TIDMNMB
RNS Number : 3943D
NMBZ Holdings Ld
28 March 2014
NMBZ HOLDINGS LIMITED
Holding company of
NMB BANK LIMITED (Registered Commercial Bank)
CONDENSED AUDITED RESULTS
FOR THE YEAR ENDED 31 DECEMBER 2013
HIGHLIGHTS
31 December 31 December
------------------------------------ ------------ ------------
2013 2012
------------------------------------ ------------ ------------
Total income (US$) 50 135 302 45 055 751
------------------------------------ ------------ ------------
Operating profit before impairment
charge (US$) 12 693 945 13 987 286
------------------------------------ ------------ ------------
Attributable (loss)/profit (US$) (3 321 823) 7 570 502
------------------------------------ ------------ ------------
Basic (loss)/earnings per share
(US cents) (1.00) 2.7
------------------------------------ ------------ ------------
Total deposits (US$) 211 215 066 191 422 066
------------------------------------ ------------ ------------
Total gross loans and advances
(US$) 189 990 724 152 417 378
------------------------------------ ------------ ------------
Total Shareholders' funds (US$) 43 441 403 30 942 083
------------------------------------ ------------ ------------
Enquiries:
NMBZ HOLDINGS LIMITED
James A Mushore, Group Chief Executive Officer, NMBZ Holdings
Limited jamesm@nmbz.co.zw
Francis Zimuto, Deputy Group Chief Executive Officer, NMBZ
Holdings Limited francisz@nmbz.co.zw
Benefit P Washaya, Managing Director, NMB Bank Limited
benefitw@nmbz.co.zw
Benson Ndachena, Chief Financial Officer, NMBZ Holdings Limited
bensonn@nmbz.co.zw
Website: http://www.nmbz.co.zw
Email: enquiries@nmbz.co.zw
Tel: +263-4-759 651/9
CHAIRMAN'S STATEMENT
INTRODUCTION
The Group's capital raising initiatives resulted in the Group
receiving a total of US$14 831 145 capital from three strategic
foreign partners in June 2013. The net amount was used to
recapitalise the banking subsidiary in order to contribute to the
minimum capital requirements set by the Reserve Bank of Zimbabwe
(RBZ). The increased capital will allow the Bank to underwrite more
business, a prerequisite for the financial services sector to
continue its key role of helping develop the economy.
GROUP RESULTS
Compliance with International Financial Reporting Standards
The consolidated financial statements are prepared in accordance
with International Financial Reporting Standards (IFRS). The
financial statements are prepared in compliance with the provisions
of the Companies Act (Chapter 24:03) and the Banking Act (Chapter
24:20).
Assessment of the Economic Environment
The Zimbabwean economy in the last two quarters of 2013 and
replicated in the first quarter of 2014 has been characterised by
slow economic growth primarily as a result of reduced operating
margins and tight liquidity. The slow-down in the economic growth
has led to increased default risk and the average banking sector
non-performing loans have consequently risen to 15.92% as at 31
December 2013 as per the recent Monetary Policy Statement. Credit
risk has become the critical area that banks and corporates have to
deal with.
Commentary on operating results
The loss before taxation was US$3 951 865 during the period
under review and this gave rise to an attributable loss of US$3 321
823. Total income for the period increased by 11% from a prior year
of US$45 055 751 to US$ 50 135 302 which is split into interest
income of US$33 181 704, fee and commission income of US$14 673
834, net foreign exchange gains of US$1 502 044 and non-interest
income of US$777 720.
Operating expenses amounted to US$25 232 756 and these were 18%
up from prior year and comprise largely of administration expenses,
depreciation and staff related expenditure.
Impairment losses on loans and advances amounted to US$16 645
810 for the current period from a prior year of
US$3 985 062. The Board of Directors took a decision to write
off loans and advances amounting to
US$12 230 408 during the year under review after recovery
efforts had not yielded the anticipated results.
In February 2013, the Reserve Bank of Zimbabwe and participating
members of the Bankers Association of Zimbabwe (BAZ) signed a
Memorandum of Understanding (MoU) which provided limits on bank
charges and interest rates. The measures took effect from 1
February 2013 and the MoU was not renewed in December 2013. Whilst
we recognise the need to keep fees and interest rates as low as
possible, this MoU has had a pronounced effect on the Bank's
profitability for the period under review, as the risk has not been
reduced in line with the controlled returns.
Commentary on the Statement of financial position
The Group's total assets grew by 15% from US$226 533 682 as at
31 December 2012 to US$259 483 112 as at 31 December 2013. The
assets comprised mainly of loans, advances and other accounts
(US$181 316 271), investment securities held to maturity (US$4 685
471), investment in debentures (US$3 984 723), cash and short term
funds (US$48 871 983), investment properties (US$4 385 300),
non-current assets held for sale (US$2 303 300) and property and
equipment (US$7 372 943). Gross loans and advances increased by 25%
from US$152 417 375 as at 31 December 2012 to US$189 990 724 as at
31 December 2013. The Bank's liquidity ratio closed the period at
32.52% and this was above the statutory requirement of 30%.
Capital
The banking subsidiary's capital adequacy ratio at 31 December
2013 calculated in accordance with the guidelines of the RBZ was
17.28% (31 December 2012 - 15.50%). The minimum required by the RBZ
is 12%.
The Group's shareholders' funds have increased by 40% from US$30
942 083 as at 31 December 2012 to
US$43 441 403 as at 31 December 2013 primarily as a result of
the new capital injected into the Group.
Dividend
In view of the attributable loss position for the year, the need
to retain cash in the business and to strengthen the statutory
capital position for the banking subsidiary, the Board has proposed
not to declare a dividend.
CORPORATE SOCIAL INVESTMENTS
The Group is committed to playing an active role in the
communities it serves. Our community investments are channeled into
education, the disadvantaged, vulnerable groups, protection of the
environment, wild life conservation, the arts and various sporting
disciplines.
CORPORATE DEVELOPMENTS
In line with our strategic thrust to offer service excellence to
our valued high net worth individuals and businesses, we
successfully launched the Mobile Banking, Internet Banking, Teller
POS, Aptra Promote and EcoCash integration during the year under
review.
OUTLOOK AND STRATEGY
The Group has since dollarisation secured lines of credit
amounting to US$57 million and these have allowed the Bank to
underwrite more lending business for the benefit of our clients.
Subsequent to year end, the Bank secured a US$10 million line of
credit from a European Development Financial Institution (Proparco)
and the Bank will continue to scout for more international lines of
credit. The Group continues to pursue market opportunities which
take advantage of strong liquidity, without exacerbating credit
risk.
DIRECTORATE
Ms L Majonga, Mr B Ndachena, Mr F Zimuto and Mr J de la Fargue
resigned as directors of NMBZ Holdings Limited and NMB Bank Limited
with effect from 20 November 2013. Mr L Chinyamutangira and Mr F S
Mangozho resigned from the NMB Bank Limited Board with effect from
20 November 2013. Mr B Ndachena, Mr F Zimuto, Mr L Chinyamutangira
and Mr F S Mangozho remain employees of the Group. I would like to
thank them all for their invaluable contribution to the respective
Boards over the years.
Subsequent to year end, Mr B Zwinkels, Ms M Svova, Mr B
Chikwanha, Mr C Ndiaye and Mr D Malik were appointed to the Board
with effect from 31 January 2014. I would like to welcome the new
board members and wish them a fruitful tenure on the Board.
APPRECIATION
I would like to express my profound gratitude and appreciation
to our valued clients, shareholders and the Regulatory Authorities
for their unwavering support during the period under review. I
would also like to thank my fellow Board members, management and
staff for their steadfast commitment and dedication in the face of
an increasingly difficult operating environment.
T N MUNDAWARARA
CHAIRMAN
19 March 2014
AUDITOR'S STATEMENT
These financial results should be read in conjunction with the
complete set of financial statements for the year ended 31 December
2013, which have been audited by KPMG Chartered Accountants
(Zimbabwe) and an unmodified opinion issued thereon. The auditor's
report on the financial statements which forms the basis of these
financial results is available for inspection at the Holding
Company's registered office.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2013
31 December 31 December
--------------------------------- ------- ---------------- ----------------
Note 2013 2012
--------------------------------- ------- ---------------- ----------------
US$ US$
--------------------------------- ------- ---------------- ----------------
Interest income 4 33 181 704 27 543 784
--------------------------------- ------- ---------------- ----------------
Interest expense (13 006 505) (10 050 003)
--------------------------------- ------- ---------------- ----------------
---------- ----------
--------------------------------- ------- ---------------- ----------------
Net interest income 20 175 199 17 493 781
--------------------------------- ------- ---------------- ----------------
Net foreign exchange gains 1 502 044 1 902 337
--------------------------------- ------- ---------------- ----------------
Fee and commission income 5.1 14 673 834 13 016 115
--------------------------------- ------- ---------------- ----------------
--------------- ---------------
--------------------------------- ------- ---------------- ----------------
Revenue 36 351 077 32 412 233
--------------------------------- ------- ---------------- ----------------
Non interest income 5.2 777 720 2 593 515
--------------------------------- ------- ---------------- ----------------
Share of profit of associate 23.1 217 768 434 252
--------------------------------- ------- ---------------- ----------------
Profit on disposal of associate 580 136 -
--------------------------------- ------- ---------------- ----------------
Operating expenditure 6 (25 232 756) (21 452 714)
--------------------------------- ------- ---------------- ----------------
Impairment losses on loans,
advances and debentures 17.3 (16 645 810) (3 985 062)
--------------------------------- ------- ---------------- ----------------
-------------- -------------
--------------------------------- ------- ---------------- ----------------
(Loss)/profit before taxation (3 951 865) 10 002 224
--------------------------------- ------- ---------------- ----------------
Taxation 7 630 042 (2 431 722)
--------------------------------- ------- ---------------- ----------------
-------------- --------------
--------------------------------- ------- ---------------- ----------------
(Loss)/profit for the period (3 321 823) 7 570 502
--------------------------------- ------- ---------------- ----------------
Other comprehensive
income, net of tax - -
--------------------------------- ------- ---------------- ----------------
--------------- -------------
--------------------------------- ------- ---------------- ----------------
Total comprehensive (loss)/
income the period (3 321 823) 7 570 502
--------------------------------- ------- ---------------- ----------------
=========== ==========
--------------------------------- ------- ---------------- ----------------
(Loss)/earnings per share
(US cents)
--------------------------------- ------- ---------------- ----------------
- Basic 9.3 (1.00) 2.70
--------------------------------- ------- ---------------- ----------------
- Diluted basic 9.3 (0.86) 2.69
--------------------------------- ------- ---------------- ----------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2013
31 December 31 December
2013 2012
------------------------------------ ---------- -------------------------- ----------------------------
Note US$ US$
------------------------------------ ---------- -------------------------- ----------------------------
SHAREHOLDERS' FUNDS
------------------------------------ ---------- -------------------------- ----------------------------
Share capital 10.2.1 78 598 78 598
------------------------------------ ---------- -------------------------- ----------------------------
Capital reserves 17 937 471 18 084 902
------------------------------------ ---------- -------------------------- ----------------------------
Retained earnings 9 604 191 12 778 583
------------------------------------ ---------- -------------------------- ----------------------------
------------- -------------
------------------------------------ ---------- -------------------------- ----------------------------
Total equity 27 620 260 30 942 083
------------------------------------ ---------- -------------------------- ----------------------------
Redeemable ordinary shares 11 14 335 253 -
------------------------------------ ---------- -------------------------- ----------------------------
Subordinated loan 12 1 485 890 -
------------------------------------ ---------- -------------------------- ----------------------------
------------- ----------
------------------------------------ ---------- -------------------------- ----------------------------
Total shareholders' funds 43 441 403 30 942 083
------------------------------------ ---------- -------------------------- ----------------------------
LIABILITIES
------------------------------------ ---------- -------------------------- ----------------------------
Deposits and other accounts 13 216 041 709 195 002 633
------------------------------------ ---------- -------------------------- ----------------------------
Current tax liabilities - 588 966
------------------------------------ ---------- -------------------------- ----------------------------
----------- -----------
------------------------------------ ---------- -------------------------- ----------------------------
Total liabilities 216 041 709 195 591 599
------------------------------------ ---------- -------------------------- ----------------------------
----------------- ------------------
------------------------------------ ---------- -------------------------- ----------------------------
Total shareholders' funds and
liabilities 259 483 112 226 533 682
------------------------------------ ---------- -------------------------- ----------------------------
=========== ===========
------------------------------------ ---------- -------------------------- ----------------------------
ASSETS
------------------------------------ ---------- -------------------------- ----------------------------
Cash and cash equivalents 15 48 871 983 58 171 045
------------------------------------ ---------- -------------------------- ----------------------------
Current tax asset 1 739 210 -
------------------------------------ ---------- -------------------------- ----------------------------
Investment securities held to
maturity 14 4 685 471 5 501 963
------------------------------------ ---------- -------------------------- ----------------------------
Investment in debentures 16 3 984 723 -
------------------------------------ ---------- -------------------------- ----------------------------
Loans, advances and other accounts 17 181 316 271 146 599 994
------------------------------------ ---------- -------------------------- ----------------------------
Non-current assets held for
sale 18 2 303 300 2 225 300
------------------------------------ ---------- -------------------------- ----------------------------
Quoted and other investments 335 998 326 106
------------------------------------ ---------- -------------------------- ----------------------------
Investment in associates 23 - 1 025 919
------------------------------------ ---------- -------------------------- ----------------------------
Investment properties 4 385 300 3 115 300
------------------------------------ ---------- -------------------------- ----------------------------
Intangible assets 19 1 664 369 -
------------------------------------ ---------- -------------------------- ----------------------------
Property and equipment 20 7 372 943 8 187 459
------------------------------------ ---------- -------------------------- ----------------------------
Deferred tax assets 2 823 544 1 380 596
------------------------------------ ---------- -------------------------- ----------------------------
--------------- ----------------
------------------------------------ ---------- -------------------------- ----------------------------
Total assets 259 483 112 226 533 682
------------------------------------ ---------- -------------------------- ----------------------------
========== ==========
------------------------------------ ---------- -------------------------- ----------------------------
NMBZ HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2013
Capital Reserve
---------------- ---------- --------------------------------------------------- ---------------- -----------------
Share
---------------- ---------- -------------- ------------------ --------------- ---------------- -----------------
Share Share Share Option Regulatory Retained
Capital Premium Reserve Reserve Profit Total
---------------- ---------- -------------- ------------------ --------------- ---------------- -----------------
US$ US$ US$ US$ US$ US$
---------------- ---------- -------------- ------------------ --------------- ---------------- -----------------
Balances at 1
January 15 737 23 371
2012 78 598 548 45 671 1 023 431 6 486 333 581
---------------- ---------- -------------- ------------------ --------------- ---------------- -----------------
Total
comprehensive
income for the 7 570
year - - - - 7 570 502 502
---------------- ---------- -------------- ------------------ --------------- ---------------- -----------------
Impairment
allowance
for loans and (1 278
advances - - - 1 278 252 252) -
---------------- ---------- -------------- ------------------ --------------- ---------------- -----------------
--------- ------------- ----------------- -------------- --------------- -------------
---------------- ---------- -------------- ------------------ --------------- ---------------- -----------------
Balances at 31
December 15 737 12 778 30 942
2012 78 598 548 45 671 2 301 683 583 083
