                                                       Historical Cost 
                                         30 June      31 December      30 June   31 December 
          ---------------------  ---------------  ---------------  -----------  ------------ 
                                            2020             2019         2020          2019 
          ---------------------  ---------------  ---------------  -----------  ------------ 
                                  Shares million   Shares million          ZWL           ZWL 
                                                                                    Restated 
          ---------------------  ---------------  ---------------  -----------  ------------ 
 10.2.2    Redeemable ordinary 
            shares 
          ---------------------  ---------------  ---------------  -----------  ------------ 
  Redeemable ordinary 
   shares                                    104              104       29 040        29 040 
 ------------------------------  ---------------  ---------------  -----------  ------------ 
                                      ==========       ==========   ==========    ========== 
 ------------------------------  ---------------  ---------------  -----------  ------------ 
 

No ordinary shares were issued during the six months ended 30 June 2020. Of the unissued ordinary shares of 196 million shares (2019 - 196 million), options which may be granted in terms of the 2012 ESOS amount to 23 942 639. No share options were exercised from the scheme as at 30 June 2020.

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 
 
                                 Inflation adjusted                       Historical Cost 
                                  30 June         31 December            30 June        31 December 
                       ------------------  ------------------  -----------------  ----------------- 
                                     2020                2019               2020               2019 
                       ------------------  ------------------  -----------------  ----------------- 
                                      ZWL                 ZWL                ZWL                ZWL 
                       ------------------  ------------------  -----------------  ----------------- 
                                                     Restated 
                       ------------------  ------------------  -----------------  ----------------- 
 Nominal value (note 
  10.2.2)                          29 040             472 586             29 040             29 040 
                       ------------------  ------------------  -----------------  ----------------- 
 Share premium                 14 306 213          37 084 571         14 306 213         14 306 213 
                       ------------------  ------------------  -----------------  ----------------- 
                        -----------------   -----------------   ----------------   ---------------- 
                               14 335 253          37 557 157         14 335 253         14 335 253 
                               ==========          ==========         ==========         ========== 
                       ------------------  ------------------  -----------------  ----------------- 
 

On 30 June 2013 the Company received USD14 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 USD4 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 ZWL100 million by 31 December 2020. FMO and Norfund combined together with Rabobank to form ARISE which is a development finance institution primarily focusing on investing in African financial institutions to support and enhance financial service delivery in Africa.

NMBZ Holdings Limited (NMBZ) entered into a share buy-back agreement with Norfund, FMO and AfricInvest, where these three strategic investors have a right at their own discretion at any time after the 5th anniversary (30 June 2018) but before the 9th 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 detailed in the share buy-back agreement. The 5th anniversary, which is the initial exercisable date of the share buy-back agreement was reached on 30 June 2018. 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 9th anniversary (30 June 2022) of the effective   date. 
   12.       SUBORDINATED TERM LOAN 
 
                                 Inflation adjusted                      Historical Cost 
                                  30 June        31 December            30 June        31 December 
                        -----------------  -----------------  -----------------  ----------------- 
                                     2020               2019               2020               2019 
                        -----------------  -----------------  -----------------  ----------------- 
                                      ZWL                ZWL                ZWL                ZWL 
                        -----------------  -----------------  -----------------  ----------------- 
                                                    Restated 
                        -----------------  -----------------  -----------------  ----------------- 
 At 1 January                  74 301 705         24 502 313         28 360 340          1 505 647 
                        -----------------  -----------------  -----------------  ----------------- 
                                  (48 512           ( 20 557 
 Monetary adjustment                 547)              643 )                  -                  - 
                        -----------------  -----------------  -----------------  ----------------- 
 Exchange revaluation          81 462 368         67 811 778         81 462 369         25 883 189 
                        -----------------  -----------------  -----------------  ----------------- 
 Interest capitalised           5 459 411          3 018 021          2 888 228          1 151 954 
                        -----------------  -----------------  -----------------  ----------------- 
 Interest paid                          -          (472 764)                  -          (180 450) 
                        -----------------  -----------------  -----------------  ----------------- 
                         ----------------   ----------------   ----------------   ---------------- 
                                  112 710         74 301 705            112 710         28 360 340 
                                      937         ==========                937          ========= 
                               ==========                            ========== 
                        -----------------  -----------------  -----------------  ----------------- 
 

In 2013, the Group received a subordinated term loan amounting to USD1.4 million from a Development Financial Institution which attracts an interest rate of LIBOR plus 10% and had 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 defaulted on a principal repayments with respect to this subordinated loan during the year ended six months ended 30 June 2020 as a result of the prevailing nostro funding challenges affecting the economy. However, there were no defaults on interest payments. There were no breaches to the financial covenants between the Group and the Development Financial Institution at the reporting date of 30 June 2020.

On 22 February 2019, the Reserve Bank of Zimbabwe (RBZ) issued an Exchange Control directive, RU 28 of 2019 which established an interbank foreign exchange market to formalise the buying and selling of foreign currency through the Banks and Bureaux de change. In order to establish an exchange rate between the current monetary balances and foreign currency, the Monetary Authorities denominated the existing RTGS balances in circulation, as RTGS dollars. The RBZ pegged the initial trades at US$/RTGS$1:2.5. In order to manage the transition, the RBZ also advised on the same date that all foreign liabilities or legacy debts due to suppliers and service providers, declared dividends e.t.c would be treated separately after registering such debts with the RBZ Exchange Control Department for an orderly expunging of these debts.

Consequently, the Group registered its legacy debts, which included the subordinated term loan and offshore lines of credit and transferred the ZWL equivalent of these debts at a rate of US$/ZWL1:1 to the RBZ in terms of the RBZ directive. As such, in terms of SI 33 of 2019 and the RBZ directive, these legacy debts and the related amounts transferred to the RBZ in terms of the RBZ directive on the legacy debts, have been translated using the interbank rate at reporting date. T he RBZ approved the legacy debt in respect of the subordinated term loan.

   13.       DepositS and other LIABILITIES 
   13.1     Deposits and other liabilities 
 
                                            Inflation adjusted                            Historical Cost 
                                             30 June           31 December               30 June           31 December 
                                --------------------  --------------------  --------------------  -------------------- 
                                                2020                  2019                  2020                  2019 
                                --------------------  --------------------  --------------------  -------------------- 
                                                 ZWL                   ZWL                   ZWL                   ZWL 
                                --------------------  --------------------  --------------------  -------------------- 
                                                                  Restated 
                                --------------------  --------------------  --------------------  -------------------- 
 
 Deposits from banks and other             1 506 340               809 586             1 506 340               309 012 
  financial institutions**                       051                   115                   051                   254 
                                --------------------  --------------------  --------------------  -------------------- 
 
                                           1 986 970             2 310 942             1 986 970 
  Current and deposit accounts                   637                   896                   637           882 067 591 
               from customers*     -----------------     -----------------     -----------------     ----------------- 
                                --------------------  --------------------  --------------------  -------------------- 
                                           3 493 310             3 120 529             3 493 310             1 191 079 
 Total deposits                                  688                   011                   688                   845 
                                --------------------  --------------------  --------------------  -------------------- 
 Trade and other payables*               156 619 034           201 906 886           156 619 034            77 066 171 
                                --------------------  --------------------  --------------------  -------------------- 
                                   -----------------     -----------------     -----------------     ----------------- 
                                           3 649 929             3 322 435             3 649 929             1 268 146 
                                                 722                   897                   722                   016 
                                          ==========            ==========            ==========            ========== 
                                --------------------  --------------------  --------------------  -------------------- 
 

* The carrying amounts of current and deposit accounts and trade and other payables approximate the related fair values due to their short term nature .

Included in trade and other payables are lease liabilities in respect of leased properties in which the Group is a lessee.

Also included in trade and other liabilities are ECL provisions in respect of guarantees and facilities approved but not drawn down.

** Included in deposits from banks and other financial institutions are loan balances of ZWL554 146 338, ZWL286 569 001 and ZWL528 854 064 due to Nederlandse Financierings-Maatschappij Voor Ontiwikkelingslanden (FMO), Swedfund and Afreximbank. The carrying amounts of deposits from other banks and other financial institutions approximate the related fair values. All the loan balances except for Afreximbank are part of the Group's legacy debts which were registered with the Reserve Bank of Zimbabwe (RBZ) for an orderly expunging of the debts. During the year ended 31 December 2019, the Group transferred the ZWL equivalent of the legacy debts at a rate of US$/ZWL1:1 to the RBZ as per requirement of the Exchange Control directive RU 28 of 2019. There were no breaches to the financial covenants. However, the Group defaulted on the principal repayments repayments on the FMO and Swedfund facilities during the period under review due to the nostro-funding challenges that were prevailing in the economy and the above mentioned lines of credit balances were transferred to the RBZ for an orderly expunging of the debts. The Bank has been communicating with the lenders regarding these developments.

The line of credit balances have been translated at 30 June 2020 at the closing rate of USD/ZWL1:63.74. Consequently, the amount transferred to the RBZ for the settlement of these debts has been translated at the same closing rate as it represents the Bank's right to the settlement of the related lines of credit. The RBZ approved the legacy debt in respect of the FMO and Swedfund lines of credit.

   13.2     Maturity analysis 
 
                                Inflation adjusted                        Historical Cost 
                                 30 June         31 December             30 June         31 December 
                      ------------------  ------------------  ------------------  ------------------ 
                                    2020                2019                2020                2019 
                      ------------------  ------------------  ------------------  ------------------ 
                                     ZWL                 ZWL                 ZWL                 ZWL 
                      ------------------  ------------------  ------------------  ------------------ 
                                                    Restated 
                      ------------------  ------------------  ------------------  ------------------ 
                               1 958 829           2 737 077           1 958 829           1 044 719 
 Less than 1 month                   014                 430                 014                 581 
                      ------------------  ------------------  ------------------  ------------------ 
                               1 092 347                               1 092 347 
 1 to 3 months                       571         132 384 950                 571          50 530 229 
                      ------------------  ------------------  ------------------  ------------------ 
 3 to 6 months               288 445 669          88 276 533         288 445 669          33 694 415 
                      ------------------  ------------------  ------------------  ------------------ 
 6 months to 1 year          153 496 604         115 092 629         153 496 604          43 929 895 
                      ------------------  ------------------  ------------------  ------------------ 
 1 to 5 years                     27 504          47 194 890              27 504          18 013 895 
                      ------------------  ------------------  ------------------  ------------------ 
 Over 5 years                    164 326             502 579             164 326             191 830 
                      ------------------  ------------------  ------------------  ------------------ 
                       -----------------   -----------------   -----------------   ----------------- 
                               3 493 310           3 120 529           3 493 310           1 191 079 
                                     688                 011                 688                 845 
                              ==========          ==========          ==========          ========== 
                      ------------------  ------------------  ------------------  ------------------ 
 
   13.3     Sectoral analysis of deposits 
 
                                      Inflation adjusted                                    Historical Cost 
                                30 June               31 December                   30 June               31 December 
                      -----------------  -----  -----------------  -----  -----------------  -----  -----------------  ----- 
                                   2020                      2019                      2020                      2019 
                      -----------------  -----  -----------------  -----  -----------------  -----  -----------------  ----- 
                                    ZWL      %                ZWL      %                ZWL      %                ZWL      % 
                      -----------------  -----  -----------------  -----  -----------------  -----  -----------------  ----- 
                                                         Restated 
                      -----------------  -----  -----------------  -----  -----------------  -----  -----------------  ----- 
 Agriculture                 42 707 032      1         66 495 341      2         42 707 032      1         25 380 716      2 
                      -----------------  -----  -----------------  -----  -----------------  -----  -----------------  ----- 
 Banks and other 
  financial                   1 506 340                                           1 506 340                   309 012 
  institutions                      051     43        809 586 115     26                051     43                254     26 
                      -----------------  -----  -----------------  -----  -----------------  -----  -----------------  ----- 
                                                                                                              119 294 
 Distribution               177 623 734      5        312 541 045     10        177 623 734      5                305     10 
                      -----------------  -----  -----------------  -----  -----------------  -----  -----------------  ----- 
                                                                                                              103 037 
 Individuals                279 975 306      8        269 948 734      9        279 975 306      8                176      9 
                      -----------------  -----  -----------------  -----  -----------------  -----  -----------------  ----- 
                                                                                                              164 249 
 Manufacturing              675 654 304     20        430 320 538     14        675 654 304     20                753     14 
                      -----------------  -----  -----------------  -----  -----------------  -----  -----------------  ----- 
 Mining companies            34 085 542      1         53 071 581      2         34 085 542      1         20 256 979      2 
                      -----------------  -----  -----------------  -----  -----------------  -----  -----------------  ----- 
 Municipalities 
  and parastatals            86 150 225      3        151 939 106      4         86 150 225      3         57 993 887      4 
                      -----------------  -----  -----------------  -----  -----------------  -----  -----------------  ----- 
                                                                                                              115 811 
 Other deposits             244 729 198      7        303 417 568     10        244 729 198      7                950     10 
                      -----------------  -----  -----------------  -----  -----------------  -----  -----------------  ----- 
                                                                                                              216 039 
 Services                   358 825 699     10        566 004 896     18        358 825 699     10                339     18 
                      -----------------  -----  -----------------  -----  -----------------  -----  -----------------  ----- 
 Transport and 
  telecommunications         87 219 597      2        157 204 087      5         87 219 597      2         60 003 485      5 
                      -----------------  -----  -----------------  -----  -----------------  -----  -----------------  ----- 
                      -----------------  -----  -----------------  -----  -----------------  -----  -----------------  ----- 
                       3 493 310          100    3 120 529          100    3 493 310          100    1 191 079          100 
                       688                ===    011                ===    688                ===    845                === 
                       ==========                ==========                ==========                ========== 
                      -----------------  -----  -----------------  -----  -----------------  -----  -----------------  ----- 
 
   14.       FINANCIAL INSTRUMENTS 
   14.1     Investment securities 
 
                                                             Inflation adjusted                      Historical Cost 
                                                              30 June        31 December            30 June        31 December 
                                             -----  -----------------  -----------------  -----------------  ----------------- 
                                              Note               2020               2019               2020               2019 
                                             -----  -----------------  -----------------  -----------------  ----------------- 
                                                                  ZWL                ZWL 
                                             -----  -----------------  -----------------  -----------------  ----------------- 
                                                                                Restated 
                                             -----  -----------------  -----------------  -----------------  ----------------- 
 Amortised cost                                               130 393            281 820            130 393            107 568 
  - Gross                                                         426                836                426                657 
                                             -----  -----------------  -----------------  -----------------  ----------------- 
 Impairment allowance                         16.3          (461 106)        (1 054 524)          (461 106)          (402 502) 
                                             -----  -----------------  -----------------  -----------------  ----------------- 
 - ECL at 1 January                                       (1 054 524)        (7 231 829)          (402 502)          (444 390) 
                                             -----  -----------------  -----------------  -----------------  ----------------- 
 - Monetary adjustment                                        652 022          6 287 048                  -                  - 
                                             -----  -----------------  -----------------  -----------------  ----------------- 
 
   *    ECL charged through profit and loss                  (58 604)          (109 743)           (58 604)             41 888 
                                             -----  -----------------  -----------------  -----------------  ----------------- 
                                                     ----------------   ----------------   ----------------   ---------------- 
                                                              129 932            280 766            129 932            107 166 
                                                                  320                312                320                155 
                                                            =========          =========          =========          ========= 
                                                    -----------------  -----------------  -----------------  ----------------- 
 

The Group holds Treasury Bills and Government Bonds totaling ZWL130 393 426 with interest rates ranging from 2% to 18%. The Treasury Bills are measured at amortised cost in line with the Bank's business model to collect contractual cashflows and the contractual terms are such that the financial assets give rise to cashflows that are solely payments of principal and interest. Of the total Treasury Bills balance of ZWL130 393 426, a total of ZWL114 179 886 had been pledged as security against interbank borrowings at 30 June 2020.

