Interim Results
August 31 2005 - 5:51AM
UK Regulatory
RNS Number:6365Q
NMBZ Holdings Ld
31 August 2005
Holding company of
NMB Bank Limited
(Registered Commercial Bank)
UNAUDITED INFLATION ADJUSTED AND HISTORICAL COST
RESULTS FOR THE HALF-YEAR ENDED 30 JUNE 2005
HIGHLIGHTS
Inflation Adjusted
* Attributable loss of Z$9 755 million (June 2004 - Z$13 689
million profit, 12 months to December 2004 Z$75 190 million loss)
* Total asset base down 41% to Z$670 868 million (December
2004 - Z$1 141 225 million)
* Temporary liquidity support down to Z$216 million
(December 2004 - Z$163 346 million)
Historical
* Attributable loss of Z$6 770 million (June 2004 - Z$14 667
million profit, 12 months to Dcember 2004 Z$9 636 million loss)
* Total asset base down 12% to Z$491 530 million (December
2004 - Z$557 574 million)
* Temporary liquidity support down to Z$216 million
(December 2004 - Z$92 933 million)
Dr Gibson Manyowa Mandishona, the acting Chairman of NMBZ Holdings Limited,
said:
"The Group's results reflect the impact of the expensive liquidity support over
the period under review. With the support having been effectively repaid at 30
June 2005 ,economic conditions notwithstanding, the second half of the year
should see an improvement in performance and a return to profitability".
Enquiries:
NMBZ HOLDINGS LIMITED Tel: +263-4-759 601/6
Dr David Hatendi, Chief Executive Officer davidh@nmbz.co.zw
Mario dos Remedios, Chief Financial Officer mariodosr@nmbz.co.zw
Website http://www.nmbz.co.zw
Email enquiries@nmbz.co.zw
COLLEGE HILL - LONDON Tel: +44-207-457 2020
Corinna Dorward
NMBZ HOLDINGS LIMITED
for the six months ended 30 June 2005
CHAIRMAN'S STATEMENT
The economic recovery trend that began in 2004 continued in the first quarter of
2005, but started to recede in the second quarter. The half year was
characterised in summary by:
* Resurgent inflation and persitent, but declining money supply growth
* Increase in the level of domestic debt
* Rising interest rates
* Termination of previous concessionary lending facilities and
introduction of new facilities for mining and agriculture
* Pronounced foreign currency shortages.
Commentary on Group Inflation Adjusted and Historical Cost Results
Introduction
There were some signs of a return to stability in the financial services sector,
but the harsh macro-economic conditions adversely affected earnings in the
Group. The Group's results reflect the impact of the expensive liquidity
support over the period under review. With the support having been effectively
repaid at 30 June 2005, economic conditions notwithstanding, the second half of
the year should see an improvement in performance and a return to profitability.
In accordance with International financial Reporting Standards, the Group
continues to prepare its results statements using hyper inflationary accounting
We have also provided a statement of our historical performance as a reference.
Attributable Loss
The inflation adjusted attributable loss of Z$9 755 million was recorded
compared to a profit of Z$13 689 million over the same period in 2004 and a Z$75
190 million loss for the 12 months to December 2004. The Group recorded a
historical cost loss of Z$6 770 million compared to an attributable profit of
Z$14 667 over the same period in 2004 and a Z$9 636 loss in the 12 months to
December 2004.
Net Interest Income
Net interest income decreased by 87% to Z$20 808 million from Z$158 627 million
in June 2004 in inflation adjusted terms. The decrease was primarily a result
of a decrease in interest from lending and investing activities. Interest paid
on the Reserve Bank of Zimbabwe (RBZ) liquidity support amounted to Z$73 billion
in inflation adjusted terms.
Non-Interest Income
Inflation adjusted non-interest income increased by 3% to $17 117 million and
contributed 36% (June 2004 - 10%) of the net operating income.
Operating Expenses
Operating expenses decreased by 25% in inflation adjusted terms over the same
period last year mainly due to cost cutting measures undertaken by the Group.
NMBZ HOLDINGS LIMITED
for the six months ended 30 June 2005
Gain/ (loss) on net monetary position
The gain or loss on net monetary position occurs as a result of the restatement
of amounts to current value. The gain of Z$37 073 million is based on the
inflation index as provided by the Central Statistical Office of Zimbabwe. The
gain has been accounted for in the income statement in accordance with the
International Accounting Standard 29 "Reporting in Hyperinflationary Economies".
Charge for doubtful debts
The inflation adjusted charge for the six month period decreased by 84% to Z$2
994 million (June 2004 - Z$18 555 million). The Board continues to adopt a
conservative approach on provisions in view of the unstable macro-economic
environment.
Dividend
In view of the historical cost attributable loss recorded, no interim dividend
has been proposed.
Balance Sheet
In inflation adjusted terms, the Group's total asset base was managed down by
41% to Z$670 868 million from Z$1 141 225 million at 31 December 2004. The
decrease was mainly caused by a reduction in advances and other accounts (57%),
customers' indebtedness for acceptances (43%) and property and equipment (16%).