---------------- ---------- -------------- ------------------ --------------- ---------------- -----------------
Total
comprehensive
income for the (3 321 (3 321
year - - - - 823) 823)
---------------- ---------- -------------- ------------------ --------------- ---------------- -----------------
Impairment
allowance
for loans and
advances - - - (147 431) 147 431 -
---------------- ---------- -------------- ------------------ --------------- ---------------- -----------------
--------- ------------- ------------ ------------- ------------ ------------
---------------- ---------- -------------- ------------------ --------------- ---------------- -----------------
Balances at 31
December 15 737 27 620
2013 78 598 548 45 671 2 154 252 9 604 191 260
---------------- ---------- -------------- ------------------ --------------- ---------------- -----------------
===== ======== ======= ======= ======= =======
---------------- ---------- -------------- ------------------ --------------- ---------------- -----------------
NMBZ HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2013
31 December 31 December
2013 2012
------------------------------------------------ ------------------ --------------------------
US$ US$
------------------------------------------------ ------------------ --------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
------------------------------------------------ ------------------ --------------------------
(Loss)/profit before taxation (3 951 865) 10 002 224
------------------------------------------------ ------------------ --------------------------
Non-cash items:
------------------------------------------------ ------------------ --------------------------
-Depreciation 1 695 856 1 430 956
------------------------------------------------ ------------------ --------------------------
-Impairment losses on loans and advances 16 645 810 3 985 062
------------------------------------------------ ------------------ --------------------------
-Investment properties fair value adjustment (595 450) (2 538 710)
------------------------------------------------ ------------------ --------------------------
-Quoted and other investments fair value
adjustment (9 892) (17 078)
------------------------------------------------ ------------------ --------------------------
-Profit on disposal of property and equipment (30 022) (725)
------------------------------------------------ ------------------ --------------------------
-Impairment reversal on land and buildings (4 803) (77 472)
------------------------------------------------ ------------------ --------------------------
-Non current assets held for sale fair (21 000) -
value adjustment
------------------------------------------------ ------------------ --------------------------
-Profit on disposal of non current assets (1 500) -
------------------------------------------------ ------------------ --------------------------
-Amortisation of intangible assets 130 716 -
------------------------------------------------ ------------------ --------------------------
-Profit on disposal of associate (580 136) -
------------------------------------------------ ------------------ --------------------------
-Share of associate profit (217 768) (434 252)
------------------------------------------------ ------------------ --------------------------
--------------- ---------------
------------------------------------------------ ------------------ --------------------------
Operating cash flows before changes in
operating assets and liabilities 13 059 946 12 350 005
------------------------------------------------ ------------------ --------------------------
Changes in operating assets and liabilities
------------------------------------------------ ------------------ --------------------------
Deposits and other accounts 21 039 076 52 244 855
------------------------------------------------ ------------------ --------------------------
(28 324
Loans, advances and other accounts (51 362 087) 393)
------------------------------------------------ ------------------ --------------------------
Investment debentures (3 984 723) -
------------------------------------------------ ------------------ --------------------------
----------------- -------------
------------------------------------------------ ------------------ --------------------------
Net cash (utilised in)/ generated from
operations (21 247 788) 36 270 467
------------------------------------------------ ------------------ --------------------------
----------------- -------------
------------------------------------------------ ------------------ --------------------------
Taxation
------------------------------------------------ ------------------ --------------------------
Capital gains tax paid (264 574) -
------------------------------------------------ ------------------ --------------------------
Corporate tax paid (2 876 507) (3 959 943)
------------------------------------------------ ------------------ --------------------------
----------------- -----------
------------------------------------------------ ------------------ --------------------------
Net cash (outflow)/ inflow from operating
activities (24 388 869) 32 310 524
------------------------------------------------ ------------------ --------------------------
---------------- -----------
------------------------------------------------ ------------------ --------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
------------------------------------------------ ------------------ --------------------------
Purchase of property and equipment (1 506 369) (2 744 679)
------------------------------------------------ ------------------ --------------------------
Proceeds on disposal of property and equipment 35 634 6 443
------------------------------------------------ ------------------ --------------------------
Acquisition of investment property (769 550) (291 890)
------------------------------------------------ ------------------ --------------------------
Proceeds on disposal of associate 1 850 000 -
------------------------------------------------ ------------------ --------------------------
Expenses on disposal of associate (26 175) -
------------------------------------------------ ------------------ --------------------------
Proceeds on disposal of non- current assets 39 500 -
held for sale
------------------------------------------------ ------------------ --------------------------
Acquisition of intangible assets (1 170 868) -
------------------------------------------------ ------------------ --------------------------
Investment securities held to maturity 816 492 (3 375 306)
------------------------------------------------ ------------------ --------------------------
----------- -----------
------------------------------------------------ ------------------ --------------------------
Net cash outflow from investing activities (731 336) (6 405 432)
------------------------------------------------ ------------------ --------------------------
-------------- -----------
------------------------------------------------ ------------------ --------------------------
Net cash (outflow)/inflow before financing
activities (25 120 205) 5 905 092
------------------------------------------------ ------------------ --------------------------
------------- -----------
------------------------------------------------ ------------------ --------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
------------------------------------------------ ------------------ --------------------------
Proceeds from redeemable ordinary shares 14 831 145 -
------------------------------------------------ ------------------ --------------------------
Share issue expenses (495 892) -
------------------------------------------------ ------------------ --------------------------
Proceeds from subordinated term loan 1 400 000 -
------------------------------------------------ ------------------ --------------------------
Interest capitalized on subordinated term 85 890 -
loan
------------------------------------------------ ------------------ --------------------------
------------- -------------
------------------------------------------------ ------------------ --------------------------
Net cash inflow from financing activities 15 821 143 -
------------------------------------------------ ------------------ --------------------------
------------- -------------
------------------------------------------------ ------------------ --------------------------
Net (decrease)/increase in cash and cash
equivalents (9 299 062) 25 905 092
------------------------------------------------ ------------------ --------------------------
Cash and cash equivalents at the beginning
of the year 58 171 045 32 265 953
-------------------------------------------- -------------- -----------------
------------- ------------
-------------------------------------------- -------------- -----------------
Cash and cash equivalents at the end of
the year (note 15) 48 871 983 58 171 045
-------------------------------------------- -------------- -----------------
========= =========
-------------------------------------------- -------------- -----------------
1. REPORTING ENTITY
The Holding Company is incorporated and domiciled in Zimbabwe
and is an investment holding company. Its registered office is 64
Kwame Nkrumah Avenue, Harare. Its principal operating subsidiary is
engaged in banking.
2. ACCOUNTING CONVENTION
Statement of compliance
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRSs)
and have been prepared in compliance with the provisions of
Companies Act (Chapter 24:03) and the Banking Act (Chapter 24:20).
The consolidated financial statements were approved by the Board of
Directors on 19 March 2014.
2.1 Basis of measurement
The consolidated financial statements have been prepared under
the historical cost convention except for quoted and other
investments, investment properties and financial instruments which
are carried at fair value and land and buildings which are stated
at revalued amount. These consolidated financial statements are
reported in United States of America dollars and rounded to the
nearest dollar.
2.2 Basis of consolidation
The Group financial results incorporate the financial results of
the Company, its subsidiaries and associate companies. Subsidiaries
are investees controlled by the Group. The Group controls an
investee if it is exposed to, or has rights to, variable returns
from its involvement with the investee. The financial statements of
subsidiaries are included in the consolidated financial statements
from the date on which control commences until date when control
ceases. The financial results of the subsidiaries are prepared for
the same reporting period as the parent company, using consistent
accounting policies. All intra-group balances, transactions, income
and expenses; profits and losses resulting from intra-group
transactions that are recognised in assets and liabilities are
eliminated in full. When the Group loses control over a subsidiary,
it derecognises the assets and liabilities of the subsidiary, and
any related non-controlling interest and other components of
equity. Any resulting gain or loss is recognised in profit or loss.
Any interest retained in the former subsidiary is measured at fair
value when control is lost.
An associate is an entity over which the Group has significant
influence, as evidenced by the Group holding directly or indirectly
20% or more of the voting power of the investee, representation on
the Board and direct involvement with the policy making processes
of the investee. The investment in associates is accounted for
using the equity method.
2.3 Comparative financial information
The consolidated financial statements comprise consolidated
statements of financial position, comprehensive income, changes in
equity and cash flows. The comparative consolidated statements of
comprehensive income, changes in equity and cash flows are for
twelve months.
2.4 Use of estimates and judgements
The preparation of consolidated financial statements in
conformity with IFRS requires management to make judgements,
estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income
and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised and in any future periods
affected.
In the process of applying the Group's accounting policies,
management has made the following judgements which have the most
significant effect on the amounts recognised in the consolidated
financial statements:
2.4.1 Deferred tax
Provision for deferred taxation is made using the liability
method in respect of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes. Temporary differences
arising out of the initial recognition of assets or liabilities and
temporary differences on initial recognition of business
combinations that affect neither accounting nor taxable profit are
not recognised. The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the carrying amount
of assets and liabilities, using tax rates enacted or substantively
enacted at the reporting date. Deferred income tax assets and
liabilities are measured at the tax rates that are expected to
apply in the year when the asset is realised or the liability is
settled, based on tax rates (and tax laws) that have been enacted
or substantively enacted at the reporting date.
In determining the amounts used for taxation purposes the
directors referred to applicable effective exchange rates at the
date of acquisition of assets or incurring of liabilities. The
Zimbabwe Revenue Authority (ZIMRA), announced methods to account
for the deferred tax arising on assets purchased in ZWD. These
methods require the preparer to first estimate the equivalent USD
value of those assets at the time of purchase. Since the
measurement of transactions in Zimbabwe dollars in the prior
periods is affected by several economic variables such as mode of
payment and hyperinflation, this is an area where the directors
have had to apply their judgement and acknowledge there could be
significant variations in the results achieved depending on
assumptions made.
2.4.2 Land and buildings
The properties were valued by professional valuers. The valuers
applied the rental yield method and comparable market evidence to
assess fair value of land and buildings. The determined fair value
of land and buildings is most sensitive to the estimated yield as
well as the long term vacancy rate. In addition, the property
market is currently not stable due to liquidity constraints and
hence comparable values are also not stable.
2.4.3 Investment properties
Investment properties were valued by professional valuers. The
professional valuers considered comparable market evidence of
recent sale transactions and those transactions where firm offers
had been made but awaiting acceptance. In addition, the property
market is currently not stable due to liquidity constraints and
hence comparable values are also not stable.
The directors exercised their judgment in determining the
residual values of the other property and equipment which have been
determined as nil.
2.4.4 RBZ Bond
The RBZ Bond was valued at cost as there is currently no market
information to facilitate the application of fair value principles.
There is currently no active market for these bonds.
2.4.5 Impairment losses on loans and advances
The Group reviews all loans and advances at each reporting date
to assess whether an impairment loss should be recorded in profit
or loss. In particular, judgement by management is required in the
estimation of the amount and timing of future cash flows when
determining the impairment loss. In estimating these cash flows,
the Group makes judgements about the borrower's financial situation
and the net realisable value of collateral. These estimates are
based on assumptions about a number of factors and actual results
may differ, resulting in future changes to the allowance. Loans and
advances that have been assessed individually and found not to be
impaired and all individually insignificant loans and advances are
then assessed collectively, in groups of assets with similar risk
characteristics, to determine whether provision should be made due
to incurred loss events for which there is objective evidence but
whose effects are not yet evident. The collective assessment takes
account of data from the loan portfolio (such as credit quality,
levels of arrears, credit utilisation, loan to collateral ratios
etc.), concentrations of risks and economic data.
The impairment loss on loans and advances is disclosed in more
detail under note 8 and note 17.3 below.
2.4.6 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 principal accounting policies applied in the preparation of
these abridged financial statements are set out in Note 2 and 3.
These policies have been consistently applied unless otherwise
stated.
3.1 Financial instruments
3.1.1Classification
Financial assets and liabilities at fair value through profit
and loss include financial assets and liabilities held for trading
i.e. those that the Group principally holds for the purpose of
short-term profit taking as well as those that were, upon initial
recognition, designated by the entity as financial assets or
liabilities at fair value through profit and loss.
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market other than those classified as held-for-trading and the
Group upon initial recognition designates as at fair value through
profit or loss and those the Group upon initial recognition
designates as available-for-sale.
Held-to-maturity investments are non-derivative financial assets
with fixed or determinable payments and fixed maturity that the
Group has the positive intention and ability to hold to
maturity.
Financial assets available-for-sale are non-derivative financial
assets that are designated as available-for- sale or are not
classified as loans and receivables, held-to-maturity investments
or financial assets at fair value through profit or loss.
3.1.2 Recognition
The Group recognises financial assets at fair value through
profit and loss and available for sale assets on the date it
commits to purchase the assets. From this date any gains and losses
arising from changes in fair value of the assets are recognised in
the income statement and other comprehensive income
respectively.
Held-to-maturity investments and loans and receivables are
recognised at cost which is the fair value of the consideration
given on the day that they are transferred to the Group.