   14.2      Maturity analysis of investment securities measured at amortised cost 
 
                                  Inflation adjusted                      Historical Cost 
                                   30 June        31 December            30 June        31 December 
                        ------------------  -----------------  -----------------  ----------------- 
                                      2020               2019               2020               2019 
                        ------------------  -----------------  -----------------  ----------------- 
                                       ZWL                ZWL                ZWL                ZWL 
                        ------------------  -----------------  -----------------  ----------------- 
                                                     Restated 
                        ------------------  -----------------  -----------------  ----------------- 
 Less than 1 month               2 528 129          6 549 790          2 528 129          2 500 000 
                        ------------------  -----------------  -----------------  ----------------- 
 1 to 3 months                  17 774 132         16 741 459         17 774 132          6 390 075 
                        ------------------  -----------------  -----------------  ----------------- 
 3 to 6 months                  35 200 000         49 778 402         35 200 000         19 000 000 
                        ------------------  -----------------  -----------------  ----------------- 
                                                      143 538 
 6 months to 1 year             50 360 440                425         50 360 440         54 787 417 
                        ------------------  -----------------  -----------------  ----------------- 
 1 to 5 years                   13 148 494         35 392 271         13 148 494         13 508 934 
                        ------------------  -----------------  -----------------  ----------------- 
                                11 382 231         29 820 489         11 382 231         11 382 231 
 Over 5 years             ----------------    ---------------    ---------------    --------------- 
                        ------------------  -----------------  -----------------  ----------------- 
                                   130 393            281 820            130 393            107 568 
                                       426                836                426                657 
                        ------------------  -----------------  -----------------  ----------------- 
 Expected Credit loss 
  allowance                      (461 106)        (1 054 524)          (461 106)          (402 502) 
                        ------------------  -----------------  -----------------  ----------------- 
                          ----------------    ---------------    ---------------    --------------- 
                                   129 932            280 766            129 932            107 166 
                                       320                312                320                155 
                                ==========         ==========         ==========         ========== 
                        ------------------  -----------------  -----------------  ----------------- 
 
   14.3     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.

   14.3.1   Financial instruments measured at fair value - fair value hierarchy 
 
                                                          Inflation adjusted 
                                         30 June 
                               -----------------  ----------------  -----------------  ---------------- 
                                            2020           Level 1            Level 2           Level 3 
                               -----------------  ----------------  -----------------  ---------------- 
                                             ZWL               ZWL                ZWL               ZWL 
                               -----------------  ----------------  -----------------  ---------------- 
 Trade and other investments           7 325 771                 -                  -         7 325 771 
                               -----------------  ----------------  -----------------  ---------------- 
                                ----------------   ---------------   ----------------   --------------- 
                                       7 325 771                 -                  -         7 325 771 
                                       =========         =========          =========         ========= 
                               -----------------  ----------------  -----------------  ---------------- 
 
                                          31 Dec 
                               -----------------  ----------------  -----------------  ---------------- 
                                            2019           Level 1            Level 2           Level 3 
                               -----------------  ----------------  -----------------  ---------------- 
                                             ZWL               ZWL                ZWL               ZWL 
                               -----------------  ----------------  -----------------  ---------------- 
                                        Restated 
                               -----------------  ----------------  -----------------  ---------------- 
 Trade and other investments           4 223 647                 -                  -         4 223 647 
                               -----------------  ----------------  -----------------  ---------------- 
                                ----------------   ---------------   ----------------   --------------- 
                                       4 223 647                 -                  -         4 223 647 
                                       =========         =========          =========         ========= 
                               -----------------  ----------------  -----------------  ---------------- 
 

During the reporting period ended 30 June 2020 and 31 December 2019, 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.

   14.3.1   Financial instruments measured at fair value - fair value hierarchy 
 
                                                            Historical Cost 
                                        30 June 
                               ----------------  -----------------  -----------------  ---------------- 
                                           2020            Level 1            Level 2           Level 3 
                               ----------------  -----------------  -----------------  ---------------- 
                                            ZWL                ZWL                ZWL               ZWL 
                               ----------------  -----------------  -----------------  ---------------- 
 Trade and other investments          7 325 771                  -                  -         7 325 771 
                               ----------------  -----------------  -----------------  ---------------- 
                                ---------------   ----------------   ----------------   --------------- 
                                      7 325 771                  -                  -         7 325 771 
                                      =========          =========          =========         ========= 
                               ----------------  -----------------  -----------------  ---------------- 
 
                                         31 Dec 
                               ----------------  -----------------  -----------------  ---------------- 
                                           2019            Level 1            Level 2           Level 3 
                               ----------------  -----------------  -----------------  ---------------- 
                                            ZWL                ZWL                ZWL               ZWL 
                               ----------------  -----------------  -----------------  ---------------- 
 Trade and other investments          1 612 131                  -                  -         1 612 131 
                               ----------------  -----------------  -----------------  ---------------- 
                                ---------------   ----------------   ----------------   --------------- 
                                      1 612 131                  -                  -         1 612 131 
                                      =========          =========          =========         ========= 
                               ----------------  -----------------  -----------------  ---------------- 
 

Level 3 fair value measurements

Reconciliation of trade and other investments

 
                                  Inflation adjusted                        Historical Cost 
                                   30 June         31 December             30 June         31 December 
                        ------------------  ------------------  ------------------  ------------------ 
                                      2020                2019                2020                2019 
                        ------------------  ------------------  ------------------  ------------------ 
                                       ZWL                 ZWL                 ZWL                 ZWL 
                        ------------------  ------------------  ------------------  ------------------ 
                                                      Restated 
                        ------------------  ------------------  ------------------  ------------------ 
 Balance at 1 January            4 223 647           1 830 794           1 612 131             112 501 
                        ------------------  ------------------  ------------------  ------------------ 
 Gain recognised in 
  profit or loss                 3 102 124           2 392 853           5 713 640           1 499 630 
                        ------------------  ------------------  ------------------  ------------------ 
                         -----------------   -----------------   -----------------   ----------------- 
                                 7 325 771           4 223 647           7 325 771           1 612 131 
                                ==========          ==========          ==========          ========== 
                        ------------------  ------------------  ------------------  ------------------ 
 
   14.3.2   Financial instruments not measured at fair value 

Below is a list of the Group's financial investments not measured at fair value, but whose carrying amounts approximate fair value.

 
                                       Inflation adjusted                        Historical Cost 
                                        30 June         31 December             30 June         31 December 
                             ------------------  ------------------  ------------------  ------------------ 
                                           2020                2019                2020                2019 
                             ------------------  ------------------  ------------------  ------------------ 
                                            ZWL                 ZWL                 ZWL                 ZWL 
                             ------------------  ------------------  ------------------  ------------------ 
                                                           Restated 
                             ------------------  ------------------  ------------------  ------------------ 
 Assets 
                             ------------------  ------------------  ------------------  ------------------ 
                                      1 369 056           1 289 795           1 369 056             492 304 
 Cash and cash equivalents                  048                 771                 048                 267 
                             ------------------  ------------------  ------------------  ------------------ 
 
 Loans, advances and                  2 526 003           2 233 628           2 436 533             817 960 
  other accounts                            092                 818                 439                 242 
                             ------------------  ------------------  ------------------  ------------------ 
                                        129 932                                 129 932             107 166 
 Investment securities                      320         280 766 312                 320                 155 
                             ------------------  ------------------  ------------------  ------------------ 
                              -----------------   -----------------   -----------------   ----------------- 
   Total                              4 024 991           3 804 190           3 935 521           1 417 430 
                                            460                 901                 807                 664 
                                     ==========          ==========          ==========          ========== 
                             ------------------  ------------------  ------------------  ------------------ 
 
 Liabilities 
                             ------------------  ------------------  ------------------  ------------------ 
 Deposits and other                   3 649 929           3 322 435           3 649 929           1 268 146 
  liabilities                               722                 897                 722                 016 
                             ------------------  ------------------  ------------------  ------------------ 
                              -----------------   -----------------   -----------------   ----------------- 
                                      3 649 929           3 322 435           3 649 929           1 268 146 
                                            722                 897                 722                 016 
                                     ==========          ==========          ==========          ========== 
                             ------------------  ------------------  ------------------  ------------------ 
 
   15.       CASH AND CASH EQUIVALENTS 
 
                                        Inflation adjusted                        Historical Cost 
                                         30 June          31 December             30 June        31 December 
                             -------------------  -------------------  ------------------  ----------------- 
                                            2020                 2019                2020               2019 
                             -------------------  -------------------  ------------------  ----------------- 
                                             ZWL                  ZWL                 ZWL                ZWL 
                             -------------------  -------------------  ------------------  ----------------- 
                                                             Restated 
                             -------------------  -------------------  ------------------  ----------------- 
 Balances with the Central                                                                           267 032 
  Bank                               616 622 760          699 603 351         616 622 760                753 
                             -------------------  -------------------  ------------------  ----------------- 
 
 Current, nostro accounts*                                                                           160 209 
  and cash                           677 935 252          419 736 453         677 935 252                897 
                             -------------------  -------------------  ------------------  ----------------- 
 Interbank placements                 75 000 000          171 604 491          75 000 000         65 500 000 
                             -------------------  -------------------  ------------------  ----------------- 
 Expected Credit loss 
  allowance                            (501 964)          (1 148 524)           (501 964)          (438 383) 
                             -------------------  -------------------  ------------------  ----------------- 
                              ------------------   ------------------   -----------------   ---------------- 
                                       1 369 056            1 289 795           1 369 056            492 304 
                                  048 ==========                  771      048 ==========                267 
                                                           ==========                              ========= 
                             -------------------  -------------------  ------------------  ----------------- 
 

*Nostro accounts are foreign domiciled bank accounts operated by the Bank for the facilitation of offshore transactions on behalf of clients.

Balances with the Central Bank, other banks and cash are used to facilitate customer transactions which include payments and cash withdrawals.

   16.       LOANS, ADVANCES AND OTHER ASSETS 
   16. 1    Total loans, advances and other assets 
 
                                 Inflation adjusted                        Historical Cost 
                                  30 June         31 December             30 June         31 December 
                      -------------------  ------------------  ------------------  ------------------ 
                                     2020                2019                2020                2019 
                      -------------------  ------------------  ------------------  ------------------ 
                                      ZWL                 ZWL                 ZWL                 ZWL 
                      -------------------  ------------------  ------------------  ------------------ 
                                                     Restated 
                      -------------------  ------------------  ------------------  ------------------ 
 Fixed term loans - 
  Corporate                   979 815 593         675 373 875         979 815 593         264 688 911 
                      -------------------  ------------------  ------------------  ------------------ 
 Fixed term loans - 
  Retail                      176 287 662         248 295 838         176 287 662          94 772 446 
                      -------------------  ------------------  ------------------  ------------------ 
 Mortgages                     65 729 823         153 495 347          65 729 823          58 587 891 
                      -------------------  ------------------  ------------------  ------------------ 
 Overdrafts                   162 018 744         273 795 109         162 018 744          97 600 959 
                      -------------------  ------------------  ------------------  ------------------ 
                        -----------------   -----------------   -----------------   ----------------- 
                                1 383 851           1 350 960           1 383 851             515 650 
                                      822                 169                 822                 207 
                      -------------------  ------------------  ------------------  ------------------ 
                                1 142 151                               1 052 681 
 Other assets                         270         882 668 649                 617         302 310 035 
                      -------------------  ------------------  ------------------  ------------------ 
                       ------------------    ----------------    ----------------    ---------------- 
                                2 526 003           2 233 628           2 436 533         817 960 242 
                                      092                 818                 439          ========== 
                              ===========          ==========          ========== 
                      -------------------  ------------------  ------------------  ------------------ 
 
   16.1.2    Maturity analysis 
 
                                            Inflation adjusted                            Historical Cost 
                                             30 June            31 December                30 June         31 December 
                              ----------------------  ---------------------  ---------------------  ------------------ 
                                                2020                   2019                   2020                2019 
                              ----------------------  ---------------------  ---------------------  ------------------ 
                                                 ZWL                    ZWL                    ZWL                 ZWL 
                              ----------------------  ---------------------  ---------------------  ------------------ 
                                                                   Restated 
                              ----------------------  ---------------------  ---------------------  ------------------ 
                                                                                                               138 436 
 Less than 1 month                       264 429 315            362 691 051            264 429 315                 142 
                              ----------------------  ---------------------  ---------------------  ------------------ 
 1 to 3 months                           215 702 983            168 078 148            215 702 983          64 154 025 
                              ----------------------  ---------------------  ---------------------  ------------------ 
 3 to 6 months                            89 164 354             56 693 764             89 164 354          21 639 536 
                              ----------------------  ---------------------  ---------------------  ------------------ 
                                                                                                               105 500 
 6 months to 1 year                      296 429 046            276 403 465            296 429 046                 893 
                              ----------------------  ---------------------  ---------------------  ------------------ 
                                                                                                               153 679 
 1 to 5 years                            481 854 751            402 628 472            481 854 751                 923 
                              ----------------------  ---------------------  ---------------------  ------------------ 
                                          91 652 893            130 209 217             91 652 893          49 699 770 
 Over 5 years                      -----------------       ----------------      -----------------    ---------------- 
                              ----------------------  ---------------------  ---------------------  ------------------ 
                                           1 439 233              1 396 704              1 439 233             533 110 
 Total advances                                  342                    117                    342                 289 
                              ----------------------  ---------------------  ---------------------  ------------------ 
 Allowances for impairment 
  losses on loans and                                                                                          (17 115 
  advance                               (54 947 636)           (44 840 761)           (54 947 636)                341) 
                              ----------------------  ---------------------  ---------------------  ------------------ 
 
 Impairment loss allowance                                         (216 450                                    (13 300 
  at 1 January                          (44 840 761)                   141)           (17 115 341)                688) 
                              ----------------------  ---------------------  ---------------------  ------------------ 
 Monetary adjustment                      27 725 420            181 603 455                      -                   - 
                              ----------------------  ---------------------  ---------------------  ------------------ 
 ECL charge through profit 
  or loss                               (30 773 577)           (12 915 183)           (30 773 577)         (4 929 615) 
                              ----------------------  ---------------------  ---------------------  ------------------ 
 Revaluation exchange 
  loss movement through 
  profit or loss                         (7 058 718)                      -            (7 058 718)                   - 
                              ----------------------  ---------------------  ---------------------  ------------------ 
 Bad debts written off                             -              2 921 108                      -           1 114 962 
                              ----------------------  ---------------------  ---------------------  ------------------ 
 Suspended interest on 
  credit impaired financial                (433 884)              (903 187)              (433 884)           (344 741) 
  assets                         -------------------     ------------------     ------------------     --------------- 
                              ----------------------  ---------------------  ---------------------  ------------------ 
                                           1 383 851              1 350 960              1 383 851             515 650 
                                                 822                    169                    822                 207 
                              ----------------------  ---------------------  ---------------------  ------------------ 
                                           1 142 151                                     1 052 681             302 310 
 Other assets*                                   270            882 668 649                    617                 035 
                              ----------------------  ---------------------  ---------------------  ------------------ 
                                  ------------------     ------------------     ------------------    ---------------- 
                                           2 526 003              2 233 628              2 436 533             817 960 
                                                 092                    818                    439                 242 
                                          ==========             ==========             ==========          ========== 
                              ----------------------  ---------------------  ---------------------  ------------------ 
 

*Included in other assets is an amount of ZWL904 685 146 pledged with the RBZ for the facilitation of legacy debts settlement in terms of Regulatory directives.