3.1.3 Measurement
Financial assets and liabilities are measured initially at fair
value. Subsequent to initial recognition, financial assets and
liabilities measured at fair value through profit and loss and
available-for-sale financial assets are measured at fair value,
except that any instrument that does not have a quoted market price
in an active market and whose fair value cannot be reliably
measured is stated at cost, less impairment losses.
Held-to-maturity investments and loans and receivables are
measured at amortised cost less impairment losses. Amortised cost
is calculated using the effective interest rate method. Premiums
and discounts, including initial transaction costs, are included in
the carrying amount of the related instrument and amortised based
on the effective interest rate of the instrument.
3.1.4 Fair value measurement principles
The fair value of financial instruments is based on their quoted
market price at the reporting date without any deduction for
transaction costs. If a quoted market price is not available, the
fair value of the instrument is estimated using pricing models or
discounted cash flow techniques.
Where discounted cash flow techniques are used, estimated future
cash flows are based on management's best estimates and the
discount rate is a market related rate at the reporting date for an
instrument with similar terms and conditions. Where pricing models
are used, inputs are based on market related measures at the
reporting date.
3.2 Investment properties
Investment properties are stated at fair value. Gains and losses
arising from a change in fair value of investment properties are
recognized in the income statement. The fair value is determined at
the end of each reporting period, by a registered professional
valuer.
3.3 Share - based payments
The Group issues share options to certain employees in terms of
the Employee Share Option Scheme. Share options are measured at
fair value at the date of grant. The fair value determined at the
date of grant of the options is expensed on a straight-line basis
over the vesting period, based on the Group's estimate of shares
that will eventually vest. Fair value is measured using the
Black-Scholes option pricing model. The expected life used in the
model has been adjusted, based on management's best estimate, for
the effects of non-transferability, exercise restrictions and other
behavioural considerations.
3.4 Property and equipment
International Accounting Standard 16 (IAS 16) stipulates that
the residual value and the useful life of an asset must be reviewed
at least each financial year-end. If the residual value of an asset
increases by an amount equal to or greater than the asset's
carrying amount, then the depreciation of the asset ceases.
Depreciation will resume only when the residual value decreases to
an amount below the asset's carrying amount.
3.5 Intangible assets
Intangible assets are initially recognised at cost.
Subsequently, the assets are measured at cost less accumulated
armotisation and any accumulated impairment losses.
4. INTEREST INCOME
31 December 31 December
2013 2012
--------------------------------- --------------- --------------
US$ US$
--------------------------------- --------------- --------------
Loans and advances to banks 2 252 247 1 448 696
--------------------------------- --------------- --------------
Loans and advances to customers 30 615 147 25 554 697
--------------------------------- --------------- --------------
Investment securities 251 949 246 905
--------------------------------- --------------- --------------
Other 62 361 293 486
--------------------------------- --------------- --------------
-------------- -------------
--------------------------------- --------------- --------------
33 181 704 27 543 784
--------------------------------- --------------- --------------
========= =========
--------------------------------- --------------- --------------
5. FEE AND COMMISSION INCOME AND NON-INTEREST INCOME
5.1 FEE AND COMMISSION income
31December 31 December
2013 2012
--------------------------------------- ----------------------- --------------------------
US$ US$
--------------------------------------- ----------------------- --------------------------
Retail Banking customer fees 12 342 153 11 136 084
--------------------------------------- ----------------------- --------------------------
Corporate Banking credit related fees 358 712 256 444
--------------------------------------- ----------------------- --------------------------
Financial guarantee income 208 203 194 302
--------------------------------------- ----------------------- --------------------------
International Banking commissions 1 756 199 1 429 285
--------------------------------------- ----------------------- --------------------------
Other 8 567 -
--------------------------------------- ----------------------- --------------------------
------------- ------------
--------------------------------------- ----------------------- --------------------------
14 673 834 13 016 115
--------------------------------------- ----------------------- --------------------------
========= ========
--------------------------------------- ----------------------- --------------------------
5.2 non-interest income
31 December 31 December
2013 2012
------------------------------------------------ ------------ -----------------------------
US$ US$
------------------------------------------------ ------------ -----------------------------
Quoted and other investments fair value
adjustments 9 892 17 078
------------------------------------------------ ------------ -----------------------------
Fair value adjustment on investment properties 595 450 2 538 710
------------------------------------------------ ------------ -----------------------------
Profit on disposal on non-current assets 1 500 -
held for sale
------------------------------------------------ ------------ -----------------------------
Fair value adjustment on non-current assets 21 000 -
held for sale
------------------------------------------------ ------------ -----------------------------
Profit on disposal of property and equipment 30 022 725
------------------------------------------------ ------------ -----------------------------
Other net operating income 119 856 37 002
------------------------------------------------ ------------ -----------------------------
---------- ----------
------------------------------------------------ ------------ -----------------------------
777 720 2 593 515
------------------------------------------------ ------------ -----------------------------
======= ========
------------------------------------------------ ------------ -----------------------------
6. Operating EXPENDITURE
31 December 31 December
2013 2012
------------------------------------------- ------------- ---------------
US$ US$
------------------------------------------- ------------- ---------------
The operating profit is after charging
the following:-
------------------------------------------- ------------- ---------------
Administration costs 11 496 337 9 540 865
------------------------------------------- ------------- ---------------
Audit fees:
------------------------------------------- ------------- ---------------
- Current year 77 337 51 885
------------------------------------------- ------------- ---------------
- Prior year 128 938 199 356
------------------------------------------- ------------- ---------------
Staff costs - salaries, allowances and
related costs 11 708 375 10 307 124
------------------------------------------- ------------- ---------------
Depreciation 1 695 856 1 430 956
------------------------------------------- ------------- ---------------
Amortisation of intangible assets 130 716 -
------------------------------------------- ------------- ---------------
Impairment reversal on land and buildings (4 803) (77 472)
------------------------------------------- ------------- ---------------
------------ --------------
------------------------------------------- ------------- ---------------
25 232 756 21 452 714
------------------------------------------- ------------- ---------------
======== =========
------------------------------------------- ------------- ---------------
7. taxation
31 December 31 December
2013 2012
-------------------- -------------- --------------
Income tax expense US$ US$
-------------------- -------------- --------------
Current tax 533 722 3 292 170
-------------------- -------------- --------------
AIDS levy 14 609 98 765
-------------------- -------------- --------------
Deferred tax (1 442 947) (959 213)
-------------------- -------------- --------------
Capital gains tax 264 574 -
-------------------- -------------- --------------
------------- -------------
-------------------- -------------- --------------
(630 042) 2 431 722
-------------------- -------------- --------------
======== ========
-------------------- -------------- --------------
8. IMPAIRMENT LOSSES ON LOANS AND ADVANCES
Impairment losses are applied to write off loans and advances in
part or in whole when they are considered partly or wholly
irrecoverable. The aggregate impairment losses which are made
during the year are dealt with as per paragraph 8.3.
8.1 Specific provisions
Specific provisions are made where the repayment of identified
loans and advances is in doubt and reflect estimates of the loss.
Loans and advances are written off against specific provisions once
the probability of recovering any significant amounts becomes
remote
8.2 Portfolio provisions
The portfolio provision relates to the inherent risk of losses
which, although not separately identified, is known to be present
in any loan portfolio.
8.3 Regulatory Guidelines and International Financial Reporting
Standards Requirements
The Banking Regulations 2000 gives guidance on provisioning for
doubtful debts and stipulates certain minimum percentages to be
applied to the respective categories of the loan book.
International Accounting Standard 39, Financial Instruments
Recognition and Measurement (IAS 39), prescribes the provisioning
for impairment losses based on the actual loan losses incurred in
the past applied to the sectoral analysis of book debts and the
discounting of expected cash flows on specific problem
accounts.
The two prescriptions are likely to give different results. The
Group has taken the view that where the IAS 39 charge is less than
the amount provided for in the Banking Regulations, the difference
is recognized directly in equity as a transfer from retained
earnings to a regulatory reserve and where it is more, the full
amount will be charged to the profit or loss.
8.4 Non-performing loans
Interest on loans and advances is accrued to income until such
time as reasonable doubt exists about its collectability,
thereafter and until all or part of the loan is written off,
interest continues to accrue on customers' accounts, but is not
included in income. Such suspended interest is deducted from loans
and advances in the statement of financial position. This policy
meets the requirements of the Banking Regulations 2000 issued by
the RBZ.
9. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the profit
for the year attributable to ordinary equity holders of NMBZ
Holdings Limited by the weighted average number of ordinary shares
outstanding during the year.
Diluted earnings per share is calculated by dividing the profit
attributable to ordinary equity holders of NMBZ Holdings Limited
adjusted for the after tax effect of: (a) any dividends or other
items related to dilutive potential ordinary shares deducted in
arriving at profit or loss attributable to ordinary equity holders
of the parent entity; (b) any interest recognised in the period
related to dilute potential ordinary shares; (c) any other changes
in income or expense that would result from the conversion of the
dilutive potential ordinary shares, by the weighted average number
of ordinary shares outstanding during the year plus the weighted
average number of ordinary shares that would be issued on the
conversion of all the dilutive potential ordinary shares into
ordinary shares.
9.1 (Losses)/earnings
31 December 2013 31 December 2012
-------------------------------- ----------------- -----------------
US$ US$
-------------------------------- ----------------- -----------------
Attributable (losses)/earnings (3 321 823) 7 570 502
-------------------------------- ----------------- -----------------
9.2 Number of shares
9.2.1 Basic earnings per share
31 December 2013 31 December 2012
------------------------------------- ----------------- -----------------
Weighted average number of ordinary
shares for
basic earnings per share 332 569 065 280 710 729
------------------------------------- ----------------- -----------------
9.2.2 Diluted earnings per share
31 December 2013 31 December 2012
---------------------------------- ---------------------------------- --------------------------------
Number of shares at beginning
of period 280 710 729 280 710 729
---------------------------------- ---------------------------------- --------------------------------
Shares issued 103 716 672 -
---------------------------------- ---------------------------------- --------------------------------
Redeemable ordinary shares (note 103 714 287 -
10.2.2)
Shares issued on consolidation 2 385 -
---------------------------------- ---------------------------------- --------------------------------
Share options granted but not
issued 907 200 907 200
---------------------------------- ---------------------------------- --------------------------------
Share options approved but not
granted 167 087 167 087
---------------------------------- ---------------------------------- --------------------------------
--------------- ---------------
---------------------------------- ---------------------------------- --------------------------------
385 501 688 281 785 016
---------------------------------- ---------------------------------- --------------------------------
========= =========
---------------------------------- ---------------------------------- --------------------------------
9.3 (Loss)/earnings per share (US cents)
31 December 2013 31 December 2012
----------------------------------- ----------------- -----------------
Basic (loss)/earnings per share (1.00) 2.70
----------------------------------- ----------------- -----------------
Diluted (loss)/earnings per share (0.86) 2.69
----------------------------------- ----------------- -----------------
10. SHARE CAPITAL
31 December 31 December 31 December 31 December
2013 2012 2013 2012
-------------------- --------------- --------------- ------------ ------------
Shares million Shares million US$ US$
-------------------- --------------- --------------- ------------ ------------
10.1 Authorised
-------------------- --------------- --------------- ------------ ------------
Ordinary shares of
US$0.00028 each 600 350 168 000 98 000
-------------------- --------------- --------------- ------------ ------------
===== ===== ===== =====
-------------------- --------------- --------------- ------------ ------------
At an Extraordinary General Meeting held on 19 February 2013,
the Company approved a share consolidation exercise at a ratio of
10 : 1 and consolidated 3 500 000 000 (3.5 billion) shares with a
nominal value of US$0.000028 per share to 350 000 000 (350 million)
shares with a nominal value of US$0.00028 per share. The Company
also approved an increase in the authorised share capital from 350
million shares with a nominal value of $0.00028 per share to 600
million shares with a nominal value of $0.00028 per share.
10.2 Issued and fully
paid
------------------------ ------------ ------------ ------------ -----------
10.2.1 Ordinary shares
------------------------ ------------ ------------ ------------ -----------
31 December 31 December 31 December 31December
2013 2012 2013 2012
------------------------ ------------ ------------ ------------ -----------
Shares in Shares in US$ US$
millions millions
------------------------ ------------ ------------ ------------ -----------
Ordinary shares 281 281 78 598 78 598
------------------------ ------------ ------------ ------------ -----------
-------- --------- ---------- ---------
------------------------ ------------ ------------ ------------ -----------
281 281 78 598 78 598
------------------------ ------------ ------------ ------------ -----------
===== ====== ====== =====
------------------------ ------------ ------------ ------------ -----------
10.2.2 Redeemable ordinary
shares
---------------------------- ------------ ------------ ------------ ----------------
31 December 31 December 31 December 31December
2013 2012 2013 2012
---------------------------- ------------ ------------ ------------ ----------------
Shares in Shares in US$ US$
millions millions
---------------------------- ------------ ------------ ------------ ----------------
At 1 January - - - -
---------------------------- ------------ ------------ ------------ ----------------
Ordinary shares 104 - 29 040 29 040
---------------------------- ------------ ------------ ------------ ----------------
-------- --------- ---------- ---------
---------------------------- ------------ ------------ ------------ ----------------
104 - 29 040 29 040
---------------------------- ------------ ------------ ------------ ----------------
===== ====== ====== =====
---------------------------- ------------ ------------ ------------ ----------------
Of the unissued ordinary shares of 215 million shares (2012- 69
million), options which may be granted in terms of the NMBZ 2005
Employee Share Option Scheme (ESOS) amounted to nil (2012 - 8 536
096) and out of these nil (2012 - 1 670 869) had not been issued.
As at 31 December 2013, 907 200 (2012 - 907 200) share options out
of the issued had not been exercised.
Share options which may be granted in terms of the 2012 ESOS
amount to 28 071 073 and as at 31 December 2013 no share options
had been allocated from the Scheme.
Subject to the provisions of section 183 of the Companies Act
(Chapter 24:03), the unissued shares are under the control of the
directors.
11 REDEEMABLE ORDINARY SHARES
31 December 31 December 2012
2013
---------------------------------- --------------- ------------------------------------
Redeemable ordinary share capital 29 040 -
(note 10.2.2)
---------------------------------- --------------- ------------------------------------
Share premium 14 306 213 -
---------------------------------- --------------- ------------------------------------
-------------- ------------
---------------------------------- --------------- ------------------------------------
14 335 253 -
---------------------------------- --------------- ------------------------------------
========= =======
---------------------------------- --------------- ------------------------------------
The Company received US$14 831 145 capital from Nederlandse
Financierings-Maatschappij Voor Ontiwikkelingslanden N.V. (FMO),
Norwegian Investment Fund for Developing Countries (Norfund) and
AfricInvest Financial Sector Holdings (AfricInvest) who were
allocated 34 571 429 shares each (total of 103 714 287) for
individually investing US$4 943 715. This amount, net of share
issue expenses, was used to recapitalise the Bank in order to
contribute towards the minimum capital requirements set by the
Reserve Bank of Zimbabwe of US$100 million by 31 December 2020.
NMBZ Holdings Limited (NMBZ) entered into a share buy-back
agreement with Norfund, FMO and AfricInvest, where these three
strategic investors have a right on their own discretion at any
time after the 5(th) anniversary but before the 9(th) anniversary
of its first subscription date, to request NMBZ to buy back all or
part of its NMBZ shares at a price to be determined using the
agreed terms as entailed in the share buy-back agreement. It is a
condition precedent that at any point when the share buy-back is
being considered, the proceeds used to finance the buy-back should
come from the distributable reserves which are over and above the
minimum regulatory capital requirements. Further, no buy-back
option can be exercised by any investor after the 9(th) anniversary
of the effective date.
The share buy-back agreement creates a potential obligation for
NMBZ Holdings Limited to purchase its own instruments. The shares
issued gave rise to a financial liability and are classified as
redeemable ordinary shares.
12. SUBORDINATED TERM LOANS
31 December 2013 31 December
2012
----------------------- ----------------- ----------------
US$ US$
----------------------- ----------------- ----------------
Subordinated term loan 1 400 000 -
----------------------- ----------------- ----------------
Interest capitalised 85 890 -
----------------------- ----------------- ----------------
--------------- ---------------
----------------------- ----------------- ----------------
1 485 890 -
----------------------- ----------------- ----------------
========= =========
----------------------- ----------------- ----------------
During the year, the Bank received a subordinated term loan
amounting to US$1.4 million from
Norfund which attracts an interest rate of LIBOR plus 10% and
has a seven year maturity date from the first disbursement
date.
The above liability would, in the event of the winding up of the
issuer, be subordinated to the claims of depositors and all other
creditors of the issuer. The Group has not had any defaults of the
principal, interest and other breaches with respect to this
subordinated loan during the year ended 31 December 2013.
13. DepositS and other accounts
31 December 2013 31 December
2012
----------------------------------------- ----------------- -----------------------
US$ US$
----------------------------------------- ----------------- -----------------------
11.1 Deposits and other accounts
----------------------------------------- ----------------- -----------------------
Deposits from banks and other financial
institutions 52 338 708 38 969 071
----------------------------------------- ----------------- -----------------------
Current and deposit accounts 158 876 358 152 452 995
----------------------------------------- ----------------- -----------------------
--------------- ---------------
----------------------------------------- ----------------- -----------------------
Total deposits* 211 215 066 191 422 066
----------------------------------------- ----------------- -----------------------
Trade and other payables* 4 826 643 3 580 567
----------------------------------------- ----------------- -----------------------
--------------- ---------------
----------------------------------------- ----------------- -----------------------
216 041 709 195 002 633
----------------------------------------- ----------------- -----------------------
========= =========
----------------------------------------- ----------------- -----------------------
*Deposits and other payables approximate the related carrying
amount due to their short term nature.
13.2 Maturity analysis
31 December 2013 31 December
2012
-------------------- ----------------- ----------------
US$ US$
-------------------- ----------------- ----------------
Less than 1 month 160 919 521 159 048 090
-------------------- ----------------- ----------------
1 to 3 months 28 819 465 8 388 210
-------------------- ----------------- ----------------
3 to 6 months 2 163 310 5 686 674
-------------------- ----------------- ----------------
6 months to 1 year 1 697 507 1 675 259
-------------------- ----------------- ----------------
1 to 5 years 17 615 263 16 623 833
-------------------- ----------------- ----------------
Over 5 years - -
-------------------- ----------------- ----------------
--------------- ---------------
-------------------- ----------------- ----------------
211 215 066 191 422 066
-------------------- ----------------- ----------------
========== ==========
-------------------- ----------------- ----------------
31 December 31 December
2013 2012
---------------------------------- ---------------- ----- ---------------- -------
US$ % US$ %
---------------------------------- ---------------- ----- ---------------- -------
13.3 Sectoral analysis
of
deposits
---------------------------------- ---------------- ----- ---------------- -------
Banks and other financial
institutions 52 338 708 25 38 969 071 20
---------------------------------- ---------------- ----- ---------------- -------
Transport and telecommunications
companies 5 697 396 3 6 040 981 3
---------------------------------- ---------------- ----- ---------------- -------
Mining companies 3 035 997 1 3 221 341 2
---------------------------------- ---------------- ----- ---------------- -------
Municipalities and parastatals 10 509 776 5 18 768 175 10
---------------------------------- ---------------- ----- ---------------- -------
Manufacturing 26 723 790 13 23 888 559 12
---------------------------------- ---------------- ----- ---------------- -------
Distribution 21 091 778 10 17 912 925 9
---------------------------------- ---------------- ----- ---------------- -------
Agriculture 9 731 279 4 9 085 971 5
---------------------------------- ---------------- ----- ---------------- -------
Individuals 28 425 938 13 29 115 145 15
---------------------------------- ---------------- ----- ---------------- -------
Services 32 933 385 16 28 199 595 15
---------------------------------- ---------------- ----- ---------------- -------
Other deposits 20 727 019 10 16 220 303 9
---------------------------------- ---------------- ----- ---------------- -------
--------------- ---- --------------- ------
---------------------------------- ---------------- ----- ---------------- -------
211 215 066 100 191 422 066 100
---------------------------------- ---------------- ----- ---------------- -------
========= === ========= ===
---------------------------------- ---------------- ----- ---------------- -------
14. FINANCIAL INSTRUMENTS
14.1 Investment securities held to maturity
Cost Cost
------------------------------ -------------------- -----------------------
31 December 31 December
2013 2012
------------------------------ -------------------- -----------------------
US$ US$
------------------------------ -------------------- -----------------------
Government and public sector
securities 4 685 471 5 501 963
------------------------------ -------------------- -----------------------
RBZ Bonds 4 685 471 5 501 963
------------------------------ -------------------- -----------------------
------------- -------------
------------------------------ -------------------- -----------------------
Total 4 685 471 5 501 963
------------------------------ -------------------- -----------------------
======== ========
------------------------------ -------------------- -----------------------
The RBZ Bonds are valued at cost as there is currently no market
information to facilitate application of fair value principles.
31 December 2013 31 December 2012
-------------------------------------- ----------------- -----------------
US$ US$
-------------------------------------- ----------------- -----------------
14.2 Maturity analysis of investment
securities held to maturity
-------------------------------------- ----------------- -----------------
Less than 1 month - -
-------------------------------------- ----------------- -----------------
1 to 3 months - -
-------------------------------------- ----------------- -----------------
3 to 6 months 2 424 461 2 271 949
-------------------------------------- ----------------- -----------------
6 months to 1 year 969 004 969 004
-------------------------------------- ----------------- -----------------
1 year to 5 years 1 292 006 2 261 010
-------------------------------------- ----------------- -----------------
Over 5 years - -
-------------------------------------- ----------------- -----------------
------------- -------------
-------------------------------------- ----------------- -----------------
4 685 471 5 501 963
-------------------------------------- ----------------- -----------------
======== ========
-------------------------------------- ----------------- -----------------
15. CASH AND CASH EQUIVALENTS
31 December 2013 31 December 2012
----------------------------------- ----------------- -----------------
US$ US$
----------------------------------- ----------------- -----------------
Balances with the Central Bank 13 480 628 22 671 712
----------------------------------- ----------------- -----------------
Current, nostro accounts and cash 31 391 355 14 999 333
----------------------------------- ----------------- -----------------
Interbank placements 4 000 000 20 500 000
----------------------------------- ----------------- -----------------
------------- -------------
----------------------------------- ----------------- -----------------
48 871 983 58 171 045
----------------------------------- ----------------- -----------------
======== ========
----------------------------------- ----------------- -----------------
15. INVESTMENT IN DEBENTURES
31 December 2013 31 December 2012
------------------------------ ----------------- -----------------
US$ US$
------------------------------ ----------------- -----------------
Debentures 4 787 074 -
------------------------------ ----------------- -----------------
Allowance for impairment loss (802 351) -
------------------------------ ----------------- -----------------
------------- -------------
------------------------------ ----------------- -----------------
3 984 723 -
------------------------------ ----------------- -----------------
======== ========
------------------------------ ----------------- -----------------
During the period under review, a loan with a carrying amount of
US$4 787 074 was converted to convertible debentures of US$4 787
074 with a maturity of 5 years. The debentures are at an interest
of 10% per annum. The Bank has an option to convert the debentures
to equity or redeem the debentures at par on or before the maturity
date of 9 March 2018.
17. LOANS, ADVANCES AND OTHER ACCOUNTS
17.1 Total loans, advances and other accounts
31 December 2013 31 December 2012
---------------------------- ----------------- -----------------
17.1.1 Advances US$ US$
---------------------------- ----------------- -----------------
Fixed term loans 21 711 476 57 124 283
---------------------------- ----------------- -----------------
Local loans and overdrafts 155 821 785 86 823 914
---------------------------- ----------------- -----------------
-------------- --------------
---------------------------- ----------------- -----------------
177 533 261 143 948 197
---------------------------- ----------------- -----------------
Other accounts 3 783 010 2 651 797
---------------------------- ----------------- -----------------
--------------- ---------------
---------------------------- ----------------- -----------------
181 316 271 146 599 994
---------------------------- ----------------- -----------------
========== ==========
---------------------------- ----------------- -----------------
31 December 2013 31 December
2012
------------------------------------ ----------------- ----------------
17.1.2 Maturity analysis US$ US$
------------------------------------ ----------------- ----------------
Less than 1 month 118 711 869 92 386 313
------------------------------------ ----------------- ----------------
1 to 3 months 18 082 940 19 352 134
------------------------------------ ----------------- ----------------
3 to 6 months 3 826 276 3 271 119
------------------------------------ ----------------- ----------------
6 months to 1 year 2 869 815 4 968 635
------------------------------------ ----------------- ----------------
1 to 5 years 46 499 824 32 439 174
------------------------------------ ----------------- ----------------
Over 5 years - -
------------------------------------ ----------------- ----------------
------------ --------------
------------------------------------ ----------------- ----------------
Total advances 189 990 724 152 417 375
------------------------------------ ----------------- ----------------
Allowance for impairment losses on
loans and advances (11 685 201) (7 269 799)
------------------------------------ ----------------- ----------------
Suspended interest (1 574 613) (1 199 379)
------------------------------------ ----------------- ----------------
Allowance for impairment loss on 802 351 -
debentures (note 16)
------------------------------------ ----------------- ----------------
--------------- ---------------
------------------------------------ ----------------- ----------------
177 533 261 143 948 197
------------------------------------ ----------------- ----------------
Other accounts 3 783 010 2 651 797
------------------------------------ ----------------- ----------------
-------------- --------------
------------------------------------ ----------------- ----------------
181 316 271 146 599 994
------------------------------------ ----------------- ----------------
========== =========
------------------------------------ ----------------- ----------------
17.2 Sectoral analysis of utilizations
31 December 31 December
2013 2012
------------------------------ --------------- ----- --------------- -----
US$ % US$ %
------------------------------ --------------- ----- --------------- -----
Manufacturing 32 093 128 17 29 008 475 19
------------------------------ --------------- ----- --------------- -----
Distribution 46 458 831 24 46 673 432 31
------------------------------ --------------- ----- --------------- -----
Agriculture and horticulture 11 208 448 6 9 894 729 6
------------------------------ --------------- ----- --------------- -----
Conglomerates 9 190 491 5 4 683 682 3
------------------------------ --------------- ----- --------------- -----
Services 42 475 414 23 30 216 258 20
------------------------------ --------------- ----- --------------- -----
Mining 1 584 085 1 1 347 402 1
------------------------------ --------------- ----- --------------- -----
Food and beverages 480 502 - 214 163 -
------------------------------ --------------- ----- --------------- -----
Individuals 46 499 825 24 30 379 234 20
------------------------------ --------------- ----- --------------- -----
-------------- ---- -------------- ----
------------------------------ --------------- ----- --------------- -----
189 990 724 100 152 417 375 100
------------------------------ --------------- ----- --------------- -----
========= === ========= ===
------------------------------ --------------- ----- --------------- -----
The material concentration of loans and advances are in the
distribution sector at 24% (2012- 31%) and individuals at 24% (2012
- 20%).
17.3 Allowance for impairment losses on loans, advances and
debentures
31 December 2013 31 December 2012
------------------- ------------------------------------------ ---------------------------------------------
Specific Portfolio Total Specific Portfolio Total
------------------- ------------- ---------- --------------- -------------- -------------- -------------
US$ US$ US$ US$ US$ US$
------------------- ------------- ---------- --------------- -------------- -------------- -------------
At 1 January 7 164 064 105 735 7 269 799 3 354 088 - 3 354 088
------------------- ------------- ---------- --------------- -------------- -------------- -------------
Charge against
profits 16 493 700 152 110 16 645 810 3 879 327 105 735 3 985 062
------------------- ------------- ---------- --------------- -------------- -------------- -------------
Bad debts written (12 230 (12 230
off 408) - 408) (69 351) - (69 351)
------------------- ------------- ---------- --------------- -------------- -------------- -------------
------------ --------- -------------- ------------- ------------- ------------
------------------- ------------- ---------- --------------- -------------- -------------- -------------
At 31 December 11 427 356 257 845 11 685 201 7 164 064 105 735 7 269 799
------------------- ------------- ---------- --------------- -------------- -------------- -------------
======== ====== ========= ======== ======== =======
------------------- ------------- ---------- --------------- -------------- -------------- -------------
17.4 Non-performing loans, advances and debentures
31 December 2013 31 December 2012
----------------------------------------- ----------------- ----------------------
US$ US$
----------------------------------------- ----------------- ----------------------
Total non-performing loans and advances 38 730 878 23 996 312
----------------------------------------- ----------------- ----------------------
Provision for impairment loss on
loans and advances (11 427 356) (7 164 064)
----------------------------------------- ----------------- ----------------------
Allowance for impairment losses on 802 351 -
debentures
----------------------------------------- ----------------- ----------------------
Suspended interest (1 574 613) (1 199 379)
----------------------------------------- ----------------- ----------------------
------------- -------------
----------------------------------------- ----------------- ----------------------
Residue 26 531 260 15 632 869
----------------------------------------- ----------------- ----------------------
======== ========
----------------------------------------- ----------------- ----------------------
The residue on these accounts represents recoverable portions
covered by realisable security.