   16.2      Sectoral analysis of utilisations 
 
                                  Inflation adjusted                                   Historical Cost 
                            30 June               31 December                   30 June             31 December 
                  -----------------  -----  -----------------  -----  -----------------  -----  ---------------  ----- 
                               2020                      2019                      2020                    2019 
                  -----------------  -----  -----------------  -----  -----------------  -----  ---------------  ----- 
                                ZWL      %                ZWL      %                ZWL      %              ZWL      % 
                  -----------------  -----  -----------------  -----  -----------------  -----  ---------------  ----- 
                                                     Restated 
                  -----------------  -----  -----------------  -----  -----------------  -----  ---------------  ----- 
 Agriculture 
  and                       457 721                   253 524                   457 721 
  horticulture                  761     32                002     18                761     32       96 767 992     18 
                  -----------------  -----  -----------------  -----  -----------------  -----  ---------------  ----- 
 Conglomerates           43 824 781      3          6 280 981      -         43 824 781      3        2 397 398      - 
                  -----------------  -----  -----------------  -----  -----------------  -----  ---------------  ----- 
                                                      336 962 
 Distribution            96 804 587      7                856     16         96 804 587      7       87 785 991     16 
                  -----------------  -----  -----------------  -----  -----------------  -----  ---------------  ----- 
 Food & 
  beverages              84 902 259      6          3 031 557      6         84 902 259      6       29 457 868      6 
                  -----------------  -----  -----------------  -----  -----------------  -----  ---------------  ----- 
                            212 110                                             212 110                 126 212 
 Individuals                    136     14         77 177 136     24                136     14              109     24 
                  -----------------  -----  -----------------  -----  -----------------  -----  ---------------  ----- 
                            285 628                   330 665                   285 628 
 Manufacturing                  556     20                109     11                556     20       60 715 905     11 
                  -----------------  -----  -----------------  -----  -----------------  -----  ---------------  ----- 
                                                      159 070 
 Mining                   1 216 358      -                563      -          1 216 358      -        1 157 120      - 
                  -----------------  -----  -----------------  -----  -----------------  -----  ---------------  ----- 
                            257 024                   229 991                   257 024                 128 615 
 Services                       904     18                913     24                904     18              906     24 
                  -----------------  -----  -----------------  -----  -----------------  -----  ---------------  ----- 
                  -----------------  -----  -----------------  -----  -----------------  -----  ---------------  ----- 
                          1 439 233    100          1 396 704    100          1 439 233    100          533 110    100 
                                342    ===                117    ===                342    ===              289    === 
                         ==========                ==========                ==========              ========== 
                  -----------------  -----  -----------------  -----  -----------------  -----  ---------------  ----- 
 

The material concentration of loans and advances are to the agriculture and horticulture sector at 32% (2019 - 18%) and the manufacturing sector at 20% (2019 - 11%).

   16.3     Impairment analysis of financial instruments measured at amortised cost 
 
                                                                                              Inflation adjusted 
                                                                            Stage 1            Stage 2            Stage 3                Total 
                                                               --------------------  -----------------  -----------------  ------------------- 
 Gross carrying amount at                                                 2 335 203                                                  2 385 012 
  1 January 2020                                                                247         30 731 236         19 077 740                  224 
                                                               --------------------  -----------------  -----------------  ------------------- 
                                                                         (1 443 875            (19 001            (11 795           (1 474 672 
 Monetary adjustment                                                           683)               380)               926)                 990) 
                                                               --------------------  -----------------  -----------------  ------------------- 
 Transfers 
                                                               --------------------  -----------------  -----------------  ------------------- 
                                                                                               (12 365 
                                                                        (9 686 339)               456)          2 679 117 
                                                               --------------------  -----------------  -----------------  ------------------- 
                                                                                               (14 245 
     - to 12 months to ECL                                               14 328 649               187)           (83 462)                    - 
                                                               --------------------  -----------------  -----------------  ------------------- 
     - to lifetime ECL not credit 
      impaired                                                          (2 555 722)          2 586 076           (30 355)                    - 
                                                               --------------------  -----------------  -----------------  ------------------- 
     - to lifetime ECL credit 
      impaired                                                          (2 086 589)          (706 345)          2 792 934                    - 
                                                               --------------------  -----------------  -----------------  ------------------- 
 
 Net movement in financial 
  assets                                                                924 429 576          4 027 517          1 723 084          930 180 176 
                                                               --------------------  -----------------  -----------------  ------------------- 
                                                                 ------------------   ----------------   ----------------   ------------------ 
   Balance as at 30 June 2020                                             1 825 443          3 391 917         11 684 015            1 840 519 
                                                                                479          =========          =========                  410 
                                                                        ===========                                                =========== 
                                                               --------------------  -----------------  -----------------  ------------------- 
 Loss allowance analysis 
                                                               --------------------  -----------------  -----------------  ------------------- 
 At 1 January 2020                                                       20 058 931            819 694          3 981 948           24 860 573 
                                                               --------------------  -----------------  -----------------  ------------------- 
 - ECL - Loans, advances 
  & guarantees                                                           12 313 699            819 694          3 981 948           17 115 341 
                                                               --------------------  -----------------  -----------------  ------------------- 
 
       *    Guarantees and facilities approved not drawn down             6 904 347                  -                  -            6 904 347 
                                                               --------------------  -----------------  -----------------  ------------------- 
     - ECL - Investment securities                                          402 502                  -                  -              402 502 
                                                               --------------------  -----------------  -----------------  ------------------- 
     - ECL - Interbank placements                                           438 383                  -                  -              438 383 
                                                               --------------------  -----------------  -----------------  ------------------- 
 
 Transfers                                                                  180 924          (595 864)            414 940                    - 
                                                               --------------------  -----------------  -----------------  ------------------- 
     - to 12 month ECL                                                      622 516          (618 132)            (4 384)                    - 
                                                               --------------------  -----------------  -----------------  ------------------- 
     - to lifetime ECL not credit 
      impaired                                                            (142 230)            143 913            (1 683)                    - 
                                                               --------------------  -----------------  -----------------  ------------------- 
     - to lifetime ECL credit 
      impaired                                                            (299 362)          (121 645)            421 007                    - 
                                                               --------------------  -----------------  -----------------  ------------------- 
 
 Net increase/(decrease) 
  in ECL                                                                 24 174 740            587 710            457 512           25 219 962 
                                                               --------------------  -----------------  -----------------  ------------------- 
 Loans and advances                                                      29 728 355            587 710            457 512           30 773 577 
                                                               --------------------  -----------------  -----------------  ------------------- 
 Guarantees and facilities 
  approved not drawn down                                               (5 675 801)                  -                  -          (5 675 801) 
                                                               --------------------  -----------------  -----------------  ------------------- 
 Investment securities                                                       58 605                  -                  -               58 605 
                                                               --------------------  -----------------  -----------------  ------------------- 
 Interbank placements                                                        63 581                  -                  -               63 581 
                                                               --------------------  -----------------  -----------------  ------------------- 
 Revaluation exchange losses 
  on loans and advances ECL                                               7 058 718                  -                  -            7 058 718 
                                                               --------------------  -----------------  -----------------  ------------------- 
                                                                   ----------------   ----------------   ----------------     ---------------- 
   Balance as at 30 June 2020                                            51 473 313            811 540          4 854 400           57 139 253 
                                                                          =========          =========         ==========            ========= 
                                                               --------------------  -----------------  -----------------  ------------------- 
 
 Loans and advances                                                      49 281 696            811 540          4 854 400           54 947 636 
                                                               --------------------  -----------------  -----------------  ------------------- 
 Guarantees and facilities 
  approved not drawn down                                                 1 228 547                  -                  -            1 228 547 
                                                               --------------------  -----------------  -----------------  ------------------- 
 Investment securities                                                      461 106                  -                  -              461 106 
                                                               --------------------  -----------------  -----------------  ------------------- 
 Interbank placements                                                       501 964                  -                  -              501 964 
                                                               --------------------  -----------------  -----------------  ------------------- 
                                                                   ----------------   ----------------   ----------------     ---------------- 
                                                                         51 473 313            811 540          4 854 400           57 139 253 
                                                                          =========          =========          =========            ========= 
                                                               --------------------  -----------------  -----------------  ------------------- 
 
   16.3     Impairment analysis of financial instruments measured at amortised cost 
 
                                                                   Inflation adjusted 
                                                 Stage 1            Stage 2            Stage 3                Total 
                                     -------------------  -----------------  -----------------  ------------------- 
 Gross carrying amount at                      6 058 045            408 759            317 002            6 783 806 
  1 January 2019                                     168                319                492                  979 
                                     -------------------  -----------------  -----------------  ------------------- 
                                              (5 056 550           (369 151           (265 967           (5 691 670 
 Monetary adjustment                                775)               603)               709)                 087) 
                                     -------------------  -----------------  -----------------  ------------------- 
 Transfers 
                                     -------------------  -----------------  -----------------  ------------------- 
                                                                     29 279             (3 468 
                                            (25 810 961)                540               581) 
                                     -------------------  -----------------  -----------------  ------------------- 
     - to 12 months to ECL                     3 518 133        (3 228 025)          (290 109)                    - 
                                     -------------------  -----------------  -----------------  ------------------- 
     - to lifetime ECL not credit 
      impaired                              (27 073 980)         33 631 682        (6 557 702)                    - 
                                     -------------------  -----------------  -----------------  ------------------- 
     - to lifetime ECL credit 
      impaired                               (2 255 114)        (1 124 117)          3 379 230                    - 
                                     -------------------  -----------------  -----------------  ------------------- 
 
 Net movement in financial 
  assets                                     518 917 352         14 563 834         10 873 808          544 354 994 
                                     -------------------  -----------------  -----------------  ------------------- 
                                      ------------------   ----------------   ----------------   ------------------ 
   Balance as at 31 December                   1 494 600         83 451 090         58 440 010            1 636 491 
   2019                                              784          =========          =========                  884 
                                             ===========                                                =========== 
                                     -------------------  -----------------  -----------------  ------------------- 
 
 Loss allowance analysis 
                                     -------------------  -----------------  -----------------  ------------------- 
 At 1 January 2019                            20 302 891          2 235 763         13 647 640           36 186 294 
                                     -------------------  -----------------  -----------------  ------------------- 
 - ECL - Loans, advances 
  & guarantees                                18 963 283          2 235 763         13 647 640           34 846 686 
                                     -------------------  -----------------  -----------------  ------------------- 
     - ECL - Investment securities             1 164 264                  -                  -            1 164 264 
                                     -------------------  -----------------  -----------------  ------------------- 
     - ECL - Interbank placements                175 344                  -                  -              175 344 
                                     -------------------  -----------------  -----------------  ------------------- 
 
 Transfers                                   (2 267 029)          2 295 772           (28 743)                    - 
                                     -------------------  -----------------  -----------------  ------------------- 
     - to 12 month ECL                            92 040           (85 797)            (6 243)                    - 
                                     -------------------  -----------------  -----------------  ------------------- 
     - to lifetime ECL not credit 
      impaired                               (1 775 514)          2 682 969          (907 455)                    - 
                                     -------------------  -----------------  -----------------  ------------------- 
     - to lifetime ECL credit 
      impaired                                 (583 555)          (301 400)            884 955                    - 
                                     -------------------  -----------------  -----------------  ------------------- 
 
 Net increase/(decrease)                                             (2 384             (3 186 
  in ECL                                      34 516 855               006)               533)           28 946 316 
                                     -------------------  -----------------  -----------------  ------------------- 
 Loans and advances                           15 564 615        (2 384 006)          (265 426)           12 915 183 
                                     -------------------  -----------------  -----------------  ------------------- 
 Guarantees and facilities 
  approved not drawn down                     18 088 802                  -                  -           18 088 802 
                                     -------------------  -----------------  -----------------  ------------------- 
 Investment securities                         (109 743)                  -                  -            (109 743) 
                                     -------------------  -----------------  -----------------  ------------------- 
 Interbank placements                            973 181                  -                  -              973 181 
                                     -------------------  -----------------  -----------------  ------------------- 
 Bad debts written off                                 -                  -        (2 921 108)          (2 921 108) 
                                     -------------------  -----------------  -----------------  ------------------- 
                                        ----------------    ---------------   ----------------     ---------------- 
   Balance as at 31 December                  52 552 717          2 147 529             10 432           65 132 610 
   2019                                        =========          =========                364            ========= 
                                                                                     ========= 
                                     -------------------  -----------------  -----------------  ------------------- 
 
 Loans and advances                           32 260 863          2 147 529         10 432 369           44 840 761 
                                     -------------------  -----------------  -----------------  ------------------- 
 Guarantees and facilities 
  approved not drawn down                     18 088 801                  -                  -           18 088 801 
                                     -------------------  -----------------  -----------------  ------------------- 
 Investment securities                         1 054 524                  -                  -            1 054 524 
                                     -------------------  -----------------  -----------------  ------------------- 
 Interbank placements                          1 148 524                  -                  -            1 148 524 
                                     -------------------  -----------------  -----------------  ------------------- 
                                        ----------------   ----------------   ----------------     ---------------- 
                                              52 552 712          2 147 529             10 432           65 132 610 
                                               =========          =========                369            ========= 
                                                                                     ========= 
                                     -------------------  -----------------  -----------------  ------------------- 
 
   16.4     Credit-impaired financial assets 
 
                                                 Inflation adjusted                    Historical Cost 
                                                  30 June       31 December           30 June       31 December 
                                         ----------------  ----------------  ----------------  ---------------- 
                                                     2020              2019              2020              2019 
                                         ----------------  ----------------  ----------------  ---------------- 
                                                      ZWL               ZWL               ZWL               ZWL 
                                         ----------------  ----------------  ----------------  ---------------- 
                                                                   Restated 
                                         ----------------  ----------------  ----------------  ---------------- 
 Total credit impaired financial 
  assets                                       11 684 015        19 077 740        11 684 015         7 281 814 
                                         ----------------  ----------------  ----------------  ---------------- 
 Expected credit losses 
  on credit impaired financial                                      (10 432 
  assets                                      (4 854 400)              369)       (4 854 400)       (3 981 948) 
                                         ----------------  ----------------  ----------------  ---------------- 
 Retail loans insurance                         (499 057)       (1 307 487)         (499 057)         (499 057) 
                                         ----------------  ----------------  ----------------  ---------------- 
 Suspended interest on credit-impaired 
  financial assets                              (433 884)         (903 187)         (433 884)         (344 739) 
                                         ----------------  ----------------  ----------------  ---------------- 
                                          ---------------   ---------------   ---------------   --------------- 
   Net credit impaired financial                5 896 674         6 434 697         5 896 674         2 456 070 
   assets                                       =========        ==========         =========         ========= 
                                         ----------------  ----------------  ----------------  ---------------- 
 

The net credit-impaired financial assets of these accounts represent recoverable portions covered by realisable security, which includes guarantees, cession of debtors, mortgages over properties, equities and promissory notes all fair valued at ZWL4 131 650 (2019 - ZWL8 335 250).