18. NON-CURRENT ASSETS HELD FOR SALE
31 December 2013 31 December 2012
----------------------------------- ----------------- -------------------------
US$ US$
----------------------------------- ----------------- -------------------------
At 1 January 2013 2 225 300 -
----------------------------------- ----------------- -------------------------
Transfer from investment property 95 000 2 225 300
----------------------------------- ----------------- -------------------------
Disposals (38 000) -
----------------------------------- ----------------- -------------------------
Fair value adjustment 21 000 -
----------------------------------- ----------------- -------------------------
------------- -------------
----------------------------------- ----------------- -------------------------
2 303 300 2 225 300
----------------------------------- ----------------- -------------------------
======== ========
----------------------------------- ----------------- -------------------------
The Group is in possession of land with a fair value of US$2 225
300 at year end. The Group entered into a sale agreement for a
portion of the land in 2012, however the execution and finalisation
of the sale under this contract has been pending throughout 2013,
due to unexpected delays in obtaining certain regulatory approvals.
The disposal process is now expected to be completed within the
next twelve months after the reporting date. The disposal will
improve the Group's cashflows. The fair value adjustment on
recognition as non-current asset held for sale is included under
non-interest income (note 5).
19 INTANGIBLE ASSETS
US$
---------------------------------------------- ------------
Cost
---------------------------------------------- ------------
Balance at 1 January 2013 -
---------------------------------------------- ------------
Reclassification from property and equipment 740 615
---------------------------------------------- ------------
Acquisitions 1 170 868
---------------------------------------------- ------------
-----------
---------------------------------------------- ------------
At 31 December 2013 1 911 483
---------------------------------------------- ------------
-----------
---------------------------------------------- ------------
Accumulated amortisation and impairment
---------------------------------------------- ------------
Balance at 1 January 2013 -
---------------------------------------------- ------------
Reclassification from property and equipment 116 398
---------------------------------------------- ------------
Amortisation for the year 130 716
---------------------------------------------- ------------
-----------
---------------------------------------------- ------------
At 31 December 2013 247 114
---------------------------------------------- ------------
-----------
---------------------------------------------- ------------
Carrying amount
---------------------------------------------- ------------
-----------
---------------------------------------------- ------------
At 31 December 2013 1 664 369
---------------------------------------------- ------------
========
---------------------------------------------- ------------
During the year, computer software amounting to US$740 615 was
reclassified from computer
equipment to intangible assets in order to achieve fair
presentation.
20. PROPERTY AND EQUIPMENT
Computer Motor Vehicles Furniture Freehold Total
and equipment Land Buildings
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
US$ US$ US$ US$ US$
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
COST
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
8 507
At 1 January 2012 1 524 271 1 766 515 2 478 701 2 738 252 739
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
2 744
Additions 920 559 1 556 092 268 028 - 679
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
Revaluation gain - - - 77 472 77 472
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
Reclassifications 251 703 - (251 703) - -
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
Disposals - (250) (10 825) - (11 075)
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
--------------- ------------- ------------- ------------ --------------
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
11 318
At 1 January 2013 2 696 533 3 322 357 2 484 201 2 815 724 815
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
1 506
Additions 340 606 682 969 459 413 23 381 369
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
Revaluation gain - - - 4 803 4 803
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
Transfer to intangible
assets (740 615) - - - (740 615)
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
Disposals (9 862) (2 198) (29 250) - (41 310)
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
-------------- ------------- -------------- -------------- -------------
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
12 048
At 31 December 2012 2 286 662 4 003 128 2 914 364 2 843 908 062
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
-------------- -------------- -------------- ------------- --------------
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
ACCUMULATED
DEPRECIATON
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
1 705
At 1 January 2012 469 976 323 201 912 287 293 757
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
1 430
Charge for the year 310 381 662 445 412 700 45 430 956
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
Disposals - (250) (5 107) - (5 357)
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
Transfer to intangible
assets 65 826 - (65 826) - -
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
----------- ----------- ----------- ---------- ------------
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
3 131
At 1 January 2013 846 183 985 396 1 254 054 45 723 356
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
1 695
Charge for the year 308 164 910 994 435 589 41 109 856
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
Transfer to intangible
assets (116 398) - - - (116 398)
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
Reclassifications (8 637) (1966) (25 092) - (35 695)
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
--------------- --------------- --------------- ---------------- --------------
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
4 675
At 31 December 2013 1 029 312 1 894 424 1 664 551 86 832 119
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
----------------- -------------- -------------- ---------------- -------------
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
Carrying amount
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
7 372
At 31 December 2013 1 257 350 2 108 704 1 249 813 2 757 076 943
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
======== ======== ======== ======== =======
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
8 187
At 1 January 2013 1 850 350 2 336 961 1 230 147 2 770 001 459
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
======== ======= ====== ====== =======
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
6 801
At 1 January 2012 1 054 295 1 443 314 1 566 414 2 737 959 982
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
======== ======== ====== ====== =======
------------------------ ------------------ ---------------- ---------------- ----------------- ---------------
Immovable properties were revalued as at 31 December 2013 on the
basis of valuation carried out by the 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 policy section. All movable
assets are carried at their carrying amounts which are arrived at
by the application of a depreciation charge on their cost values
over the useful lives of the assets.
The valuation of land and buildings was arrived by applying
yields rates of 9.5% on rental levels of US$6 to US$8 per square
metre.
The carrying cost less accumulated depreciation of the land and
buildings had revaluations not been performed would be $3 419 586
as at 31 December 2013 (2012 - $3 471 179).
21. CAPITAL COMMITMENTS
31 December 2013 31 December 2012
------------------------------------ ----------------- -----------------
US$ US$
------------------------------------ ----------------- -----------------
Capital expenditure contracted for 1 157 882 -
------------------------------------ ----------------- -----------------
Capital expenditure authorised but
not yet contracted for 2 294 978 5 739 655
------------------------------------ ----------------- -----------------
------------- -------------
------------------------------------ ----------------- -----------------
3 452 860 5 739 655
------------------------------------ ----------------- -----------------
======== ========
------------------------------------ ----------------- -----------------
The capital expenditure will be funded from the Group's own
resources.
22. CONTINGENT LIABILITIES
31 December 2013 31December 2012
--------------------- ----------------- ----------------
US$ US$
--------------------- ----------------- ----------------
Guarantees 869 778 7 827 744
--------------------- ----------------- ----------------
Commitments to lend 41 195 923 29 326 528
--------------------- ----------------- ----------------
-------------- --------------
--------------------- ----------------- ----------------
42 065 701 37 154 272
--------------------- ----------------- ----------------
========= =========
--------------------- ----------------- ----------------
23. INVESTMENT IN ASSOCIATE
23.1 Investment in African Century Limited
The Group had a 24.79% interest in African Century Limited,
which is involved in the provision of lease finance.
The Investment was disposed of on the 29(th) of May 2013 for a
consideration of US$1 850 000.
African Century Limited is a company that is not listed on any
public exchange. The following table illustrates
summarised audited financial information of the Group's
investment in African Century Limited.
31 December 2013 31December 2012
-------------------------------------------- ------------------------ -----------------------
US$ US$
-------------------------------------------- ------------------------ -----------------------
Associate's statement of financial
position
-------------------------------------------- ------------------------ -----------------------
Current assets - 20 317 075
-------------------------------------------- ------------------------ -----------------------
Non-current assets - 228 923
-------------------------------------------- ------------------------ -----------------------
Current liabilities - (1 845 208)
-------------------------------------------- ------------------------ -----------------------
Non-current liabilities - (14 562 352)
-------------------------------------------- ------------------------ -----------------------
-------------- --------------
-------------------------------------------- ------------------------ -----------------------
Equity - 4 138 438
-------------------------------------------- ------------------------ -----------------------
======== ========
-------------------------------------------- ------------------------ -----------------------
Share of associate's equity - 1 025 919
-------------------------------------------- ------------------------ -----------------------
======= =======
-------------------------------------------- ------------------------ -----------------------
Associate's revenue and profit
-------------------------------------------- ------------------------ -----------------------
Revenue 2 208 806 3 648 431
-------------------------------------------- ------------------------ -----------------------
======== ========
-------------------------------------------- ------------------------ -----------------------
Profit 878 451 1 751 722
-------------------------------------------- ------------------------ -----------------------
======== ========
-------------------------------------------- ------------------------ -----------------------
Share of associate's profit 217 768 434 252
-------------------------------------------- ------------------------ -----------------------
======== ========
-------------------------------------------- ------------------------ -----------------------
Reconciliation of carrying amount
of investment
in Associate:
-------------------------------------------- ------------------------ -----------------------
31 December 31 December
2013 2012
-------------------------------------------- ------------------------ -----------------------
Balance at 1 January 1 025 919 591 667
-------------------------------------------- ------------------------ -----------------------
Share of profit of associate 217 768 434 252
-------------------------------------------- ------------------------ -----------------------
Disposal of investment (1 243 687) -
-------------------------------------------- ------------------------ -----------------------
------------- -------------
-------------------------------------------- ------------------------ -----------------------
Balance at 31 December - 1 025 919
-------------------------------------------- ------------------------ -----------------------
======== =========
-------------------------------------------- ------------------------ -----------------------
23.2 Investment in Altiwave Investments (Private) Limited
NMB Bank Limited has a 25.5% interest in Altiwave Investments
(Private) Limited which is the holding company of Lobels Holdings
(Private) Limited. The investment arose from a Scheme of
Arrangement agreed to by Lobels Holdings (Private) Limited
shareholders and creditors (banks, trade and employees). Lobels
Holdings (Private) Limited is in the bread and confectionery
business.
Altiwave Investments (Private) Limited is a company that is not
listed on any public exchange.
31 December 31 December
2013 2012
US$ US$
----------------------------------- ------------------------- ----------------------
Reconciliation of carrying amount
of investment in Associate:
----------------------------------- ------------------------- ----------------------
Balance at 1 January - 591 667
----------------------------------- ------------------------- ----------------------
Increase in investment 510 -
----------------------------------- ------------------------- ----------------------
Share of profit of associate 495 181 -
----------------------------------- ------------------------- ----------------------
Allowance for impairment (495 691) -
----------------------------------- ------------------------- ----------------------
------------- -------------
------------------------------------------------------------- ----------------------
Balance at 31 December - -
----------------------------------- ------------------------- ----------------------
======== ========
------------------------------------------------------------- ----------------------
24. EXCHANGE RATES
The following exchange rates have been used to translate the
foreign currency balances to United States dollars at period
end:-
Mid-rate Mid-rate
------------------------ ----- ------------ ------------
31 December 31 December
2013 2012
------------------------ ----- ------------ ------------
US$ US$
------------------------ ----- ------------ ------------
British Pound Sterling GBP 1.6014 1.6156
------------------------ ----- ------------ ------------
South African Rand ZAR 9.9487 8.4776
------------------------ ----- ------------ ------------
European Euro EUR 1.3697 1.3200
------------------------ ----- ------------ ------------
Botswana Pula BWP 8.5034 7.7721
------------------------ ----- ------------ ------------
25. EVENTS AFTER REPORTING DATE
25.1 Monetary Policy Statement
The Reserve Bank of Zimbabwe announced the extension of the
period for complying with the minimum capital of US$100 million for
commercial banks to 31 December 2020 in the Monetary Policy
Statement that was presented on 29 January 2014. However, all
banking institutions are required to submit to the Reserve Bank of
Zimbabwe their comprehensive recapitalisation plans to meet the new
deadline by 30 June 2014.
NMB BANK LIMITED
STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2013
31 December 2013 31 December 2012
----------------------------------- ------ ------------------------------ ------------------------------
Note
----------------------------------- ------ ------------------------------ ------------------------------
US$ US$
----------------------------------- ------ ------------------------------ ------------------------------
Interest income 33 181 704 27 305 825
------------------------------------------- ------------------------------ ------------------------------
Interest expense (13 006 789) (10 053 589)
------------------------------------------- ------------------------------ ------------------------------
-------------- --------------
----------------------------------- ------ ------------------------------ ------------------------------
Net interest income 20 174 915 17 252 236
------------------------------------------- ------------------------------ ------------------------------
Fee and commission income 14 673 834 13 016 115
------------------------------------------- ------------------------------ ------------------------------
Net foreign exchange gains 1 502 044 1 902 337
------------------------------------------- ------------------------------ ------------------------------
-------- --------
----------------------------------- ------ ------------------------------ ------------------------------
Revenue 36 350 793 32 170 688
------------------------------------------- ------------------------------ ------------------------------
Non-interest income a 761 579 2 571 479
----------------------------------- ------ ------------------------------ ------------------------------
Share of profit of associate - -
----------------------------------- ------ ------------------------------ ------------------------------
Operating expenditure b (25 271 736) (20 655 380)
----------------------------------- ------ ------------------------------ ------------------------------
Impairment losses on loans,
advances and debentures (16 645 810) (3 985 062)
------------------------------------------- ------------------------------ ------------------------------
-------------- --------------
----------------------------------- ------ ------------------------------ ------------------------------
(Loss)/profit before taxation (4 805 174) 10 101 725
------------------------------------------- ------------------------------ ------------------------------
Taxation 973 175 (2 452 323)
------------------------------------------- ------------------------------ ------------------------------
-------------- -------------
----------------------------------- ------ ------------------------------ ------------------------------
(Loss)/profit for the period (3 831 999) 7 649 402
------------------------------------------- ------------------------------ ------------------------------
----------- ------------
----------------------------------- ------ ------------------------------ ------------------------------
Other comprehensive income, - -
net of tax
----------------------------------- ------ ------------------------------ ------------------------------
------------ ------------
----------------------------------- ------ ------------------------------ ------------------------------
Total comprehensive (loss)/income
for the period (3 831 999) 7 649 402
------------------------------------------- ------------------------------ ------------------------------
============= ===========
----------------------------------- ------ ------------------------------ ------------------------------
(Loss)/earnings per share (US
cents):
----------------------------------- ------ ------------------------------ ------------------------------
-Basic c (23.22) 46.36
----------------------------------- ------ ------------------------------ ------------------------------
NMB BANK LIMITED
STATEMENT OF FINANCIAL POSITION
As at 31 December 2013
31 December 2013 31 December 2012
-------------------------------- ------ ------------------------------------ ----------------------------------
Note US$ US$
-------------------------------- ------ ------------------------------------ ----------------------------------
SHAREHOLDER'S FUNDS
-------------------------------- ------ ------------------------------------ ----------------------------------
Share capital d 16 506 16 502
-------------------------------- ------ ------------------------------------ ----------------------------------
Share Premium 31 474 502 15 577 932
---------------------------------------- ------------------------------------ ----------------------------------
Regulatory Reserve 2 154 252 2 301 683
---------------------------------------- ------------------------------------ ----------------------------------
Retained earnings 8 802 979 12 487 547
---------------------------------------- ------------------------------------ ----------------------------------
------------- -------------
-------------------------------- ------ ------------------------------------ ----------------------------------
Total shareholder's funds 42 448 239 30 383 664
---------------------------------------- ------------------------------------ ----------------------------------
LIABILITIES
-------------------------------- ------ ------------------------------------ ----------------------------------
Deposits and other liabilities 216 020 406 194 981 244
---------------------------------------- ------------------------------------ ----------------------------------
Current tax liabilities - 728 620
---------------------------------------- ------------------------------------ ----------------------------------
Subordinated term loan 1 485 890 -
-------------------------------- ------ ------------------------------------ ----------------------------------
-------------- --------------
-------------------------------- ------ ------------------------------------ ----------------------------------
Total liabilities 217 506 296 195 709 864
---------------------------------------- ------------------------------------ ----------------------------------
-------------- --------------
-------------------------------- ------ ------------------------------------ ----------------------------------
Total shareholder's funds
and liabilities 259 954 535 226 093 528
---------------------------------------- ------------------------------------ ----------------------------------
========= =========
-------------------------------- ------ ------------------------------------ ----------------------------------
ASSETS
-------------------------------- ------ ------------------------------------ ----------------------------------
Cash and cash equivalents e 48 871 983 58 171 045
-------------------------------- ------ ------------------------------------ ----------------------------------
Current tax assets 1 657 722 -
-------------------------------- ------ ------------------------------------ ----------------------------------
Investment securities held
to maturity 4 685 471 5 501 963
---------------------------------------- ------------------------------------ ----------------------------------
Amount owing from holding
company 747 044 956 161
---------------------------------------- ------------------------------------ ----------------------------------
Investment in debentures 3 984 723 -
-------------------------------- ------ ------------------------------------ ----------------------------------
Loans, advances and other
assets 181 371 734 146 485 358
---------------------------------------- ------------------------------------ ----------------------------------
Non-current assets held for
sale 2 303 300 2 225 300
---------------------------------------- ------------------------------------ ----------------------------------
Unquoted investments 76 202 82 513
---------------------------------------- ------------------------------------ ----------------------------------
Investment in associate - -
-------------------------------- ------ ------------------------------------ ----------------------------------
Intangible assets 1 664 369 -
-------------------------------- ------ ------------------------------------ ----------------------------------
Investment properties f 4 385 300 3 115 300
-------------------------------- ------ ------------------------------------ ----------------------------------
Property and equipment 7 372 943 8 187 459
---------------------------------------- ------------------------------------ ----------------------------------
Deferred tax asset 2 833 744 1 368 429
---------------------------------------- ------------------------------------ ----------------------------------
--------------- ---------------
-------------------------------- ------ ------------------------------------ ----------------------------------
Total assets 259 954 535 226 093 528
---------------------------------------- ------------------------------------ ----------------------------------
========= =========
--------------------------------------- ------------------------------------ ----------------------------------
NMB BANK LIMITED
STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2013
Capital Reserves
--------------- --------------------------- ----------------------------------------------------- --------------- ------------------------
Share Capital Share Premium Regulatory Retained Total
Reserve Earnings
--------------- --------------------------- ----------------------------- ---------------------- --------------- ------------------------
US$ US$ US$ US$ US$
--------------- --------------------------- ----------------------------- ---------------------- --------------- ------------------------
Balances as
at 1 January 20 847
2012 16 501 13 690 931 1 023 431 6 116 397 260
--------------- --------------------------- ----------------------------- ---------------------- --------------- ------------------------
Total
comprehensive
income for
the year - - - 7 649 402 7 649 402
--------------- --------------------------- ----------------------------- ---------------------- --------------- ------------------------
Shares issued 1 1 887 001 - - 1 887 002
--------------- --------------------------- ----------------------------- ---------------------- --------------- ------------------------
Impairment
allowance for
loans and (1 278
advances - - 1 278 252 252) -
--------------- --------------------------- ----------------------------- ---------------------- --------------- ------------------------
--------- -------- ---------- ----------- -------------
--------------- --------------------------- ----------------------------- ---------------------- --------------- ------------------------
Balances as
at 31
December 12 487 30 383
2012 16 502 15 577 932 2 301 683 547 664
--------------- --------------------------- ----------------------------- ---------------------- --------------- ------------------------
Total
comprehensive
income for (3 831 (3 831
the year - - - 999) 999)
--------------- --------------------------- ----------------------------- ---------------------- --------------- ------------------------
Shares issued 4 15 896 570 - - 15 896 574
--------------- --------------------------- ----------------------------- ---------------------- --------------- ------------------------
Impairment
allowance for
loans and
advances - - (147 431) 147 431 -
--------------- --------------------------- ----------------------------- ---------------------- --------------- ------------------------
------- ------------ ------------ -------------- -------------
--------------- --------------------------- ----------------------------- ---------------------- --------------- ------------------------
Balance at 31
December 2013 16 506 31 474 502 2 154 252 8 802 979 42 448 239
--------------- --------------------------- ----------------------------- ---------------------- --------------- ------------------------
====== ========== ========== ========== ==========
--------------- --------------------------- ----------------------------- ---------------------- --------------- ------------------------
NMB BANK LIMITED
STATEMENT OF CASH FLOWS
for the year ended 31 December 2013
31 December 31 December
2013 2012
------------------------------------------------- ----------------- -----------------
US$ US$
------------------------------------------------- ----------------- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES
------------------------------------------------- ----------------- -----------------
(Loss)/profit before taxation (4 805 174) 10 101 725
------------------------------------------------- ----------------- -----------------
Non-cash items
------------------------------------------------- ----------------- -----------------
-Impairment losses on loans and advances 16 645 810 3 985 062
------------------------------------------------- ----------------- -----------------
-Non current assets held for sale fair (21 000) -
value adjustment
------------------------------------------------- ----------------- -----------------
-Investment properties fair value adjustment (595 450) (2 538 710)
------------------------------------------------- ----------------- -----------------
-Loss on disposal of property and equipment (30 022) (725)
------------------------------------------------- ----------------- -----------------
-Profit on disposal of non-current assets (1 500) -
held for sale
------------------------------------------------- ----------------- -----------------
-Quoted and other investments fair value
adjustment 6 311 (1 235)
------------------------------------------------- ----------------- -----------------
-Impairment reversal on land and buildings (4 803) (77 472)
------------------------------------------------- ----------------- -----------------
-Depreciation 1 695 856 1 430 956
------------------------------------------------- ----------------- -----------------
-Amortisation of intangible assets 130 716 -
------------------------------------------------- ----------------- -----------------
------------- -------------
------------------------------------------------- ----------------- -----------------
Operating cash flows before changes in
operating assets and liabilities 13 020 744 12 899 601
------------------------------------------------- ----------------- -----------------
Changes in operating assets and liabilities
------------------------------------------------- ----------------- -----------------
Deposits and other liabilities 21 039 162 52 112 191
------------------------------------------------- ----------------- -----------------
Amount owing from holding company 209 117 (956 161)
------------------------------------------------- ----------------- -----------------
Investment in debentures (3 984 723) -
------------------------------------------------- ----------------- -----------------
Loans, advances and other assets (51 532 186) (29 896 096)
------------------------------------------------- ----------------- -----------------
------------- ----------------
---
------------------------------------------------- ----------------- -----------------
Net cash (utilized in)/generated from
operations (21 247 886) 34 159 535
------------------------------------------------- ----------------- -----------------
--------------- ---------------
------------------------------------------------- ----------------- -----------------
Taxation
------------------------------------------------- ----------------- -----------------
Capital gains tax paid (1 975) -
------------------------------------------------- ----------------- -----------------
Corporate tax paid (2 876 507) (3 736 013)
------------------------------------------------- ----------------- -----------------
--------------- ---------------
------------------------------------------------- ----------------- -----------------
Net cash (outflow)/ inflow from operating
activities (24 126 368) 30 423 522
------------------------------------------------- ----------------- -----------------
--------------- ---------------
------------------------------------------------- ----------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES
------------------------------------------------- ----------------- -----------------
Proceeds on disposal of non current assets 39 500 -
held for sale
------------------------------------------------- ----------------- -----------------
Proceeds on disposal of property and equipment 35 637 6 443
------------------------------------------------- ----------------- -----------------
Purchase of intangible assets (1 170 868) -
------------------------------------------------- ----------------- -----------------
Purchase of property and equipment (1 506 369) (2 744 679)
------------------------------------------------- ----------------- -----------------
Purchase and improvements to investment
property (769 550) (291 890)
------------------------------------------------- ----------------- -----------------
Maturity/(acquisition) of investment securities
held to maturity 816 492 (3 375 306)
------------------------------------------------- ----------------- -----------------
---------------- ----------------
------------------------------------------------- ----------------- -----------------
Net cash outflow from investing activities (2 555 158) (6 405 432)
------------------------------------------------- ----------------- -----------------
--------------- ---------------
------------------------------------------------- ----------------- -----------------
Net cash (outflow)/ inflow before financing
activities (26 681 526) 24 018 090
------------------------------------------------- ----------------- -----------------
--------------- ---------------
------------------------------------------------- ----------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES
------------------------------------------------- ----------------- -----------------
Proceeds from subordinated term loan 1 400 000 -
------------------------------------------------- ----------------- -----------------
Interest capitalised on subordinated term 85 890 -
loan
------------------------------------------------- ----------------- -----------------
Proceeds from issue of shares 15 896 574 1 887 002
------------------------------------------------- ----------------- -----------------
-------------- --------------
------------------------------------------------- ----------------- -----------------
Net cash inflow from financing activities 17 382 464 1 887 002
------------------------------------------------- ----------------- -----------------
-------------- --------------
------------------------------------------------- ----------------- -----------------
Net (decrease)/ increase in cash and cash
equivalents (9 299 062) 25 905 092
------------------------------------------------- ----------------- -----------------
Cash and cash equivalents at the beginning
of the year 58 171 045 32 265 953
------------------------------------------------- ----------------- -----------------
-------------- --------------
------------------------------------------------- ----------------- -----------------
Cash and cash equivalents at the end of
the year 48 871 983 58 171 045
------------------------------------------------- ----------------- -----------------
========= =========
------------------------------------------------- ----------------- -----------------
NMB BANK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2013
There are no material differences between the Bank and the Group
as the Bank is the principal operating subsidiary of the Group. The
notes to the financial statements under NMBZ Holdings Limited are
therefore the same as those of the Bank in every material
respect.
a. NON-INTEREST income
31 December 31 December 2012
2013
-------------------------------------- ------------ --------------------------------
US$ US$
-------------------------------------- ------------ --------------------------------
Quoted and other investments fair
value adjustments (6 311) 1 235
-------------------------------------- ------------ --------------------------------
Profit on disposal of non-current 1 500 -
assets held for sale
-------------------------------------- ------------ --------------------------------
Profit on disposal of property
and equipment 30 022 725
-------------------------------------- ------------ --------------------------------
Fair value adjustment of non-current 21 000 -
assets held for sale
-------------------------------------- ------------ --------------------------------
Fair value adjustment on investment
properties 595 450 2 538 710
-------------------------------------- ------------ --------------------------------
Other operating income 119 918 30 809
-------------------------------------- ------------ --------------------------------
---------- -----------
-------------------------------------- ------------ --------------------------------
761 579 2 571 479
-------------------------------------- ------------ --------------------------------
======= =======
-------------------------------------- ------------ --------------------------------
b. Operating EXPENDITURE
31 December 31 December
------------------------------------ ------------- -------------
2013 2012
------------------------------------ ------------- -------------
US$ US$
------------------------------------ ------------- -------------
The operating profit is after
charging the following:
------------------------------------ ------------- -------------
Administration costs 12 210 534 9 540 864
------------------------------------ ------------- -------------
Audit fees
------------------------------------ ------------- -------------
- Current year 77 337 51 885
------------------------------------ ------------- -------------
- Prior year 128 938 199 356
------------------------------------ ------------- -------------
Impairment reversal on land
and buildings (4 803) (77 472)
------------------------------------ ------------- -------------
Depreciation 1 695 856 1 430 956
------------------------------------ ------------- -------------
Amortisation of intangible assets 130 716 -
------------------------------------ ------------- -------------
Directors' remuneration 1 892 296 1 734 980
------------------------------------ ------------- -------------
Staff costs - salaries, allowances
and related costs 9 140 862 7 774 811
------------------------------------ ------------- -------------
------------ ------------
------------------------------------ ------------- -------------
25 271 736 20 655 380
------------------------------------ ------------- -------------
======== ========
------------------------------------ ------------- -------------
c. EARNINGS PER SHARE
The calculation of earnings per share is based on the following
figures:
c.1 (Loss)/earnings
31 December 31 December
-------------------------------- ------------ ------------
2013 2012
-------------------------------- ------------ ------------
US$ US$
-------------------------------- ------------ ------------
Attributable (losses)/earnings (3 831 999) 7 649 402
-------------------------------- ------------ ------------
c.2 Number of shares
Weighted average shares in issue 16 503 813 16 501 500
---------------------------------- ----------- -----------
c.3 (Loss)/earnings per share (US cents)
Basic (23.22) 46.36
------- -------- ------
d. SHARE CAPITAL
d.1 Authorised
The authorised ordinary share capital at 31 December 2013 is at
the historical cost figure of US$25 000 (2012 - US$25 000)
comprising 25 million ordinary shares of US$0.001 each.
d.2 Issued and fully paid
The issued share capital at 31 December 2013 is at the
historical cost figure of US$16 506 (2012 - US$16 502) comprising
16.5061 million (2012 - 16.5015 million) ordinary shares of
US$0.001 each
e. CASH AND CASH EQUIVALENTS
31 December 31 December
2013 2012
----------------------------------- -------------- --------------
US$ US$
----------------------------------- -------------- --------------
Balance with the Central Bank 13 480 628 22 671 712
----------------------------------- -------------- --------------
Current, nostro accounts and cash 31 391 355 14 999 333
----------------------------------- -------------- --------------
Interbank placements 4 000 000 20 500 000
----------------------------------- -------------- --------------
------------- -------------
----------------------------------- -------------- --------------
48 871 983 58 171 045
----------------------------------- -------------- --------------
======== ========
----------------------------------- -------------- --------------
f. INVESTMENT PROPERTIES
31 December 31 December
2013 2012
------------------------------------- -------------- --------------
US$ US$
------------------------------------- -------------- --------------
At 1 January 3 115 300 2 510 000
------------------------------------- -------------- --------------
Improvements 769 550 291 890
------------------------------------- -------------- --------------
Transfer to non-current assets held
for sale (95 000) (2 225 300)
------------------------------------- -------------- --------------
Fair value adjustments 595 450 2 538 710
------------------------------------- -------------- --------------
------------- -------------
------------------------------------- -------------- --------------
At 31 December 4 385 300 3 115 300
------------------------------------- -------------- --------------
======== ========
------------------------------------- -------------- --------------
The fair value of the Bank's investment properties as at 31
December 2013 has been arrived at on the basis of valuations
carried out by independent professional valuers. The valuation
which conforms to International Valuation Standards, was in terms
of the policy as set out in the accounting policies section and was
derived with reference to market information close to the date of
the valuation.