   16.5     Loans to related parties (included under loans, advances and other assets) 
 
                                   Inflation adjusted                          Historical Cost 
                                    30 June          31 December              30 June          31 December 
                        -------------------  -------------------  -------------------  ------------------- 
                                       2020                 2019                 2020                 2019 
                        -------------------  -------------------  -------------------  ------------------- 
                                        ZWL                  ZWL                  ZWL                  ZWL 
                        -------------------  -------------------  -------------------  ------------------- 
                                                        Restated 
                        -------------------  -------------------  -------------------  ------------------- 
 Executive directors              1 177 733            1 954 913            1 177 733              746 174 
                        -------------------  -------------------  -------------------  ------------------- 
 Officers                        46 165 070           70 598 522           46 165 070           26 946 866 
                        -------------------  -------------------  -------------------  ------------------- 
 Officers' companies                      -                    -                    -                    - 
                          -----------------    -----------------    -----------------    ----------------- 
                        -------------------  -------------------  -------------------  ------------------- 
                                 47 342 803           72 553 435           47 342 803           27 693 040 
                        -------------------  -------------------  -------------------  ------------------- 
 ECL on staff loans - 
  Stage 1                       (1 834 371)            (127 721)          (1 834 371)             (48 750) 
                        -------------------  -------------------  -------------------  ------------------- 
                          -----------------   ------------------   ------------------   ----------------27 
                                 45 508 432           72 425 714           45 508 432              644 290 
                                 ==========           ==========           ==========            ========= 
                        -------------------  -------------------  -------------------  ------------------- 
 
   17.       INTANGIBLE ASSETS 
 
                                            Inflation adjusted 
                                              Computer 
                                              Software             Total 
                                   -------------------  ---------------- 
                                                   ZWL               ZWL 
                                   -------------------  ---------------- 
 Cost 
                                   -------------------  ---------------- 
 Balance at 1 January 2019                 123 362 720       123 362 720 
                                   -------------------  ---------------- 
                                             1 668 628         1 668 628 
 Capitalisation acquisitions         -----------------    -------------- 
                                   -------------------  ---------------- 
 Balance at 31 December 2019               125 031 348       125 031 348 
                                   -------------------  ---------------- 
 Acquisitions                                3 207 838         3 207 838 
                                   -------------------  ---------------- 
                                      ----------------    -------------- 
   Balance at 30 June 2020                     128 239       128 239 186 
                                                   186          ======== 
                                             ========= 
                                   -------------------  ---------------- 
 Accumulated amortisation 
                                   -------------------  ---------------- 
 Balance at 1 January 2019                  77 951 380        77 951 380 
                                   -------------------  ---------------- 
                                            16 652 838        16 652 838 
 Amortisation for the year            ----------------    -------------- 
                                   -------------------  ---------------- 
 Balance at 31 December 2019                94 604 218        94 604 218 
                                   -------------------  ---------------- 
 
 Amortisation for the year                   7 238 239         7 238 239 
                                   -------------------  ---------------- 
                                       ---------------   --------------- 
   Balance at 30 June 2020                 101 842 457       101 842 457 
                                             =========         ========= 
                                   -------------------  ---------------- 
 Carrying amount 
                                   -------------------  ---------------- 
 At 30 June 2020                            26 396 729        26 396 729 
                                            ==========          ======== 
                                   -------------------  ---------------- 
 Restated at 31 December 2019               30 427 133        30 427 133 
                                             =========          ======== 
                                   -------------------  ---------------- 
 At 31 December 2018 - Restated             45 411 343        45 411 343 
                                            ==========          ======== 
                                   -------------------  ---------------- 
 
 
                                           Historical Cost 
                                           Computer 
                                           Software             Total 
                                -------------------  ---------------- 
                                                ZWL               ZWL 
                                -------------------  ---------------- 
 Cost 
                                -------------------  ---------------- 
 Balance at 1 January 2019                5 375 405         5 375 405 
                                -------------------  ---------------- 
 Acquisitions                                94 320            94 320 
                                -------------------  ---------------- 
                                  -----------------    -------------- 
                                -------------------  ---------------- 
 Balance at 31 December 2019              5 469 725         5 469 725 
                                -------------------  ---------------- 
 Acquisitions                             1 570 139         1 570 139 
                                -------------------  ---------------- 
                                  -----------------    -------------- 
   Balance at 30 June 2020                7 039 864         7 039 864 
                                         ==========          ======== 
                                -------------------  ---------------- 
 
 Accumulated amortisation 
                                -------------------  ---------------- 
 Balance at 1 January 2019                3 338 632         3 338 632 
                                -------------------  ---------------- 
                                            733 909           733 909 
 Amortisation for the year        -----------------    -------------- 
                                -------------------  ---------------- 
 Balance at 31 December 2019              4 072 541         4 072 541 
                                -------------------  ---------------- 
 Amortisation for the year                  328 236           328 236 
                                -------------------  ---------------- 
                                  -----------------    -------------- 
   Balance at 30 June 2020                4 400 777         4 400 777 
                                         ==========          ======== 
                                -------------------  ---------------- 
 
 Carrying amount 
                                -------------------  ---------------- 
 At 30 June 2020                          2 639 087         2 639 087 
                                         ==========          ======== 
                                -------------------  ---------------- 
 At 31 December 2019                      1 397 186         1 397 186 
                                         ==========          ======== 
                                -------------------  ---------------- 
 
 At 1 January 2019                        2 036 775         2 036 775 
                                         ==========          ======== 
                                -------------------  ---------------- 
 
    18.     PROPERTY AND EQUIPMENT 
 
                                                                                                               Inflation adjusted 
                                                                                                     Capital 
                                                                                                     work in                                                         Furniture               Right of             Freehold 
                                                                                                    progress            Computers        Motor Vehicles            & Equipment             Use Assets     Land & Buildings               Total 
                                                                                                              -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
                                                                                                         ZWL                  ZWL                   ZWL                    ZWL                    ZWL                  ZWL                 ZWL 
                                         -------------------------------------------------------------------  -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
 Cost/Revaluation amount                                                                            Restated             Restated              Restated               Restated               Restated             Restated            Restated 
                                         -------------------------------------------------------------------  -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
                                                                                                     168 996                                                                                                                           540 132 
 At 1 January 2019 - restated                                                                            470          166 264 633            29 873 411            105 750 226                      -           69 247 791                 531 
                                         -------------------------------------------------------------------  -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
 Additions                                                                                        48 037 157           30 073 122             3 040 032             11 395 371                      -                    -          92 545 682 
                                         -------------------------------------------------------------------  -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
 Initial recognition - Right 
  of Use Asset                                                                                             -                    -                     -                      -             38 275 228                    -          38 275 228 
                                         -------------------------------------------------------------------  -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
                                                                                                     (37 762 
 Capitalisations                                                                                        870)            3 213 701               769 427              2 666 736                      -           31 113 005                   - 
                                         -------------------------------------------------------------------  -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
                                                                                                                                                                                                                                       383 149 
 Revaluation gain                                                                                          -                    -                     -                      -                      -          383 149 135                 135 
                                         -------------------------------------------------------------------  -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
 Translation gains on change                                                                                                                                                                                                           226 166 
  in functional                                                                                            -                    -                     -                      -                      -          226 166 302                 302 
                                         -------------------------------------------------------------------  -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
                                                                                           -----------------   ------------------                         --------------------                          ------------------   ----------------- 
                                                                                                     179 570              199 551   -------------------                119 512   --------------------              709 716           1 280 268 
  At 31 December 2019 - restated                                                                         757                  456            33 682 871                    334             38 275 228                  833                 878 
                                         -------------------------------------------------------------------  -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
 Additions                                                                                        71 363 740           13 696 542                     -                338 913                      -                    -          85 399 196 
                                         -------------------------------------------------------------------  -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
 Capitalisations                                                                                     542 202            (542 202)                     -                      -                      -                    -                   - 
                                         -------------------------------------------------------------------  -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
 Disposals                                                                                                 -                    -           (4 047 718)                      -                      -                    -         (4 047 718) 
                                         -------------------------------------------------------------------  -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
 Remeasurement of Right of 
  Use Asset                                                                                                -                    -                     -                      -             21 591 106                    -          21 591 106 
                                         -------------------------------------------------------------------  -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
                                                                                                                                                                                                                                       402 510 
 Revaluation gain                                                                                          -                    -                     -                      -                      -          402 510 811                 811 
                                         -------------------------------------------------------------------  -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
                                                                                           -----------------   ------------------     -----------------     ------------------     ------------------   ------------------   ----------------- 
   At 30 June 2020                                                                                   251 476              212 665            29 635 153                119 851             59 866 334            1 112 187           1 781 014 
                                                                                                         699                  196           ===========                    247            ===========                  643                 019 
                                                                                                  ==========          ===========                                  ===========                                 ===========          ========== 
                                         -------------------------------------------------------------------  -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
 Accumulated depreciation 
                                         -------------------------------------------------------------------  -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
                                                                                                                                                                                                                                       199 180 
 At 1 January 2019 - restated                                                                              -           85 899 869            23 837 869             87 777 468                      -            1 665 221                 428 
                                         -------------------------------------------------------------------  -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
 Charge for the year                                                                                       -           27 452 336             4 226 561              7 926 049              8 989 273            1 583 168          50 177 388 
                                         -------------------------------------------------------------------  -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
 Disposals                                                                                                 -                    -           (4 047 718)                      -                      -                    -         (4 047 718) 
                                         -------------------------------------------------------------------  -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
                                                                                                                -----------------                                                                                              --------------- 
                                                                                           -----------------              113 352     -----------------     ------------------     ------------------     ----------------             245 310 
  At 31 December 2019 - restated                                                                           -                  206            24 016 712             95 703 517              8 989 273            3 248 389                 098 
                                         -------------------------------------------------------------------  -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
 Charge for period                                                                                         -            9 161 977             1 157 810              4 271 648                      -            4 708 253          19 299 688 
                                         -------------------------------------------------------------------  -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
 Charge for period - Right 
  of Use Asset                                                                                             -                    -                     -                      -              1 985 839                    -           1 985 839 
                                         -------------------------------------------------------------------  -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
 At 30 June 2020                                                                                           -          122 514 183            25 174 522             99 975 165             10 975 112            7 956 642             266 595 
                                                                                                  ==========          ===========            ==========            ===========            ===========           ==========                 624 
                                                                                                                                                                                                                                     ========= 
                                         -------------------------------------------------------------------  -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
 Carrying amount 
  At 30 June 2020                                                                                    251 476           85 483 360             4 460 631             19 876 082             48 891 222            1 104 230           1 514 418 
                                                                                                         699          ===========            ==========            ===========            ===========                  401                 395 
                                                                                                  ==========                                                                                                    ==========          ========== 
                                         -------------------------------------------------------------------  -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
 At 31 December 2019 - Restated                                                                      179 570           83 983 948             9 666 158             23 808 817             29 285 955              706 427           1 032 743 
                                                                                                         757          ===========            ==========            ===========            ===========                  844                 479 
                                                                                                  ==========                                                                                                    ==========          ========== 
                                         -------------------------------------------------------------------  -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
 At 1 January 2019 - Restated                                                                        168 996           80 364 764             6 035 542             17 972 758                      -           67 582 569             340 952 
                                                                                                         470          ===========            ==========            ===========            ===========           ==========                 102 
                                                                                                  ==========                                                                                                                         ========= 
                                         -------------------------------------------------------------------  -------------------  --------------------  ---------------------  ---------------------  -------------------  ------------------ 
 
 
    18.     PROPERTY AND EQUIPMENT 
 
                                                                            Historical Cost 
 
                                  Capital                                                      Furniture              Right of   Freehold 
                         work in progress            Computers       Motor Vehicles          & Equipment          Use Assets**    Land & Buildings               Total 
                                           -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
 Cost/Revaluation                     ZWL                  ZWL                  ZWL                  ZWL                   ZWL                  ZWL                ZWL 
 amount 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
                                                                                                                                                                26 478 
 At 1 January 2019              9 463 994            7 413 351            1 269 770            4 478 223                     -            3 852 998                336 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
                                                                                                                                                                24 308 
 Additions                     19 774 151            2 975 151              206 348            1 352 847                     -                    -                497 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
                                  (14 413 
 Capitalisations                     772)            1 226 643              293 684            1 017 871                     -           11 875 574                  - 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
                                                                                                                                            236 960            236 960 
 Revaluation gain                       -                    -                    -                    -                     -                  551                551 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
 Translation gain 
  on change 
  in functional                                                                                                                                                 15 653 
  currency                              -                    -                    -                    -                     -           15 653 157                157 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
 Initial 
  recognition - 
  Right 
  of use asset                          -                    -                    -                    -             4 096 580                    -          4 096 580 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
 Reversal of 
  impairment                            -                    -                    -                    -                     -               40 600             40 600 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
                        -----------------                                                                                          ----------------    --------------- 
   At 31 December                  14 824   ------------------    -----------------   ------------------    ------------------              268 382            307 537 
   2019                               373           11 615 145            1 769 802            6 848 941             4 096 580                  800                722 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
                                                                                                                                                                19 605 
 Additions                     14 059 872            5 318 326                    -              227 412                     -                    -                609 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
 Right of Use Asset                                                                                                                                             11 776 
  re-measurement                        -                    -                    -                    -            11 776 445                    -                445 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
 Capitalisations                  206 954            (206 954)                    -                    -                     -                    -                  - 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
                                                                                                                                            839 099            839 099 
 Revaluation gain                       -                    -                    -                    -                     -                  708                708 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
 Disposals                              -                    -            (180 000)                    -                     -                    -          (180 000) 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
                        -----------------   ------------------    -----------------   ------------------    ------------------     ----------------    --------------- 
   At 30 June 2020                 29 091           16 726 516            1 589 802            7 076 353            15 873 025            1 107 482              1 177 
                                      199          ===========           ==========          ===========           ===========                  588            839 484 
                               ==========                                                                                                ==========         ========== 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
 Accumulated 
 depreciation 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
 At 1 January 2019                      -            3 607 903            1 008 262            3 626 458                     -              391 644          8 634 267 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
 Charge for the 
  year                                  -            1 427 692              222 449              481 383             1 310 867              175 836          3 618 227 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
                                                                                                                                                       --------------- 
   At 31 December                            -----------------    -----------------   ------------------   -------------------    -----------------             12 252 
   2019               -------------------            5 035 595            1 230 711            4 107 841             1 310 867              567 480                495 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
 Charge for the 
  year                                  -            1 172 454               90 892              392 772                     -            2 684 707          4 340 825 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
 Charge for period 
  - Right 
  of Use Asset                          -                    -                    -                    -             1 501 219                    -          1 501 219 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
 Disposals                              -                    -            (180 000)                    -                     -                    -          (180 000) 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
                       ------------------   ------------------   ------------------   ------------------   -------------------   ------------------   ---------------- 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
 At 30 June 2020                        -            6 208 049            1 141 603            4 500 613             2 812 086            3 252 187             17 914 
                               ==========          ===========           ==========          ===========           ===========           ==========                538 
                                                                                                                                                            ========== 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
 Carrying amount 
  At 30 June 2020                  29 091           10 518 468              448 199            2 575 739            13 060 939            1 104 230              1 159 
                                      199          ===========           ==========          ===========           ===========                  401            924 945 
                               ==========                                                                                                ==========         ========== 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
 At 31 December                14 824 373            6 579 550              539 092            2 741 100             2 785 713              267 815            295 285 
  2019                         ==========          ===========           ==========          ===========           ===========                  400                227 
                                                                                                                                         ==========         ========== 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
 At 1 January 2019              9 463 994            3 805 448              261 508              851 765                     -            3 461 354             17 844 
                               ==========          ===========           ==========          ===========           ===========           ==========                069 
                                                                                                                                                            ========== 
                     --------------------  -------------------  -------------------  -------------------  --------------------  -------------------  ----------------- 
 
 
   19.        LEASES 

The Group leases various buildings for the furtherance of its trade. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes.