The values were arrived at by applying yield rates of 9.5% on
rental levels of between US$6 - US$8 per square metre. The
properties are leased out under operating lease to various
tenants.
The Bank has no restrictions on the realisability of all
investment properties and no contractual obligations to purchase,
construct or develop the investment properties or for repairs,
maintenance and enhancements.
Rental income amounting to US$47 618 (2012 - US$12 408) 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.
g. CORPORATE GOVERNANCE AND RISK MANAGEMENT
1. RESPONSIBILITY
These financial statements are the responsibility of the
directors. This responsibility includes the setting up of internal
control and risk management processes, which are monitored
independently. The information contained in these financial
statements has been prepared on the going concern basis and is in
accordance with the provisions of the Companies Act (Chapter
24:03), the Banking Act (Chapter 24:20) and International Financial
Reporting Standards.
2. CORPORATE GOVERNANCE
The Bank adheres to principles of corporate governance derived
from the King III 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
3.1.1 Board of Directors
Name Name Meetings Meetings
held Attended
----------------------------- --------- ----------
Mr T Mr T N Mundawarara 4 4
----------------------------- --------- ----------
Mr A Mr A M T Mutsonziwa 4 4
----------------------------- --------- ----------
Mr J Mr J A Mushore 4 4
----------------------------- --------- ----------
Mr F Mr F Zimuto* 4 4
----------------------------- --------- ----------
Mr B Mr B Ndachena* 4 4
----------------------------- --------- ----------
Mr B Mr W Madzivire 4 4
----------------------------- --------- ----------
Mr L Ms L Majonga
* 4 4
----------------------------- --------- ----------
Mr B Mr B P Washaya 4 4
----------------------------- --------- ----------
Mr J Mr J Chigwedere 4 4
----------------------------- --------- ----------
Mr J Mr J de la
Fargue* 4 4
----------------------------- --------- ----------
Mr J Mr J Chenevix-Trench 4 4
----------------------------- --------- ----------
Mr L Mr L Chinyamutangira* 4 4
----------------------------- --------- ----------
Mr F Mr F S Mangozho* 4 4
----------------------------- --------- ----------
* Resigned from the board with effect from 20 November 2013.
3.1.2 Audit Committee
Name Meetings Meetings
held attended
---------------------- --------- ----------
Mr B W Madzivire 4 4
---------------------- --------- ----------
Mr A M T Mutsonziwa 4 3
---------------------- --------- ----------
Ms L Majonga* 4 4
---------------------- --------- ----------
* Resigned from the committee with effect from 20 November
2013.
3.1.3 Risk Management Committee
Name Name Meetings Meetings
held attended
------------------------ --------- ----------
Mr J Mr J Chigwedere 4 4
------------------------ --------- ----------
Ms L Ms L Majonga* 4 4
------------------------ --------- ----------
Mr B Mr B P Washaya 4 4
------------------------ --------- ----------
Mr J Mr J de la
Fargue* 4 3
------------------------ --------- ----------
Mr J Mr J A Mushore 4 3
------------------------ --------- ----------
Mr F Mr F Zimuto* 4 4
------------------------ --------- ----------
Mr F Mr F S Mangozho* 4 4
------------------------ --------- ----------
* Resigned from the committee with effect from 20 November 2013.
3.1.4 Asset and Liability Management Committee (ALCO), Finance & Strategy Committee
Name Meetings Meetings
held attended
----------------------- --------- ----------
Mr T N Mundawarara 4 4
----------------------- --------- ----------
Mr B P Washaya 4 4
----------------------- --------- ----------
Mr B Ndachena 4 4
----------------------- --------- ----------
Mr J A Mushore 4 4
----------------------- --------- ----------
Mr J Chenevix-Trench
(alternate J de
la Fargue) 4 4
----------------------- --------- ----------
Mr J Chigwedere 4 4
----------------------- --------- ----------
Mr F Zimuto* 4 4
----------------------- --------- ----------
Mr F S Mangozho* 4 4
----------------------- --------- ----------
Mr L Chinyamutangira* 4 4
----------------------- --------- ----------
* Resigned from the committee with effect from 20 November 2013.
3.1.5 Loans Review Committee
Name Meetings Meeting
held attended
--------------------- --------- ----------
Mr A M T Mutsonziwa 4 4
--------------------- --------- ----------
Ms L Majonga* 4 4
--------------------- --------- ----------
Mr B Ndachena* 4 4
--------------------- --------- ----------
* Resigned from the committee with effect from 20 November 2013.
.
3.1.6 Human Resources, Remuneration and Nominations Committee
Name Meetings Meetings
held attended
--------------------- --------- ----------
Mr A M T Mutsonziwa 6 6
--------------------- --------- ----------
Mr T N Mundawarara 6 6
--------------------- --------- ----------
Mr J Chenevix -
Trench 6 6
--------------------- --------- ----------
Mr J A Mushore 6 6
--------------------- --------- ----------
Mr B Madzivire 6 5
--------------------- --------- ----------
Mr B P Washaya 6 4
--------------------- --------- ----------
Mr F Zimuto* 6 4
--------------------- --------- ----------
* Resigned from the committee with effect from 20 November 2013.
3.1.7 Credit Committee
Name Meetings Meetings
held attended
----------------------- --------- ----------
Mr T N Mundawarara 5 5
----------------------- --------- ----------
Mr J de la Fargue* 5 5
----------------------- --------- ----------
Mr J A Mushore 5 5
----------------------- --------- ----------
Mr F Zimuto* 5 5
----------------------- --------- ----------
Mr B P Washaya 5 5
----------------------- --------- ----------
Mr L Chinyamutangira* 5 4
----------------------- --------- ----------
* Resigned from the committee with effect from 20 November 2013.
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 Committee, which are
responsible for defining the Bank's risk universe, developing
policies and monitoring implementation. The Bank strengthened its
risk management function by appointing a Chief Risk Officer in
September 2013 with overall responsibility over all risks in the
Bank. The Bank has complied with Basel II implementation timelines
set by the Reserve Bank of Zimbabwe.
Risk management is linked logically from the level of individual
transactions to the 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 reviewed its credit
risk management structures aimed at enhancing credit risk and asset
quality. 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.
The Bank is in the process of implementing a Credit Management
System and this will entail an automated end to end management of
credit from the loan origination to recoveries. The system should
be in place by the first half of 2014.
Management of credit risk is the responsibility of Credit
Management, Credit Monitoring, Credit Administration and Recoveries
departments with the following responsibilities:
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 group as well as sector concentrations and the review of such
limits.
Credit Monitoring and Financial Modelling
-- Independent Credit Risk Management.
-- Independent on-going monitoring of individual credit and portfolios.
-- Triggers remedial actions to protect the interests of the
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
make adjustments depending on exchange rate movement forecast. The
mismatches are also contained within 10% 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. Liquidity
risk is monitored through a daily treasury strategy meeting. This
is augmented by a monthly management ALCO and a quarterly Board
ALCO.
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 Committee whose
function is to ensure that this risk is minimized. The Risk
Committee with the assistance of the Internal Audit function and
the Risk Management department assesses the adequacy of the
internal controls and makes the necessary recommendations to the
Board.
4.5 Legal and compliance risk
Legal risk is risk from uncertainty due to legal actions or
uncertainty in the applicability or interpretation of contracts,
laws or regulations. Legal risk may entail such issues as contract
formation, capacity and contract frustration. Compliance risk is
the risk arising from non - compliance with laws and regulations.
To manage this risk permanent relationships are maintained with
firms of legal practitioners and access to legal advice is readily
available to all departments. The 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.
4.7 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 minimization
of losses arising from risky exposures.
4.8 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. Further,
there is an ALCO, Finance and Strategy Committee at Board level
responsible for monitoring overall progress towards attaining
strategic objectives for the Bank.
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.
4.9 Risk Ratings
4.9.1 Reserve Bank of Zimbabwe Ratings
During the year the Reserve Bank of Zimbabwe conducted an onsite
inspection on the Bank and the following ratings were issued;
4..9.1.1 CAMELS* Ratings
Latest RBS** Previous RBS Previous RBS
CAMELS Component Ratings Ratings Ratings
30/06/2013 31/01/2008 30/06/2007
----------------------- ------------- ------------- -------------
Capital Adequacy 2 4 4
----------------------- ------------- ------------- -------------
Asset Quality 4 2 3
----------------------- ------------- ------------- -------------
Management 3 3 3
----------------------- ------------- ------------- -------------
Earnings 2 3 3
----------------------- ------------- ------------- -------------
Liquidity 2 3 3
----------------------- ------------- ------------- -------------
Sensitivity to Market
Risk 2 3 3
----------------------- ------------- ------------- -------------
Composite Rating 3 3 4
----------------------- ------------- ------------- -------------
*CAMELS is an acronym for Capital Adequacy, Asset quality,
Management, Earnings, Liquidity and Sensitivity to Market Risk.
CAMELS rating system uses a rating scale of 1-5, where '1' is
Strong, '2' is Satisfactory, '3' is Fair, '4' is Weak and '5' is
Critical.
**RBS stands for Risk-Based Supervision.
4.9.1.2 Summary RAS ratings
Latest RAS*** Previous RAS Previous RAS
Ratings Ratings Ratings
30/06/2013 31/01/2008 30/06/2007
------------------------------- -------------- ------------- -------------
Overall Inherent Risk Moderate Moderate High
------------------------------- -------------- ------------- -------------
Overall Risk Management Acceptable Acceptable Weak
Systems
------------------------------- -------------- ------------- -------------
Overall Composite Risk Moderate Moderate High
------------------------------- -------------- ------------- -------------
Direction of Overall Composite Stable Stable Increasing
Risk
------------------------------- -------------- ------------- -------------
*** RAS stands for Risk Assessment System.
4.9.1.3 Summary risk matrix -30 June 2013 on - site examination
Level of Inherent Adequacy of Overall Composite Direction
Type of Risk Risk Risk Management Risk of Overall
Systems Composite
Risk
------------------- ------------------ ----------------- ------------------ ------------
Credit High Weak High Increasing
------------------- ------------------ ----------------- ------------------ ------------
Liquidity Moderate Acceptable Moderate Stable
------------------- ------------------ ----------------- ------------------ ------------
Interest Rate Moderate Acceptable Moderate Stable
------------------- ------------------ ----------------- ------------------ ------------
Foreign Exchange Low Acceptable Low Stable
------------------- ------------------ ----------------- ------------------ ------------
Strategic Risk Moderate Acceptable Moderate Stable
------------------- ------------------ ----------------- ------------------ ------------
Operational Risk Moderate Acceptable Moderate Stable
------------------- ------------------ ----------------- ------------------ ------------
Legal & Compliance Moderate Strong Moderate Stable
------------------- ------------------ ----------------- ------------------ ------------
Reputation Moderate Strong Moderate Stable
------------------- ------------------ ----------------- ------------------ ------------
Overall Moderate Acceptable Moderate Stable
------------------- ------------------ ----------------- ------------------ ------------
KEY
Level of Inherent Risk
Low - reflects a lower than average probability of an adverse
impact on a banking institution's capital and earnings. Losses in a
functional area with low inherent risk would have little negative
impact on the banking institution's overall financial
condition.
Moderate - could reasonably be expected to result in a loss
which could be absorbed by a banking institution in the normal
course of business.
High - reflects a higher than average probability of potential
loss. High inherent risk could reasonably be expected to result in
a significant and harmful loss to the banking institution.
Adequacy of Risk Management Systems
Weak - risk management systems are inadequate or inappropriate
given the size, complexity and risk profile of the banking
institution. Institution's risk management systems are lacking in
important ways and therefore a cause of more than normal
supervisory attention. The internal control systems will be lacking
in important aspects particularly as indicated by continued control
exceptions or by the failure to adhere to written policies and
procedures.
Acceptable - management of risk is largely effective but lacking
to some modest degree. While the institution might be having some
minor risk management weaknesses, these have been recognised 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 organisation.
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.
4.9.2 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 2013 2012
Long term BBB- BBB-
5. 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.
6. CAPITAL MANAGEMENT
The primary objective of the Bank's capital management is to
ensure that the Bank complies with the RBZ requirements. In
implementing the current capital requirements, the RBZ requires the
Banking subsidiary to maintain a prescribed ratio of total capital
to total risk weighted assets.
Regulatory capital consists of Tier 1 capital, which comprises
share capital, share premium, retained earnings (including current
year profit), statutory reserve and other equity reserves.
The other component of regulatory capital is Tier 2 capital,
which includes subordinated term debt, revaluation reserves and
portfolio provisions.
Tier 3 capital relates to an allocation of capital to market and
operational risk.
Various limits are applied to elements of the capital base. The
core capital (Tier 1) shall comprise not less than 50% of the
capital base and the regulatory reserves and portfolio provisions
are limited to 1.25% of total risk weighted assets.
The Bank's regulatory capital position at 31 December 2013 was
as follows:
31 December 31 December2012
2013
----------------------------------------------- ---------------- ----------------
US$ US$
----------------------------------------------- ---------------- ----------------
Share capital 16 506 16 502
----------------------------------------------- ---------------- ----------------
Share premium 31 474 502 15 577 932
----------------------------------------------- ---------------- ----------------
Retained earnings 8 802 979 12 487 547
----------------------------------------------- ---------------- ----------------
Fair value gain on investment properties (2 925 868) (2 411 775)
----------------------------------------------- ---------------- ----------------
-------------- --------------
----------------------------------------------- ---------------- ----------------
37 368 119 25 670 206
----------------------------------------------- ---------------- ----------------
Less: capital allocated for market and
operational risk (1 240 678) (1 198 520)
----------------------------------------------- ---------------- ----------------
Credit to insiders (4 734 129) (2 231 128)
----------------------------------------------- ---------------- ----------------
--------------- ---------------
----------------------------------------------- ---------------- ----------------
Tier 1 capital 31 393 312 22 240 558
----------------------------------------------- ---------------- ----------------
Tier 2 capital (subject to limit as per
Banking Regulations) 6 823 855 4 819 193
----------------------------------------------- ---------------- ----------------
Fair value gain on investment properties 2 925 868 2 411 775
----------------------------------------------- ---------------- ----------------
Subordinated debt 1 485 890 -
----------------------------------------------- ---------------- ----------------
Regulatory reserve (limited to 1.25% of
risk
weighted assets) 2 154 252 2 301 683
----------------------------------------------- ---------------- ----------------
Portfolio provisions (limited to 1.25%
of risk weighted assets) 257 845 105735
----------------------------------------------- ---------------- ----------------
Total Tier 1 & 2 capital 38 217 167 27 059 751
----------------------------------------------- ---------------- ----------------
Tier 3 capital (sum of market and operational
risk capital) 1 240 678 1 198 520
----------------------------------------------- ---------------- ----------------
--------------- ---------------
----------------------------------------------- ---------------- ----------------
Total capital base 39 457 845 28 258 271
----------------------------------------------- ---------------- ----------------
========= =========
----------------------------------------------- ---------------- ----------------
Total risk weighted assets 228 275 322 182 361 802
----------------------------------------------- ---------------- ----------------
========= =========
----------------------------------------------- ---------------- ----------------
Tier 1 ratio 13.75% 12.20%
----------------------------------------------- ---------------- ----------------
Tier 2 ratio 2.99% 2.64%
----------------------------------------------- ---------------- ----------------
Tier 3 ratio 0.54% 0.66%
----------------------------------------------- ---------------- ----------------
Total capital adequacy ratio 17.28% 15.50%
----------------------------------------------- ---------------- ----------------
RBZ minimum required 12.00% 12.00%
----------------------------------------------- ---------------- ----------------
NMB BANK LIMITED
7. SEGMENT INFORMATION
For management purposes, the Bank is organised into four
operating segments based on products and services as follows:
Retail Banking Individual customers deposits and consumer loans,
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 banks.
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 2013 and 2012.
7. SEGMENT INFORMATION
The following table presents income and profit and certain asset
and liability information regarding the bank's operating segments
and service units:
For the year ended 31 December 2013
Retail Corporate Banking Treasury International
Banking Banking Unallocated Total
--------------- --------------- ------------------------- -------------- --------------- -------------- ---------------
US$ US$ US$ US$ US$ US$
--------------- --------------- ------------------------- -------------- --------------- -------------- ---------------
Income
--------------- --------------- ------------------------- -------------- --------------- -------------- ---------------
21 444
Third party 523 21 749 625 4 006 239 1 756 443 1 162 331 50 119 161
--------------- --------------- ------------------------- -------------- --------------- -------------- ---------------
Impairment
losses on
loans
and advances (658 002) (15 987 808) - - - (16 645 810)
--------------- --------------- ------------------------- -------------- --------------- -------------- ---------------
-------------- -------------- ------------- -------------- ------------ --------------
--------------- --------------- ------------------------- -------------- --------------- -------------- ---------------
Net operating 20 786
income 521 5 761 817 4 006 239 1 756 443 1 162 331 33 473 351
--------------- --------------- ------------------------- -------------- --------------- -------------- ---------------
------------- ------------- ------------- ------------- ------------ --------------
--------------- --------------- ------------------------- -------------- --------------- -------------- ---------------
Results
--------------- --------------- ------------------------- -------------- --------------- -------------- ---------------
Interest and
similar
income 7 363 929 22 925 394 2 504 195 - 388 186 33 181 704
--------------- --------------- ------------------------- -------------- --------------- -------------- ---------------
Interest and
similar (2 368
expense 543) (9 120 441) (1 517 805) - - (13 006 789)
--------------- --------------- ------------------------- -------------- --------------- -------------- ---------------
------------- ------------- ------------- ------------ ------------ --------------
--------------- --------------- ------------------------- -------------- --------------- -------------- ---------------
Net interest
income 4 995 386 13 804 953 986 390 - 388 186 20 174 915
--------------- --------------- ------------------------- -------------- --------------- -------------- ---------------
------------- -------------- ----------- ------------- ----------- --------------
--------------- --------------- ------------------------- -------------- --------------- -------------- ---------------
Fee and
commission 12 342
income 153 566 915 - 1 756 199 8 567 14 673 834
--------------- --------------- ------------------------- -------------- --------------- -------------- ---------------
Depreciation
of property
and
equipment 744 735 135 675 41 694 46 718 727 034 1 695 856
--------------- --------------- ------------------------- -------------- --------------- -------------- ---------------
Segment
profit/
(loss) 8 423 563 (11 457 558) 1 965 903 381 721 (4 118 803) (4 805 174)
--------------- --------------- ------------------------- -------------- --------------- -------------- ---------------
Income tax
credit - - - - 973 175 973 175
--------------- --------------- ------------------------- -------------- --------------- -------------- ---------------
------------- ------------- ------------ ------------ ------------- --------------
--------------- --------------- ------------------------- -------------- --------------- -------------- ---------------
Profit/(loss)
for the year 8 423 563 (11 457 558) 1 965 903 381 721 (3 145 628) (3 831 999)
--------------- --------------- ------------------------- -------------- --------------- -------------- ---------------
======== ======== ======== ====== ========= ========
--------------- --------------- ------------------------- -------------- --------------- -------------- ---------------
NMB BANK LIMITED
7. SEGMENT INFORMATION (cont'd)
For the year ended 31 December 2013
Retail Banking Corporate Treasury International Unallocated Total
Banking Banking
------------------------------ --------------- ------------ ----------- -------------- ------------ ------------
US$ US$ US$ US$ US$ US$
------------------------------ --------------- ------------ ----------- -------------- ------------ ------------
Assets and Liabilities
------------------------------ --------------- ------------ ----------- -------------- ------------ ------------
Capital expenditure 1 058 456 133 532 132 113 12 027 1 341 108 2 677 236
------------------------------ --------------- ------------ ----------- -------------- ------------ ------------
Total assets 54 124 890 144 209 819 41 326 313 121 897 20 171 616 259 954 535
------------------------------ --------------- ------------ ----------- -------------- ------------ ------------
Total liabilities and capital 72 525 463 77 182 723 61 092 072 - 6 706 038 217 506 296
------------------------------ --------------- ------------ ----------- -------------- ------------ ------------
7. SEGMENT INFORMATION
The following table presents income and profit and certain asset
and liability information regarding the bank's operating segments
and service units:
For the year ended 31 December 2012
Retail Banking Corporate Treasury International Unallocated Total
Banking Banking
----------------- --------------- ----------------- -------------- -------------- -------------- ---------------
US$ US$ US$ US$ US$ US$
----------------- --------------- ----------------- -------------- -------------- -------------- ---------------
Income
----------------- --------------- ----------------- -------------- -------------- -------------- ---------------
Third party 17 420 843 19 816 731 2 806 291 1 441 235 3 310 656 44 795 756
----------------- --------------- ----------------- -------------- -------------- -------------- ---------------
Impairment
losses on loans
and advances (631 814) (3 353 248) - - - (3 985 062)
----------------- --------------- ----------------- -------------- -------------- -------------- ---------------
-------------- -------------- ------------- ------------- ------------ --------------
----------------- --------------- ----------------- -------------- -------------- -------------- ---------------
Net operating
income 16 789 029 16 463 483 2 806 291 1 441 235 3 310 656 40 810 694
----------------- --------------- ----------------- -------------- -------------- -------------- ---------------
------------- ------------- ------------- ------------ ----------- --------------
----------------- --------------- ----------------- -------------- -------------- -------------- ---------------
Results
----------------- --------------- ----------------- -------------- -------------- -------------- ---------------
Interest and
similar income 6 178 887 19 431 337 1 695 601 - - 27 305 825
----------------- --------------- ----------------- -------------- -------------- -------------- ---------------
Interest and
similar expense (1 921 638) (7 339 485) (792 466) - - (10 053 589)
----------------- --------------- ----------------- -------------- -------------- -------------- ---------------
------------- ------------- ------------- ------------ ------------ --------------
----------------- --------------- ----------------- -------------- -------------- -------------- ---------------
Net interest
income 4 257 249 12 091 852 903 135 - - 17 252 236
----------------- --------------- ----------------- -------------- -------------- -------------- ---------------
------------- -------------- ----------- ------------- ----------- --------------
----------------- --------------- ----------------- -------------- -------------- -------------- ---------------
Fee and
commission
income 11 136 084 450 746 - 1 429 285 - 13 016 115
----------------- --------------- ----------------- -------------- -------------- -------------- ---------------
Depreciation of
property and
equipment 615 387 127 980 20 727 27 064 639 798 1 430 956
----------------- --------------- ----------------- -------------- -------------- -------------- ---------------
Segment profit/
(loss) 4 885 799 6 665 804 2 431 151 416 494 (4 297 523) 10 101 725
----------------- --------------- ----------------- -------------- -------------- -------------- ---------------
Income tax
expense - - - - (2 452 323) (2 452 323)
----------------- --------------- ----------------- -------------- -------------- -------------- ---------------
------------- ------------- ------------ ------------ ------------- --------------
----------------- --------------- ----------------- -------------- -------------- -------------- ---------------
Profit/(loss)
for the year 4 885 799 6 665 804 2 431 151 416 494 (6 749 846) 7 649 402
----------------- --------------- ----------------- -------------- -------------- -------------- ---------------
======== ======== ======== ====== ========= ========
----------------- --------------- ----------------- -------------- -------------- -------------- ---------------
7. SEGMENT INFORMATION
For the year ended 31 December 2012
Retail Corporate Banking Treasury International Unallocated Total
Banking Banking
--------------------------- --------- ------------------ ----------- -------------- ------------ ---------------
US$ US$ US$ US$ US$ US$
--------------------------- --------- ------------------ ----------- -------------- ------------ ---------------
Assets and Liabilities
--------------------------- --------- ------------------ ----------- -------------- ------------ ---------------
Capital expenditure 974 520 107 131 450 160 829 1 501 749 2 744 679
--------------------------- --------- ------------------ ----------- -------------- ------------ ---------------
41 315 226 093
Total assets 622 116 785 291 48 849 157 160 829 18 982 629 528
--------------------------- --------- ------------------ ----------- -------------- ------------ ---------------
Total liabilities and 75 893 195 709
capital 282 76 327 413 40 146 035 - 3 343 134 864
--------------------------- --------- ------------------ ----------- -------------- ------------ ---------------
8. GEOGRAPHICAL INFORMATION
The Group operates in one geographical market, Zimbabwe.
NMBZ HOLDINGS LIMITED
NOTICE TO MEMBERS
Notice is hereby given that the 19(th) Annual General Meeting of
Members of NMBZ Holdings Limited will be held at the Registered
Office of the Company at 4(th) Floor Unity Court, Cnr 1(st)
Street/Kwame Nkrumah Avenue, Harare on Tuesday 19 June 2014 at 10:
00 hours for the following purposes:
ORDINARY BUSINESS
1. 1. To receive and adopt the Financial Statements for the year
ended 31 December 2013, together with the reports of the Directors
and Auditors thereon.
2. To appoint Directors.
a. In accordance with the Articles of Association, Mr. J.
Mushore, Mr. T. N. Mundawarara and Dr. J. T. Makoni retire by
rotation. Being eligible, the retiring directors offer themselves
for re-election.
b. Mr. B. Zwinkels, Ms. M. Svova, Mr. B. Chikwanha, Mr. C.
Ndiaye and Mr. D. Malik were appointed as directors subsequent to
the last Annual General Meeting and in accordance with the Articles
of Association retire from office. They being eligible, the
retiring directors offer themselves for re-election.
3. To appoint Auditors for 2014.
4. To approve Messrs KPMG's remuneration for the year ended 31 December 2013.
Note: A member of the company entitled to attend and vote at
this meeting is entitled to appoint a proxy to attend, speak and on
a poll, vote in his stead. A proxy need not be a member of the
company. Proxy forms should be forwarded to reach the office of the
transfer secretaries at least 48 hours before the commencement of
the meeting.
By Order of the Board
V Mutandwa
Company Secretary
28 March 2014
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 4 759651 +263 9 70169
Facsimile +263 4 759648 +263 9 882068
Website: http://www.nmbz.co.zw
Email: enquiries@nmbz.co.zw
Transfer Secretaries
In Zimbabwe In UK
First Transfer Secretaries Computershare Investor Services
PLC
1 Armagh Avenue The Pavilions
36 St Andrew Square Bridgewater Road
(Off Enterprise Road) Bristol
Eastlea BS99 9ZZ
P O Box 11 United Kingdom
Harare
Zimbabwe
This information is provided by RNS
The company news service from the London Stock Exchange
END
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