The Group's leases are recognised as a right-of-use asset and a corresponding liability is also recognised in the Statement of Financial Position from the date at which the leased asset is available for use by the Group.

Assets and liabilities arising from a leasing arrangement are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

   --    fixed payments, less any lease incentives receivable; 

-- the exercise price of a purchase option if the Group is reasonably certain to exercise that option, and;

   --    payments of penalties for terminating the lease, if it is provided in the leasing agreement. 

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

The Right-of-Use Assets represent the Group's rights to occupy land and buildings in various lease arrangements in which the Group is a lessee. The Right-of-Use Assets are depreciated over the shorter of the lease term including extension options where the Group is certain to exercise such and the useful life of the underlying asset

The lease payments are discounted using the Group's incremental borrowing rate. The Group does not recognise Right of Use Assets or lease liabilities or short term leases which are expensed on a straight line basis.

   20.       CAPITAL COMMITMENTS 
 
                                      Inflation adjusted                        Historical Cost 
                                       30 June         31 December             30 June         31 December 
                            ------------------  ------------------  ------------------  ------------------ 
                                          2020                2019                2020                2019 
                            ------------------  ------------------  ------------------  ------------------ 
                                           ZWL                 ZWL                 ZWL                 ZWL 
                            ------------------  ------------------  ------------------  ------------------ 
                                                          Restated 
                            ------------------  ------------------  ------------------  ------------------ 
 Capital expenditure 
  contracted for                     5 447 693          15 269 794           5 447 693           5 828 388 
                            ------------------  ------------------  ------------------  ------------------ 
 Capital expenditure 
  authorised but not yet               112 558             308 021             112 558             117 569 
  contracted for                           144                 310                 144                 873 
                            ------------------  ------------------  ------------------  ------------------ 
                             -----------------   -----------------   -----------------   ----------------- 
   Balance at 31 December              118 005             323 291             118 005             123 398 
                                           837                 104                 837                 261 
                                    ==========          ==========          ==========          ========== 
                            ------------------  ------------------  ------------------  ------------------ 
 

The capital expenditure will be funded from the Group's own resources.

   21.       CONTINGENT LIABILITIES 
 
                                     Inflation adjusted                       Historical Cost 
                                      30 June        31 December             30 June         31 December 
                           ------------------  -----------------  ------------------  ------------------ 
                                         2020               2019                2020                2019 
                           ------------------  -----------------  ------------------  ------------------ 
                                          ZWL                ZWL                 ZWL                 ZWL 
                           ------------------  -----------------  ------------------  ------------------ 
                                                        Restated 
                           ------------------  -----------------  ------------------  ------------------ 
                                      161 995            332 604             161 995             126 952 
 Guarantees                               686                057                 686                 189 
                           ------------------  -----------------  ------------------  ------------------ 
 Facilities approved 
  but not drawn down               33 896 956         52 576 367          33 896 956          20 067 960 
                           ------------------  -----------------  ------------------  ------------------ 
 Expected credit losses 
  on facilities approved 
  but not drawdown                  (319 214)        (3 869 621)           (319 214)         (1 477 002) 
                           ------------------  -----------------  ------------------  ------------------ 
 
 Expected credit losses                                  (14 219 
  on guarantees                     (909 332)               185)           (909 332)         (5 427 344) 
                           ------------------  -----------------  ------------------  ------------------ 
                            -----------------   ----------------   -----------------   ----------------- 
   Closing balances                   194 664            367 091             194 664             140 115 
                                          096                618                 096                 803 
                                   ==========         ==========          ==========          ========== 
                           ------------------  -----------------  ------------------  ------------------ 
 
   22.       EXCHANGE RATES 

The following exchange rates have been used to translate the foreign currency balances to Zimbabwean dollars (ZWL) at period end:-

 
                                   30 June   31 December 
                                      2020          2019 
                                Mid - rate    Mid - rate 
                        -----  -----------  ------------ 
                                       ZWL           ZWL 
                        -----  -----------  ------------ 
 United States Dollar    USD       63.7442       16.7734 
                        -----  -----------  ------------ 
 British Sterling        GBP       78.6922       22.1677 
                        -----  -----------  ------------ 
 South African Rand      ZAR        0.2723        0.8350 
                        -----  -----------  ------------ 
 European Euro           EUR       71.5337       18.8164 
                        -----  -----------  ------------ 
 Botswana Pula           BWP        0.1852        0.6302 
                        -----  -----------  ------------ 
 
 

The translation of foreign currency denominated Profit or loss items was done using the various spot rates which applied on the respective transaction dates during the period under review.

   23.        EVENTS AFTER THE REPORTING PERIOD 

The Directors have assessed and concluded that there were no significant events after the reporting

period which require separate disclosure for the Group.

NMB BANK LIMITED

STATEMENT OF COMPREHENSIVE INCOME

for the six months ended 30 June 2020

 
                                                Inflation adjusted                         Historical Cost* 
                                                 30 June              30 June              30 June             30 June 
                                                    2020                 2019                 2020                2019 
                                                     ZWL                  ZWL                  ZWL                 ZWL 
                                                                     Restated 
                                                Reviewed             Reviewed 
 Interest income                             205 869 041          284 733 413          127 969 603          23 200 282 
                                            (37 096 152)         (85 307 388)         (22 245 160)         (6 890 386) 
 Interest expense                      -----------------    -----------------    -----------------    ---------------- 
 Net interest income                         168 772 889          199 426 025          105 724 443          16 309 896 
 Fee and commissions income                  241 177 285          221 924 797          154 253 951          18 569 148 
                                             133 139 769          355 453 683          114 112 987          32 495 530 
 Net foreign exchange gains             ----------------     ----------------     ----------------     --------------- 
 Revenue                                     543 089 943          776 804 505          374 091 381          67 374 574 
                                                                                         1 064 821 
                                             668 359 753          429 322 061                  755          30 064 410 
 Other income                  a       -----------------     ----------------     ----------------     --------------- 
                                               1 211 449            1 206 126            1 438 913 
 Operating income                                    696                  566                  136          97 438 984 
                                                (329 405             (340 952             (186 473             (23 917 
                                                    313)                 063)                 176)                567) 
 Operating expenditure         b       -----------------    -----------------    -----------------    ---------------- 
 Operating income before 
  impairment 
  charge and loss on net monetary                                                        1 252 439 
  position                                   882 044 383          865 174 503                  960          73 521 417 
 Impairment losses on financial 
  assets measured at amortised 
  cost                                      (25 219 962)            7 896 544         (25 219 962)         943 144 
                                                                     (206 421 
                                            (33 265 303)                 981)                    -                   - 
 Loss on net monetary position         -----------------    -----------------    -----------------    ---------------- 
                                                                                         1 227 219 
 Profit before taxation                      823 559 118          666 649 066                  998          74 464 561 
                                                (155 504             (162 136             (133 332             (17 022 
                                                    400)                 398)                 999)                320) 
 Taxation                             ------------------    -----------------    -----------------    ---------------- 
                                                                                         1 093 886 
 Profit for the period                       668 054 718          504 512 668                  999          57 442 241 
 Other comprehensive income 
 Revaluation gains on land 
  and buildings, net of tax                  303 010 138           13 103 912          631 674 260           3 986 225 
                                        ----------------    -----------------    -----------------     --------------- 
                                                 971 064              517 616            1 725 561              61 428 
                                                     856                  580                  259                 466 
                                              ==========           ==========           ==========           ========= 
 
 Earnings/(losses) per share 
  (ZWL cents) 
 - Basic and diluted          c.4               4 047.33             3 056.53             6 627.19              348.01 
 - Headline                   c.4               (159.73)             (267.11)                19.32               76.92 
 

*The Historical Cost information has been shown as supplementary information for the benefit of users. These are not required in terms of International Accounting Standard (IAS) 29 "Financial Reporting in Hyperinflationary Economies". The Reviewer has not expressed an opinion on the Historical Cost information.

STATEMENT OF FINANCIAL POSITION

As at 30 June 2020

 
                                              Inflation adjusted                          Historical Cost* 
                                               30 June          31 December               30 June          31 December 
                           ------  -------------------  -------------------  --------------------  ------------------- 
                            Note                  2020                 2019                  2020                 2019 
                           ------  -------------------  -------------------  --------------------  ------------------- 
                                                   ZWL                  ZWL                   ZWL                  ZWL 
                           ------  -------------------  -------------------  --------------------  ------------------- 
                                                                   Restated 
                           ------  -------------------  -------------------  --------------------  ------------------- 
 SHAREHOLDER'S FUNDS                          Reviewed              Audited 
                           ------  -------------------  -------------------  --------------------  ------------------- 
 Share capital                d                424 180              424 180                16 506               16 506 
                           ------  -------------------  -------------------  --------------------  ------------------- 
                                                                    752 022 
 Share premium                             752 022 609                  609            31 474 502           31 474 502 
                                   -------------------  -------------------  --------------------  ------------------- 
 
 Functional currency translation                                    167 928 
  reserve                                  167 928 479                  479            11 619 648           11 619 648 
                                   -------------------  -------------------  --------------------  ------------------- 
                                                                    284 488 
 Revaluation reserve                       587 498 371                  233           807 754 210          176 079 950 
                                   -------------------  -------------------  --------------------  ------------------- 
                                             1 237 590              569 535             1 423 285 
                                                   458                  740                   471          329 398 472 
 Retained earnings                   -----------------    -----------------    ------------------      --------------- 
                                   -------------------  -------------------  --------------------  ------------------- 
                                             2 745 464            1 774 399             2 274 150 
                                                   097                  241                   337          548 589 078 
 Total shareholder's funds           -----------------    -----------------    ------------------      --------------- 
                                   -------------------  -------------------  --------------------  ------------------- 
 LIABILITIES 
                           ------  -------------------  -------------------  --------------------  ------------------- 
                                             3 647 386            3 315 771             3 647 386            1 265 602 
 Deposits and other liabilities                    105                  824                   105                  395 
                                   -------------------  -------------------  --------------------  ------------------- 
 Current tax liabilities                    14 844 164            1 835 139            14 844 164              700 457 
                                   -------------------  -------------------  --------------------  ------------------- 
                                                                    295 265 
 Deferred tax liabilities                  411 406 190                  946           414 999 204           97 666 693 
                                   -------------------  -------------------  --------------------  ------------------- 
                                                                     74 301 
 Subordinated term loan                    112 710 937                  705           112 710 937           28 360 340 
                                   -------------------  -------------------  --------------------  ------------------- 
 Amount owing to Holding                     2 143 122            5 614 799             2 143 122            2 143 122 
  company                            -----------------    -----------------     -----------------    ----------------- 
                                   -------------------  -------------------  --------------------  ------------------- 
                                             4 188 490            3 692 789             4 192 083            1 394 473 
                                                   518                  413                   532                  007 
 Total liabilities                   -----------------    -----------------     -----------------    ----------------- 
                                   -------------------  -------------------  --------------------  ------------------- 
 Total shareholder's                         6 933 954            5 467 188             6 466 233            1 943 062 
 funds                                             615                  654                   869                  085 
 and liabilities                            ==========           ==========           ===========           ========== 
                           ------  -------------------  -------------------  --------------------  ------------------- 
 
 ASSETS 
                           ------  -------------------  -------------------  --------------------  ------------------- 
 Cash and cash                               1 369 056            1 289 795             1 369 056 
  equivalents                 e                    048                  771                   048          492 304 267 
                           ------  -------------------  -------------------  --------------------  ------------------- 
                                                                    280 766 
 Investment securities                     129 932 319                  312           129 932 319          107 166 155 
                                   -------------------  -------------------  --------------------  ------------------- 
 Loans, advances and other                   2 523 471            2 226 997             2 434 002 
  assets                                           990                  533                   336          815 429 137 
                                   -------------------  -------------------  --------------------  ------------------- 
 Trade and other investments                 7 325 771            4 223 647             7 325 771            1 612 131 
                                   -------------------  -------------------  --------------------  ------------------- 
                                             1 363 353              602 234             1 363 353 
 Investment properties        f                    363                  779                   363          229 867 982 
                           ------  -------------------  -------------------  --------------------  ------------------- 
                                                                     30 427 
 Intangible assets                          26 396 729                  133             2 639 087            1 397 186 
                                   -------------------  -------------------  --------------------  ------------------- 
                                             1 514 418            1 032 743             1 159 924 
 Property and equipment                            395                  479                   945          295 285 227 
                                   -------------------  -------------------  --------------------  ------------------- 
                                     -----------------    -----------------     -----------------    ----------------- 
 --------------------------------  -------------------  -------------------  --------------------  ------------------- 
 Total assets                             6 933 954615            5 467 188             6 466 233            1 943 062 
                                            ==========                  654                   869                  085 
                                                                 ==========            ==========           ========== 
                                   -------------------  -------------------  --------------------  ------------------- 
 

*The Historical Cost information has been shown as supplementary information for the benefit of users. These are not required in terms of International Accounting Standard (IAS) 29 "Financial Reporting in Hyperinflationary Economies". The Reviewer has not expressed an opinion on the Historical Cost information.

STATEMENT OF CHANGES IN EQUITY

for the six months ended 30 June 2020

 
                                                                        Inflation adjusted 
                                                                   Functional 
                                                                     Currency 
                                                                  Translation            Revaluation               Retained 
                      Share Capital        Share Premium              Reserve                Reserve               Earnings                 Total 
                 ------------------  -------------------  -------------------  ---------------------  ---------------------  -------------------- 
                                ZWL                  ZWL                  ZWL                    ZWL                    ZWL                   ZWL 
                 ------------------  -------------------  -------------------  ---------------------  ---------------------  -------------------- 
 Balances at 1                                   752 022 
  January 2019              424 180                  609                    -                      -            221 025 066           973 471 855 
                 ------------------  -------------------  -------------------  ---------------------  ---------------------  -------------------- 
 Change in 
  functional 
  currency 
  translation                                                         167 928 
  reserve                         -                    -                  479                      -                      -           167 928 479 
                 ------------------  -------------------  -------------------  ---------------------  ---------------------  -------------------- 
 Total 
  comprehensive 
  income for 
  the 
  period                          -                    -                    -             13 103 912            504 512 668           517 616 580 
                 ------------------  -------------------  -------------------  ---------------------  ---------------------  -------------------- 
                                  -                    -                    -                      -           (52 230 685)          (52 230 685) 
 Dividends paid   -----------------    -----------------    -----------------      -----------------     ------------------    ------------------ 
                 ------------------  -------------------  -------------------  ---------------------  ---------------------  -------------------- 
 Balances at 30                                  752 022              167 928                                                           1 606 786 
  June 2019                 424 180                  609                  479             13 103 912            673 307 049                   229 
                 ------------------  -------------------  -------------------  ---------------------  ---------------------  -------------------- 
 Total 
  comprehensive 
  income for                                                                                                       (103 771 
  the                                                                                    271 384 321                   309)           167 613 012 
  period            ---------------    -----------------    -----------------     ------------------     ------------------      ---------------- 
                 ------------------  -------------------  -------------------  ---------------------  ---------------------  -------------------- 
 Balances at 31                                  752 022              167 928                                                           1 774 399 
  December 2019             424 180                  609                  479            284 488 233            569 535 740                   241 
                 ------------------  -------------------  -------------------  ---------------------  ---------------------  -------------------- 
 Total 
  comprehensive 
  income for 
  the 
  period                          -                    -                    -            303 010 138            668 054 718           971 064 856 
                 ------------------  -------------------  -------------------  ---------------------  ---------------------  -------------------- 
                  -----------------    -----------------    -----------------      -----------------      -----------------     ----------------- 
                 ------------------  -------------------  -------------------  ---------------------  ---------------------  -------------------- 
 Balances at 30             424 180              752 022              167 928            587 498 371              1 237 590             2 745 464 
  June 2020              ==========                  609                  479             ==========                    458                   097 
                                              ==========           ==========                                   ===========            ========== 
                 ------------------  -------------------  -------------------  ---------------------  ---------------------  -------------------- 
 

STATEMENT OF CHANGES IN EQUITY

for the six months ended 30 June 2020

 
                                                                     Historical Cost* 
                                                                 Functional 
                                                                   Currency 
                                                                Translation         Revaluation             Retained 
                      Share Capital       Share Premium             Reserve             Reserve             Earnings               Total 
                 ------------------  ------------------  ------------------  ------------------  -------------------  ------------------ 
                                ZWL                 ZWL                 ZWL                 ZWL                  ZWL                 ZWL 
                 ------------------  ------------------  ------------------  ------------------  -------------------  ------------------ 
 Balances at 1 
  January 2019               16 506          31 474 502                   -             136 741           47 267 030          78 894 779 
                 ------------------  ------------------  ------------------  ------------------  -------------------  ------------------ 
 Change in 
  functional 
  currency 
  translation 
  reserve                         -                   -          11 619 648                   -                    -          11 619 648 
                 ------------------  ------------------  ------------------  ------------------  -------------------  ------------------ 
 Total 
  comprehensive 
  income for 
  the 
  period                          -                   -                   -           3 986 225           57 442 241          61 428 466 
                 ------------------  ------------------  ------------------  ------------------  -------------------  ------------------ 
                                  -                   -                   -                   -          (3 772 370)         (3 772 370) 
 Dividend paid    -----------------   -----------------   -----------------   -----------------    -----------------    ---------------- 
                 ------------------  ------------------  ------------------  ------------------  -------------------  ------------------ 
 Balances at 30 
  June 2019                  16 506          31 474 502          11 619 648           4 122 966          100 936 901         148 170 523 
                 ------------------  ------------------  ------------------  ------------------  -------------------  ------------------ 
 
 Profit for the 
  period                          -                   -                   -         171 956 984          228 461 571         400 418 555 
                 ------------------  ------------------  ------------------  ------------------  -------------------  ------------------ 
 
   Balances at 
   31 December    -----------------   -----------------   -----------------   -----------------    -----------------   ----------------- 
   2019                      16 506          31 474 502          11 619 648         176 079 950          329 398 472         548 589 078 
                 ------------------  ------------------  ------------------  ------------------  -------------------  ------------------ 
 Total 
  comprehensive 
  income for 
  the                                                                                                      1 093 886           1 725 561 
  period                          -                   -                   -         631 674 260                  999                 259 
                 ------------------  ------------------  ------------------  ------------------  -------------------  ------------------ 
                  -----------------   -----------------   -----------------   -----------------    -----------------   ----------------- 
                 ------------------  ------------------  ------------------  ------------------  -------------------  ------------------ 
 Balances at 30              16 506          31 474 502          11 619 648         807 754 210            1 423 285           2 274 150 
  June 2020              ==========          ==========          ==========          ==========                  471                 337 
                                                                                                          ==========          ========== 
                 ------------------  ------------------  ------------------  ------------------  -------------------  ------------------ 
 

*The Historical Cost information has been shown as supplementary information for the benefit of users. These are not required in terms of International Accounting Standard (IAS) 29 "Financial Reporting in Hyperinflationary Economies". The Reviewer has not expressed an opinion on the Historical Cost information.

STATEMENT OF CASH FLOWS

for the six months ended 30 June 2020

 
                                                                        Inflation adjusted                                  Historical Cost* 
                                                                          30 June               30 June                  30 June                       30 June 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
                                                                             2020                  2019                     2020                          2019 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
                                                                              ZWL                   ZWL                      ZWL                           ZWL 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
                                                                                               Restated 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
                                                                         Reviewed              Reviewed 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
 CASH FLOWS FROM OPERATING ACTIVITIES 
                                                                                   --------------------  -----------------------  ---------------------------- 
                                                                                                666 649                1 227 219 
 Profit before taxation                                               823 559 118                   066                      998                    74 464 561 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
 Non-cash items 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
 
   *    Impairment losses on financial assets measured at 
        amortised cost                                                 25 219 962           (7 896 544)               25 219 962                     (943 144) 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
                                                                         (640 103              (380 064               (1 053 907 
   *    Investment properties fair value adjustment                          624)                  124)                     444)                  (27 991 540) 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
 
   *    Trade and other investments fair value gains                  (3 102 124)           (4 762 662)              (5 713 640)                     (506 254) 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
 
   *    Depreciation (excluding Right of use assets)                   19 299 688            34 764 116                4 340 825                       988 561 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
 
   *    Depreciation - Right of use assets                              1 985 839             5 967 714                1 501 219                       537 067 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
 
   *    Interest capitalised on subordinated term loan                  5 459 411             2 309 884                2 888 228                       275 887 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
 
   *    Amortisation of intangible assets                               7 238 239            22 309 322                  328 236                       373 555 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
                                                                         (113 156              (247 818                 (113 156 
                                                                             723)                  512)                     723)                  (29 598 834) 
   *    Unrealised foreign exchange gains                     -------------------    ------------------     --------------------          -------------------- 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
 Operating cash flows before 
  changes in operating assets 
  and liabilities                                                     126 399 786            91 458 260               88 720 661                    17 599 859 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
 Changes in operating assets 
  and liabilities 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
 (Decrease)/Increase in deposits                                       (1 488 634              (328 963 
  and other liabilities                                                      636)                  301)              561 534 792                  (27 152 693) 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
 
                                                                        1 544 313              (198 444                 (410 487 
 Decrease/(increase) in loans,                                                530                  246)                     298)                   (9 394 652) 
  advances and other assets                                   -------------------    ------------------     --------------------          -------------------- 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
                                                                                               (435 949 
 Net cash generated/(used) from                                       182 078 680                  287)              239 768 155                  (18 947 486) 
  operations                                                   ------------------     -----------------      -------------------           ------------------- 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
 Taxation 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
                                                                                                (10 211 
                                                                     (12 483 633)                  836)              (9 197 573)                   (1 219 677) 
 Corporate tax paid                                           -------------------    ------------------     --------------------          -------------------- 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
                                                                                               (446 161 
 Net cash inflow/(outflow) from                                       169 595 047                  123)              230 570 582                  (20 167 163) 
  operating activities                                        -------------------    ------------------      -------------------           ------------------- 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
 CASH FLOWS FROM INVESTING ACTIVITIES 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
 Acquisition of intangible assets                                     (3 207 838)             (789 701)              (1 570 139)                      (94 320) 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
 Acquisition of property and                                                                    (82 103 
  equipment                                                          (85 399 196)                  509)             (19 605 609)                   (9 806 241) 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
                                                                         (121 277 
 Acquisition of investment properties                                        460)           (2 832 244)             (79 840 437)                     (338 276) 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
 Disposal/(Acquisition) of investment 
  securities                                                          150 833 993            75 578 716             (22 766 165)                     9 026 936 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
 Decrease in amount owing from 
  Holding Company                                                               -             4 674 439                        -                       558 303 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
 Increase in amount owing to 
  Holding Company                                                               -            18 286 435                        -                     2 184 087 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
 Proceeds on disposal of investment                                       262 500                     -                  262 500                             - 
  properties                                                  -------------------     -----------------      -------------------           ------------------- 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
                                                                                                                        (123 519 
 Net cash inflow/(outflow) from                                        58 788 001            12 814 136                     850)                   (1 530 489) 
  investing activities                                        -------------------     -----------------      -------------------           ------------------- 
                                                           ----------------------  --------------------  -----------------------  ---------------------------- 
 

STATEMENT OF CASH FLOWS

for the six months ended 30 June 2020

 
                                              Inflation adjusted                         Historical Cost* 
                                               30 June              30 June              30 June             30 June 
                                  --------------------  -------------------  -------------------  ------------------ 
                                                  2020                 2019                 2020                2019 
                                  --------------------  -------------------  -------------------  ------------------ 
                                                   ZWL                  ZWL                  ZWL                 ZWL 
                                  --------------------  -------------------  -------------------  ------------------ 
                                                                   Restated 
                                  --------------------  -------------------  -------------------  ------------------ 
                                              Reviewed             Reviewed 
                                  --------------------  -------------------  -------------------  ------------------ 
 CASH FLOWS FROM FINANCING ACTIVITIES 
                                                        -------------------  -------------------  ------------------ 
 Dividend paid                                       -         (52 230 685)                              (3 772 370) 
                                  --------------------  -------------------  -------------------  ------------------ 
 Payment of interest on 
  subordinated 
  term loan                                          -          (1 507 481)                    -           (180 050) 
                                  --------------------  -------------------  -------------------  ------------------ 
                                           (8 839 289)          (2 938 988)          (5 082 972)           (559 029) 
 Repayment of lease liabilities     ------------------    -----------------    -----------------    ---------------- 
                                  --------------------  -------------------  -------------------  ------------------ 
 Net cash outflow from financing           (8 839 289)         (56 677 154)          (5 082 972)         (4 511 449) 
  activities                        ------------------    -----------------    -----------------    ---------------- 
                                  --------------------  -------------------  -------------------  ------------------ 
 
 Net increase/(decrease) in                                        (490 024                                  (23 148 
  cash and cash equivalents                101 967 759                 143)          101 967 759                123) 
                                  --------------------  -------------------  -------------------  ------------------ 
 Net foreign exchange and 
  monetary 
  adjustments on cash and cash                                                                               100 136 
  equivalents                              774 784 022          838 399 746          774 784 022                 406 
                                  --------------------  -------------------  -------------------  ------------------ 
 
                                               492 304              941 420              492 304             112 440 
 Cash and cash equivalents at                      267                  168                  267                 912 
  beginning of the period            -----------------    -----------------    -----------------     --------------- 
                                  --------------------  -------------------  -------------------  ------------------ 
 Cash and cash equivalents at 
  the end of the period                      1 369 056            1 289 795            1 369 056             189 429 
                                                   048                  771                  048                 195 
                                            ==========           ==========           ==========           ========= 
                                  --------------------  -------------------  -------------------  ------------------ 
 
 

*The Historical Cost information has been shown as supplementary information for the benefit of users. These are not required in terms of International Accounting Standard (IAS) 29 "Financial Reporting in Hyperinflationary Economies". The Reviewer has not expressed an opinion on the Historical Cost information.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

for the six months ended 30 June 2020

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 where applicable.

   a.         OTHER income 
 
                                        Inflation adjusted                     Historical Cost 
                                         30 June            30 June             30 June          30 June 
                               -----------------  -----------------  ------------------  --------------- 
                                            2020               2019                2020             2019 
                               -----------------  -----------------  ------------------  --------------- 
                                             ZWL                ZWL                 ZWL              ZWL 
                               -----------------  -----------------  ------------------  --------------- 
                                                           Restated 
                               -----------------  -----------------  ------------------  --------------- 
 Trade and other investments 
  fair value gains                     3 102 124          4 762 662           5 713 640          675 006 
                               -----------------  -----------------  ------------------  --------------- 
 
 Fair value gains on                                                          1 053 907 
  investment properties              640 103 624        380 064 124                 444       27 991 540 
                               -----------------  -----------------  ------------------  --------------- 
 Rental income                         1 722 165          2 495 821           1 456 767          194 895 
                               -----------------  -----------------  ------------------  --------------- 
 Bad debts recovered                   2 078 628         13 373 536           1 308 953        1 131 780 
                               -----------------  -----------------  ------------------  --------------- 
 Other operating income               21 353 212         28 625 918           2 434 951           71 189 
                               -----------------  -----------------  ------------------  --------------- 
                                ----------------   ----------------   -----------------   -------------- 
                                         668 359            429 322           1 064 821       30 064 410 
                                             753                061                 755         ======== 
                                       =========          =========          ========== 
                               -----------------  -----------------  ------------------  --------------- 
 
   b.         Operating EXPITURE 
 
                                       Inflation adjusted                      Historical Cost 
                                        30 June            30 June            30 June            30 June 
                              -----------------  -----------------  -----------------  ----------------- 
                                           2020               2019               2020               2019 
                              -----------------  -----------------  -----------------  ----------------- 
                                            ZWL                ZWL                ZWL                ZWL 
                              -----------------  -----------------  -----------------  ----------------- 
                                                          Restated 
                              -----------------  -----------------  -----------------  ----------------- 
 The operating profit is after recognising 
  the following: 
                                                 -----------------  -----------------  ----------------- 
                                        181 087            141 502            112 760 
 Administration costs                       395                527                948         11 488 654 
                              -----------------  -----------------  -----------------  ----------------- 
 Impairment reversal on 
  land and buildings*                         -           -                         -           (40 600) 
                              -----------------  -----------------  -----------------  ----------------- 
 Depreciation - (excluding 
  Right of use assets)               19 299 688         34 764 116          4 340 825            988 561 
                              -----------------  -----------------  -----------------  ----------------- 
 Amortisation of intangible 
  assets                              7 238 239         22 309 322            328 236            373 555 
                              -----------------  -----------------  -----------------  ----------------- 
 Depreciation - Right of 
  use assets                          1 985 839          5 967 714          1 501 219            537 067 
                              -----------------  -----------------  -----------------  ----------------- 
 Staff costs - salaries, 
  allowances and related                119 794            136 408 
  costs                                     152                384         67 541 948         10 570 330 
                              -----------------  -----------------  -----------------  ----------------- 
                               ----------------   ----------------   ----------------   ---------------- 
                                        329 405            340 952            186 473             23 917 
                                            313                063                176                567 
                                     ==========         ==========         ==========         ========== 
                              -----------------  -----------------  -----------------  ----------------- 
 

*The impairment reversal on land and buildings arose due to fair value changes in the Bank's land and buildings measured using the revaluation model.

   c.         EARNINGS PER SHARE 

The calculation of earnings per share is based on the following figures:

 
                                             Inflation adjusted                          Historical Cost 
                                              30 June              30 June              30 June              30 June 
       -------------------------  -------------------  -------------------  -------------------  ------------------- 
                                                 2020                 2019                 2020                 2019 
       -------------------------  -------------------  -------------------  -------------------  ------------------- 
                                                  ZWL                  ZWL                  ZWL                  ZWL 
       -------------------------  -------------------  -------------------  -------------------  ------------------- 
                                                                  Restated 
       -------------------------  -------------------  -------------------  -------------------  ------------------- 
 c.1    Earnings/(losses) 
       -------------------------  -------------------  -------------------  -------------------  ------------------- 
                                                                                      1 093 886 
  Profit for the year                     668 054 718          504 512 668                  999           57 442 241 
 -------------------------------  -------------------  -------------------  -------------------  ------------------- 
  Headline earnings                      (26 365 917)         (44 089 772)            3 189 319           14 180 190 
 -------------------------------  -------------------  -------------------  -------------------  ------------------- 
 c.2    Number of shares 
       -------------------------  -------------------  -------------------  -------------------  ------------------- 
  Weighted average 
   shares in issue                         16 506 050           16 506 050           16 506 050           16 506 050 
 -------------------------------  -------------------  -------------------  -------------------  ------------------- 
 c.3    Headline (losses)/ earnings 
       ----------------------------------------------  -------------------  -------------------  ------------------- 
                                                                                      1 093 886 
  Profit for the period                   668 054 718          504 512 668                  999           57 442 241 
 -------------------------------                       -------------------  -------------------  ------------------- 
        Add/(deduct) non-recurring items 
       ----------------------------------------------  -------------------  -------------------  ------------------- 
  Trade investments 
   fair value gains                       (3 102 124)          (4 762 662)          (5 713 640)            (506 254) 
 -------------------------------                       -------------------  -------------------  ------------------- 
  Unrealised foreign 
   exchange revaluation 
   gains                                (113 156 723)        (247 818 512)        (113 156 723)         (29 598 834) 
 -------------------------------  -------------------  -------------------  -------------------  ------------------- 
 
  Fair value gains                                                                   (1 053 907 
   on investment properties             (640 103 624)        (380 064 124)                 444)         (27 991 540) 
 -------------------------------  -------------------  -------------------  -------------------  ------------------- 
                                           61 941 834           84 042 858           82 080 126           13 350 368 
  Tax thereon                       -----------------    -----------------    -----------------    ----------------- 
 -------------------------------  -------------------  -------------------  -------------------  ------------------- 
        Headline earnings                (26 365 919)         (44 089 772)            3 189 318           12 695 981 
                                          ===========          ===========          ===========          =========== 
       -------------------------  -------------------  -------------------  -------------------  ------------------- 
 
        Earnings/(losses) per share 
         (ZWL cents) 
       ----------------------------------------------  -------------------  -------------------  ------------------- 
 c.4    Basic                                4 047.33             3 056.53             6 627.19               348.01 
       -------------------------                       -------------------  -------------------  ------------------- 
  Diluted basic                              4 047.33             3 056.53             6 627.19               348.01 
 -------------------------------  -------------------  -------------------  -------------------  ------------------- 
  Headline                                   (159.73)             (267.11)                19.32                76.92 
 -------------------------------  -------------------  -------------------  -------------------  ------------------- 
 
 
   d.         SHARE CAPITAL 
   d.1       Authorised 

The authorised ordinary share capital at 30 June 2020 is at the historical cost figure of ZWL25 000 (2019 - ZWL25 000) comprising 25 million ordinary shares of ZWL0.001 each.

   d.2       Issued and fully paid 

The issued share capital at 30 June 2020 is at the historical cost figure of ZWL16 506 (2019 - ZWL16 506) and inflation adjusted figure of ZWL424 180 (2019 - ZWL424 180) comprising 16 506 050 (2019 - 16 506 050) ordinary shares of ZWL0.001 each in historical cost terms.

   e.         CASH AND CASH EQUIVALENTS 
 
                                        Inflation adjusted                         Historical Cost 
                                         30 June               31 Dec              30 June              31 Dec 
                             -------------------  -------------------  -------------------  ------------------ 
                                            2020                 2019                 2020                2019 
                             -------------------  -------------------  -------------------  ------------------ 
                                             ZWL                  ZWL                  ZWL                 ZWL 
                             -------------------  -------------------  -------------------  ------------------ 
                                                             Restated 
                             -------------------  -------------------  -------------------  ------------------ 
 
 Balances with the Central                                    699 603                                  267 032 
  Bank                               616 622 760                  351          616 622 760                 753 
                             -------------------  -------------------  -------------------  ------------------ 
 Current, nostro accounts                                     419 736                                  160 209 
  and cash                           677 935 252                  453          677 935 252                 897 
                             -------------------  -------------------  -------------------  ------------------ 
                                                              171 604 
 Interbank placements                 75 000 000                  491           75 000 000          65 500 000 
                             -------------------  -------------------  -------------------  ------------------ 
 Expected Credit loss                  (501 964)          (1 148 524)            (501 964)           (438 383) 
  allowance                    -----------------    -----------------    -----------------    ---------------- 
                             -------------------  -------------------  -------------------  ------------------ 
                                       1 369 056            1 289 795            1 369 056             492 304 
                                             048                  771                  048                 267 
                                      ==========           ==========           ==========           ========= 
                             -------------------  -------------------  -------------------  ------------------ 
 
   f.          INVESTMENT PROPERTIES 
 
                                       Inflation adjusted                      Historical Cost 
                                         30 June       31 December             30 June       31 December 
                              ------------------  ----------------  ------------------  ---------------- 
                                            2020              2019                2020              2019 
                              ------------------  ----------------  ------------------  ---------------- 
                                             ZWL               ZWL                 ZWL               ZWL 
                              ------------------  ----------------  ------------------  ---------------- 
                                                          Restated 
                              ------------------  ----------------  ------------------  ---------------- 
 
 At 1 January                        602 234 779        54 888 826         229 867 982        20 950 606 
                              ------------------  ----------------  ------------------  ---------------- 
 Additions/Improvements              121 277 460           920 939          79 840 437           351 515 
                              ------------------  ----------------  ------------------  ---------------- 
                                                           (13 897 
 Disposals                             (262 500)              528)           (262 500)       (5 304 570) 
                              ------------------  ----------------  ------------------  ---------------- 
                                                           509 278           1 053 907           194 387 
 Fair value gains                    640 103 624               434                 444               322 
                              ------------------  ----------------  ------------------  ---------------- 
 Reclassification from 
  non-current assets held 
  for sale                                     -           471 586                   -           180 000 
                              ------------------  ----------------  ------------------  ---------------- 
 Translation gain on change 
  in functional currency                       -        50 572 521                   -        19 303 109 
                              ------------------  ----------------  ------------------  ---------------- 
                               -----------------   ---------------   -----------------   --------------- 
   Closing balances                    1 363 353           602 234           1 363 353           229 867 
                                             363               779                 363               982 
                                      ==========         =========          ==========         ========= 
                              ------------------  ----------------  ------------------  ---------------- 
 

Investment properties comprise commercial and residential properties that are leased out to third parties and land held for future development. No properties were encumbered.

Rental income amounting to ZWL1 722 165 (2019 - ZWL2 495 821) 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.

Included in investment properties are properties measured at ZWL4 252 010 as at 30 June 2020 which were acquired as part of the foreclosure process with marketability restrictions. The Bank has no restrictions on the realisability of all the remaining investment properties and no contractual obligations to purchase, construct or develop the investment properties or for repairs, maintenance and enhancements.

Measurement of fair value

The fair value of the Bank's investment properties as at 30 June 2020 was 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.

Fair value hierarchy

Level 3

The fair value for investment properties of ZWL1 363 353 624 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 the reconciliation between the opening and closing balances for Level 3 fair values:

 
                                       Inflation adjusted                      Historical Cost 
                                         30 June       31 December             30 June       31 December 
                              ------------------  ----------------  ------------------  ---------------- 
                                            2020              2019                2020              2019 
                              ------------------  ----------------  ------------------  ---------------- 
                                             ZWL               ZWL                 ZWL               ZWL 
                              ------------------  ----------------  ------------------  ---------------- 
                                                          Restated 
                              ------------------  ----------------  ------------------  ---------------- 
 
 At 1 January                        602 234 779        54 888 826         229 867 982        20 950 606 
                              ------------------  ----------------  ------------------  ---------------- 
 Additions/Improvements              121 277 460           920 939          79 840 437           351 515 
                              ------------------  ----------------  ------------------  ---------------- 
                                                           (13 897 
 Disposals                             (262 500)              527)           (262 500)       (5 304 570) 
                              ------------------  ----------------  ------------------  ---------------- 
                                                           509 278           1 053 907           194 387 
 Fair value gains                    640 103 624               434                 444               322 
                              ------------------  ----------------  ------------------  ---------------- 
 Reclassification from 
  non-current assets held 
  for sale                                     -           471 586                   -           180 000 
                              ------------------  ----------------  ------------------  ---------------- 
 Translation gain on change 
  in functional currency                       -        50 572 522                   -        19 303 109 
                              ------------------  ----------------  ------------------  ---------------- 
                               -----------------   ---------------   -----------------   --------------- 
   Closing balances                    1 363 353           602 234           1 363 353           229 867 
                                             363               779                 363               982 
                                      ==========         =========          ==========         ========= 
                              ------------------  ----------------  ------------------  ---------------- 
 

The values were arrived at by applying yield rates of 5% on rental values of between ZWL32 - ZWL70 per square metre. Some of 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      Significant unobservable                                     Inter-relationship 
 technique       inputs                                                       between key unobservable 
                                                                              inputs and fair value 
                                                                              measurement 
  The                                                                        The estimated fair 
  investment     *    Weighted average expected market rental growth (5%);   value would increase 
  method                                                                     /(decrease) if: 
  Discounted                                                                  *    expected market rental growth were higher/ (lower); 
  Cash Flows     *    Void period (average 3 months after the end of each 
  was used to         lease); 
  value all                                                                   *    void periods were shorter/(longer); 
  income 
  producing      *    Occupancy rate (55%); and 
  properties.                                                                 *    the occupancy rates were higher /(lower); and 
 
                 *    Average market yield of 10%. 
                                                                              *    the risk adjusted discount rates were lower/ 
                                                                                   (higher). 
 
  The direct 
  comparison 
  method was 
  applied 
  on all 
  residential 
  properties. 
               -----------------------------------------------------------  ---------------------------------------------------------- 
 

Below is an indication of the sensitivity analysis at different discount rates;

Below is an indication of the sensitivity analysis at different discount rates:-

 
                       Change in fair value 
 Change in rate      June 2020   31 December 2019 
                 -------------  ----------------- 
                           ZWL                ZWL 
                 -------------  ----------------- 
            +5%     68 167 668         48 873 124 
                 -------------  ----------------- 
            +3%     40 900 601         29 323 849 
                 -------------  ----------------- 
            +1%     13 633 534          9 774 616 
                 -------------  ----------------- 
            -1%   (13 633 534)        (9 774 616) 
                 -------------  ----------------- 
            -3%   (40 900 601)       (29 323 849) 
                 -------------  ----------------- 
            -5%   (68 167 668)       (48 873 124) 
                 -------------  ----------------- 
 
   g.         CORPORATE GOVERNANCE AND RISK MANAGEMENT 
   1 .         RESPONSIBILITY 

These condensed 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 condensed 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 Bank adheres to some principles of corporate governance derived from the King IV Report, the United Kingdom Combined Code and RBZ corporate governance guidelines. The Bank 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.

   3.1   Directors' attendance at NMB Bank Limited Board meetings 
 
                 Board of      Audit         Risk and       Asset and      Loans         Human            Credit        Head Office       IT & 
                  Directors     Committee     Compliance    Liability      Review        Resources,        Committee    Project           Digital 
                                              Committee     Management     Committee     Remuneration                   - Sub-Committee   Banking 
                                                            Committee                    and                                              Committee 
                                                            (ALCO) &                     Nominations 
                                                            Finance                      Committee 
                                                            Committee 
 Mr. B. A. 
  Chikwanha      2    2                                                                  2    2           2    2                          1    1 
                ---  -------  ---  -------  ---  --------      ---------  ---  -------  ---  ----------  ---  -------  ----  ----------  ---  ------- 
 Mr. B. P. 
  Washaya        2    2                                     2   2                        2    2           2    2                          1    1 
                ---  -------  ---  -------  ---  --------      ---------  ---  -------  ---  ----------  ---  -------  ----  ----------  ---  ------- 
 Mr. J. de la 
  Fargue         2    2                      2    1         2   1                        3    2           2    2        7     7 
                ---  -------  ---  -------  ---  --------      ---------  ---  -------  ---  ----------  ---  -------  ----  ----------  ---  ------- 
 Mr. C. 
  Chikaura       2    2        2    2        2    2         2   2                        3    3           2    2        7     5 
                ---  -------  ---  -------  ---  --------      ---------  ---  -------  ---  ----------  ---  -------  ----  ----------  ---  ------- 
 Mr. J. 
  Tichelaar      2    2                                     2   2          2    2        2    2                                           1    1 
                ---  -------  ---  -------  ---  --------      ---------  ---  -------  ---  ----------  ---  -------  ----  ----------  ---  ------- 
 Mr. B. 
  Ndachena       2    2                                     2   2                                                       7     7 
                ---  -------  ---  -------  ---  --------      ---------  ---  -------  ---  ----------  ---  -------  ----  ----------  ---  ------- 
 Ms. S. 
  Chitehwe       2    2        2    2                       2   2          2    2                                       7     7           1    1 
                ---  -------  ---  -------  ---  --------      ---------  ---  -------  ---  ----------  ---  -------  ----  ----------  ---  ------- 
 Ms. J. 
  Maguranyanga   2    2        2    2        2    2                        2    2        3    3 
                ---  -------  ---  -------  ---  --------      ---------  ---  -------  ---  ----------  ---  -------  ----  ----------  ---  ------- 
 Ms. C. Glover   2    2                      2    2         2   2          2    2                                                         1    1 
                ---  -------  ---  -------  ---  --------      ---------  ---  -------  ---  ----------  ---  -------  ----  ----------  ---  ------- 
 Mr. G. 
  Taputaira      2    2        2    2        2    2                                                                                       1    1 
                ---  -------  ---  -------  ---  --------      ---------  ---  -------  ---  ----------  ---  -------  ----  ----------  ---  ------- 
 
 
 Meetings planned 
 
 
 Meetings attended 
 
   4.         RISK MANAGEMENT 

The Board of Directors has overall responsibility for the establishment and oversight of the Bank's risk management framework. The Board has established the Board Asset and Liability Management Committee (ALCO) and Board Risk and Compliance Committee, which are responsible for defining the Group's risk universe, developing policies and monitoring implementation.

Risk management is linked logically from the level of individual transactions to the Bank 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 Bank'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 Bank'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 independence 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 Bank has in place a Board Loans Review Committee responsible for reviewing the quality of the loan book and adequacy or loan loss provisions.

The Bank has automated credit processes from loan origination, appraisal, monitoring and collections. The system has a robust loan monitoring and reporting module which is critical in managing credit risk. In view of the Bank's move into the mass market, retail credit has become a key area of focus. The Bank has put in place robust personal loan monitoring systems and structures to mitigate retail loan delinquencies.

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 Bank 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.

-- Manage trends in asset and portfolio composition, quality and growth and non-performing loans.

-- Manage concentration risk both in terms of single borrowers or Bank 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 Bank, if appropriate (e.g. in relation to deteriorated credits).

-- Monitors the on-going development and enhancement of credit risk management across the Bank.

   --          Reviews the Internal Credit Rating System. 
   --          On-going championing of the Basel II methodologies across the Bank. 

-- 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.

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 Bank maximizes recoveries from Non-Performing Loans (NPLs).

   4.2       Market risk 

This is the exposure of the Bank'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 Bank has in place a Management Asset and Liability Committee (ALCO) which monitors market risk and recommends the appropriate levels to which the Bank 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 Bank's ability to withstand stressed market conditions. On foreign exchange risk, the bank monitors currency mismatches and makes adjustments depending on exchange rate movement forecast. The mismatches per currency are contained within 5% of the Bank'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.

   4.3       Liquidity risk 

Liquidity risk is the risk of financial loss arising from the inability of the Bank to fund asset increases or meet obligations as they fall due without incurring unacceptable costs or losses. The Bank 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 Bank also actively monitors its loans to deposit ratio against a set threshold in a bid to monitor and limit funding risk. The Bank 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.

The key measure used by the Bank for managing liquidity risk is the ratio of net liquid assets to deposits from customers. The Bank monitors its liquidity ratio in compliance with Banking Regulations to ensure that it is not less than 30% of the liabilities to the public. Liquid assets consist of cash and cash equivalents, short term bank deposits and unencumbered liquid investment securities available for immediate sale.

   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 Bank utilises monthly Key Risk Indicators to monitor operational risk in all units. Further to this, the Bank has an elaborate Operational Loss reporting system in which all incidents with a material impact on the well-being of the Bank are reported to risk management. The risk department conducts periodic risk assessments on all the units within the Bank aimed at identifying the top risks and ways to minimise their impact. There is a Board Risk and Compliance Committee whose function is to ensure that this risk is minimized. The 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 Bank has an independent compliance function which is responsible for identifying and monitoring all compliance issues and ensures the Bank 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 Bank conducts its business. To manage this risk, the Bank 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 Bank 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 Bank'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 Bank 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 Bank in the last quarter of 2016 and detailed below were the final ratings.

4.8.1.1 CAMELS* Ratings

 
                       Latest RBS**   Latest RBS      Previous 
   CAMELS Component       Ratings       Ratings      RAS Ratings 
                        24/11/2016     30/06/2013    31/01/2008 
 Capital Adequacy           2              2             4 
                      -------------  ------------  ------------- 
 Asset Quality              3              4             2 
                      -------------  ------------  ------------- 
 Management                 3              3             3 
                      -------------  ------------  ------------- 
 Earnings                   2              2             3 
                      -------------  ------------  ------------- 
 Liquidity                  3              2             3 
                      -------------  ------------  ------------- 
 Sensitivity to 
  Market Risk               2              2             3 
                      -------------  ------------  ------------- 
 Composite Rating           3              3             3 
                      -------------  ------------  ------------- 
 

*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***   Latest RAS    Previous RBS 
       RAS Component          Ratings        Ratings        Ratings 
                             24/11/2016     30/06/2013    31/01/2008 
 Overall Inherent              High         Moderate       Moderate 
  Risk 
                          --------------  ------------  ------------- 
 Overall Risk Management    Acceptable     Acceptable     Acceptable 
  Systems 
                          --------------  ------------  ------------- 
 Overall Composite           Moderate       Moderate       Moderate 
  Risk 
                          --------------  ------------  ------------- 
 Direction of Overall         Stable         Stable         Stable 
  Composite Risk 
                          --------------  ------------  ------------- 
 

*** RAS stands for Risk Assessment System

4.8.1.3 Summary risk matrix -24 November 2016 on - site examination

 
                    Level of   Adequacy of       Overall     Direction 
    Type of Risk     Inherent   Risk Management   Composite   of Overall 
                     Risk       Systems           Risk        Composite 
                                                              Risk 
Credit              High       Acceptable        High        Stable 
Liquidity           High       Acceptable        High        Stable 
Interest Rate       Moderate   Acceptable        Moderate    Stable 
Foreign Exchange    Low        Acceptable        Low         Stable 
Operational         Moderate   Acceptable        Moderate    Stable 
 Risk 
Legal & Compliance  Moderate   Acceptable        Moderate    Stable 
Reputation          Moderate   Acceptable        Moderate    Stable 
Strategic Risk      High       Acceptable        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.

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 2020 2019

Long term BBB- BB-

The current rating which was due to expire in August 2020 was withdrawn by GCR on 23 June 2020 following the Bank's waiver of external ratings.

The Bank waived the 2020/2021 external ratings in line with a general dispensation extended by the Reserve Bank of Zimbabwe due to the COVID-19 pandemic.

   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.

   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) 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 30 June 2020 was as follows:

 
                                             Inflation adjusted                        Historical Cost 
                                              30 June          31 December             30 June         31 December 
                                  ------------------- 
                                                 2020                 2019                2020                2019 
                                  ------------------- 
                                                  ZWL                  ZWL                 ZWL                 ZWL 
                                  ------------------- 
                                                                  Restated 
Share capital                                 424 180              424 180              16 506              16 506 
Share premium                             752 022 609          752 022 609          31 474 502          31 474 502 
                                            1 237 590                                1 423 285             329 398 
Retained earnings                                 459          569 535 738                 471                 472 
Functional currency translation 
 reserve                                  167 928 479          167 928 479          11 619 648          11 619 648 
                                    -----------------    -----------------  ------------------    ---------------- 
                                            2 157 965       1 489 911                1 466 396             372 509 
                                                  727          006                         127                 128 
 
Less: capital allocated                      (134 796                                 (134 796             (13 706 
 for market and operational                      213)         (35 909 272)                213)                269) 
 risk                               -----------------    -----------------    ----------------    ---------------- 
                                            2 023 169            1 454 001           1 331 599             358 802 
Tier 1 capital                                    514                  734                 914                 859 
Tier 2 capital (subject 
 to limit as per Banking                                                                                   194 315 
 Regulations)                             639 783 224          339 959 624         860 039 063                 734 
 
Fair valuation gains on                                                                                    176 079 
 land and buildings                       587 498 371          284 488 233         807 754 210                 950 
Subordinated debt                                   -              771 144                   -             294 339 
Stage 1 & 2 ECL provisions 
 - (limited to 1,25% of 
 risk weighted assets)                     52 284 853           54 700 247          52 284 853          17 941 445 
                                            2 662 952            1 793 961           2 191 638             553 118 
Tier 1 & 2 capital                                738                  358                 977                 593 
Tier 3 capital (sum of 
 market and operational                       134 796                                  134 796              13 706 
 risk capital)                                    213           35 909 272                 213                 269 
                                    -----------------     ----------------     ---------------     --------------- 
 Total capital base                         2 797 748            1 829 870           2 326 435             566 824 
                                                  951                  630                 190                 862 
                                           ==========           ==========          ==========           ========= 
                                            6 373 617            4 110 168           5 905 896           1 435 315 
Total risk weighted assets                        051                  962                 304                 609 
 
Tier 1 ratio                                   31.74%               35.38%              22.55%              25.00% 
Tier 2 ratio                                   10.04%                 8.2%              14.56%              13.54% 
Tier 3 ratio                                    2.11%                0.87%               2.28%               0.95% 
Total capital adequacy 
 ratio                                         43.90%               44.52%              39.39%              39.49% 
RBZ minimum required                           12.00%               12.00%              12.00%              12.00% 
 
   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. 
 
            Digital Banking        Handles the Bank's Digital Banking products 
                                    including Card and POS services. 
 

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 2020 and 2019.

The following table presents income, profit and certain asset and liability information regarding the Bank's operating segments and service units:

 
                Retail Banking          Corporate                          International            Digital 
 Inflation                                Banking            Treasury            Banking            Banking               Other             Total 
 adjusted 
                           ZWL                ZWL                 ZWL                ZWL                ZWL                 ZWL               ZWL 
For the six 
months ended 
30 June 2020 
Income 
Third party                               113 214                                                                       963 561         1 248 545 
 income             75 785 033                284          14 053 664          3 477 238         78 453 796                 833               848 
Interest and 
 similar                                  (22 725             (11 729 
 expense           (2 641 245)               861)                046)                  -                  -                   -      (37 096 152) 
                  ------------                                                                                                     -------------- 
                             -    ---------------                                          ----------------   -----------------                 - 
                        73 143             90 488   -----------------   ----------------             78 453             963 561         1 211 449 
 Net operating             788                423           2 324 618          3 477 238                796                 833               696 
 income          -------------    ---------------   -----------------   ----------------   ----------------   -----------------   --------------- 
Other material 
non-cash 
items 
Impairment 
 losses on 
 financial 
 assets 
 measured at 
 amortised                                 19 514 
 cost                5 705 854                107                   -                  -                  -                   -        25 219 962 
Depreciation 
 of property 
 and equipment       4 200 614             62 406              53 046              6 997          1 919 673          13 056 952        19 299 688 
Depreciation 
 of right of 
 use assets                  -                  -                   -                  -                  -           1 985 839         1 985 839 
Amortisation 
 of intangible 
 assets                      -                  -                   -                  -                  -           7 238 239         7 238 239 
Segment                 43 542             60 032              10 451             (6 671             71 890             644 313           823 559 
 profit/(loss)             563                521                 114               254)                644                 530               118 
Income tax                                                                                                             (155 504          (155 504 
 charge                      -                  -                   -                  -                  -                400)              400) 
Revaluation of 
 land and 
 buildings,                                                                                                             303 010 
 net of tax                  -                  -                   -                  -                  -                 138       303 010 138 
                --------------  -----------------   -----------------  -----------------   ----------------   -----------------  ---------------- 
Profit/(loss)           43 542             60 032              10 451             (6 671         71 890           791 819                 971 064 
for the year               563                521                 114               254)           644         268 ==========                 856 
                      ========         ==========          ==========         ==========       ==========                               ========= 
As at 30 June 
2020 
Assets and 
liabilities 
Capital 
 expenditure 
 (property 
 and equipment 
 and 
 intangible 
 assets)             1 403 854                  -               8 094                  -            238 680          86 956 406        88 607 034 
                       531 671              1 745             355 877            291 682                              3 994 127         6 933 954 
Total assets               612            576 500                 596                175         15 019 425                 307               615 
Total                  747 608              1 132             269 532            606 155                              1 432 771         4 188 490 
 liabilities               969            422 033                 527                377                  -                 613               518 
 
    6.       SEGMENT INFORMATION 

The following table presents income, profit and certain asset and liability information regarding the Bank's operating segments and service units:

For the six months ended 30 June 2019

 
                            Retail Banking          Corporate                          International            Digital 
  Inflation adjusted                                  Banking           Treasury             Banking            Banking         Unallocated             Total 
                                       ZWL                ZWL                ZWL                 ZWL                ZWL                 ZWL               ZWL 
For the year ended 30 
June 
2019 
Income 
                                   318 294                               172 802                                172 592             383 753         1 291 433 
Third party income                     067        228 889 354                415          15 101 724                724                 670               954 
Interest and similar                                                     (44 024                                                                      (85 307 
 expense                       (7 917 475)       (33 365 170)               743)                   -                  -                   -              388) 
                            --------------                                                                                                     -------------- 
                                         -    ---------------   ----------------   -----------------   ----------------   -----------------                 - 
                                   310 376            195 524            128 777              15 101            172 592             383 753         1 206 126 
                                       592                184                672                 724                724                 670               566 
 Net operating income      ---------------    ---------------   ----------------   -----------------   ----------------   -----------------   --------------- 
Other material non-cash 
 items 
Impairment 
 loss/(reversal) 
 on financial assets 
 measured 
 at amortised cost               3 085 410       (10 981 954)                  -                   -                  -                   -       (7 896 544) 
Depreciation of property 
 and equipment 
 (excluding right-of-use 
 assets)                         8 583 945            847 430            274 501              75 828         15 702 893           9 279 518        34 764 115 
Depreciation of right of 
 use assets                              -                  -                  -                   -                  -           5 967 714         5 967 714 
Amortisation of 
 intangible 
 assets                                  -                  -                  -                   -                  -          22 309 322        22 309 322 
                                   134 816                               105 488                                128 032             206 107           666 649 
Segment profit/(loss)                  844         83 137 690                353           9 066 159                081                 939               066 
                                                                                                                                   (162 136          (162 136 
Income tax charge                        -                  -                  -                   -                  -                398)              398) 
Revaluation of land and 
 buildings, net of tax                   -                  -                  -                   -                  -          13 103 912        13 103 912 
                           ---------------  -----------------    ---------------   -----------------   ----------------   -----------------   --------------- 
Profit for the period              134 816         83 137 690            105 488           9 066 159            128 032              57 075           517 616 
                                       844         ==========                353          ==========                081      453 ==========               580 
                                 =========                             =========                             ==========                             ========= 
As at 31 December 2019 
Assets and liabilities 
Capital expenditure 
 (property 
 and equipment and 
 intangible 
 assets)                        17 271 185                  -            325 791              52 086          2 789 513          73 775 735        94 214 310 
                                   943 848          1 491 232            857 535             290 568                              1 852 456         5 467 188 
Total assets                           936                155                218                 843         31 547 085                 417               654 
                                 1 507 106          1 066 798            684 909             100 884                                333 089         3 692 789 
Total liabilities                      859                326                697                 932                  -                 599               413 
 
   7.         GEOGRAPHICAL INFORMATION 

The Bank operates in one geographical market, Zimbabwe.

Registered Offices

4(th) Floor NMB Centre

Unity Court George Silundika Avenue/

   Cnr 1(st) Street/Kwame Nkrumah Avenue                                Leopold Takawira Street 
   Harare                                                                                    Bulawayo 
   Zimbabwe                                                                               Zimbabwe 
   Telephone       +263 (242) 759651                                        +263 (2922) 70169 
   Facsimile        +263 (242) 759648                                        +263 (2922) 68535 
   Website:          http://www.nmbz.co.zw 
   Email:              enquiries@nmbz.co.zw 

Transfer Secretaries

   In Zimbabwe                                                                          In UK 

First Transfer Secretaries Computershare Services PLC

   1 Armagh Avenue                                                                  The Pavilions 
   (Off Enterprise Road)                                                            Bridgewater Road 
   Eastlea                                                                                    Bristol 
   P O Box 11                                                                            BS 999 ZZ 

Harare United Kingdom

Zimbabwe

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P: V:gb D:20210119 04:22:35