In historical cost terms, the total asset base decreased by 12% to Z$491 530
million from Z$557 574 million at December 2004. It is also gratifying to note
that historical cost deposits increased by 54% to Z$387 164 million from Z$251
177 million in June 2004.
Capital Adequacy
The banking subsidiary's capital adequacy ratio at 30 June 2005 calculated on
the historical cost basis in accordance with the guidelines of the RBZ was 0.15%
(30 June 2004 - 8.37%, 31 December 2004 - 1.36%). This compares unfavourably
with the Reserve Bank's minimum ratio of 10%.
The Bank's total shareholders funds stood at Z$5 058 million at 30 June 2005 and
this is below the RBZ's requirement for a minimum capital base of Z$10 billion.
Subsequent to the reporting period, the Bank's management accounts show that the
capital base has recovered to be in excess of the minimum requirement although
the minimum ratio of 10% has not yet been attained at the date of this report.
Current trading performance trends indicate that the banking subsidiary should
be fully compliant with the present minimum requirements of the RBZ.
Cautionary Statement And Extraordinary General Meeting
Negotiations concerning possible strategic partnerships referred to in
cautionary announcements to shareholders on 14 February 2005 and subsequently,
are still in progress and updates on the developments will continue to be
provided to shareholders at regular intervals as required by the Zimbabwe Stock
Exchange.
The Extraordinary General Meeting (EGM) held on 26 July 2005 was adjourned
following the RBZ Monetary Policy Statement issued on 21 July, particularly as
the prescribed minimum capital for Commercial banks was increased to Z$100
billion from September 2006.
NMBZ HOLDINGS LIMITED
for the six months ended 30 June 2005
Outlook And Strategy
The first quarter was particularly difficult for the Group on the back of the
high cost of temporary liquidity support from the RBZ. The second quarter
witnessed a significant improvement in the performance of the Group as the
liquidity support was largely liquidated.
The second half of the year should witness a significant improvement in the
performance of the Group due to the improved trading capacity as a result of the
repayment of the RBZ support and the beneficial effects of liquidity to be
injected from the current capitalisation initiatives.
We will continue to focus on the recapitalisation of the Group in order to
enhance trading capacity and take advantage of the anticipated business growth
opportunities in the economy.
Litigation
Judgment in respect of the five (5) charges previously reported in the results
for the year ended 31 December 2004 relating to alleged dealings in foreign
currency is still imminent, and if deemed necessary, a statement on the outcome
shall be issued.
Going Concern
In the financial statements for the year ended 31 December 2004, attention was
drawn to the temporary liquidity support from the RBZ and the capital base of
the Banking subsidiary. The recourse to this support from the RBZ had an
adverse impact on profitability due to its high cost in the period under review.
As disclosed in note 11, the principal amount outstanding on the RBZ
temporary liquidity support at 30 June 2005 was effectively repaid, thanks to
tight liquidity management and the support of the Bank's loyal customer base,
down from Z$92.9 billion at 31 December 2004 to Z$216 million.
The effect of the current initiatives to augment the capital of the Group
complements the significant recovery trend that has been evident over the past
few months. Indications are that an optimum amount expected to be raised before
the end of the year will add further impetus to this profit trend. This in turn
will allow for an organic growth in the Banking subsidiary's capital which will
leave it well poised to be fully compliant with the RBZ's new capital
requirements of Z$100 billion required to be in place by September 2006.
Conclusion
I would like to thank our clients and the Monetary Authorities for their
valuable support. I would also like to thank the Board, company's shareholders,
management and staff for their endeavours during the period under review.
GIBSON MANYOWA MANDISHONA
Acting Chairman
30 August 2005
NMBZ HOLDINGS LIMITED
for the six months ended 30 June 2005
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.
2. CORPORATE GOVERNANCE
The Group adheres to principles of corporate governance derived from the King
Reports and the United Kingdom Combined Code. The Group is cognisant of its
duty to conduct business with due care and in good faith in order to safeguard
all stakeholders' interests.
3. BOARD OF DIRECTORS
Board appointments are made to ensure a variety of skills and expertise on the
Board. Non-executive directors are of such calibre as to provide independence
to the Board. The Acting Chairman of the Board is a non-executive director.
The Board is supported by various 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 banking subsidiary's Board requires an additional non-executive director to
meet the minimum requirements and prospective appointments are in the process of
being vetted pending RBZ approval for their appointment.
4. GOING CONCERN
The Group financial statements are prepared on a going concern basis. The
banking crisis in the Zimbabwe financial sector that started in December 2003
did not spare NMB Bank Limited. This necessitated the access of temporary
liquidity support from the RBZ in October 2004. The recourse to this support
has had an adverse impact on profitability due to the high cost and current
negotiations to recapitalise the Group, will, if successful, contribute to
reduce the cost of funding and consequently improve profitability.
Were the negotiations to recapitalise the Group prove unsuccessful, this would
have a material effect on the ability of the Bank and the Group to continue as a
going concern. There is no indication that this is likely.
5. RISK MANAGEMENT
The Board takes cognisance of its responsibility for the management of risk for
the Group. Their main objective is to contain the risks inherent within the
financial services sector and to ensure that the Group's various risk profiles
are understood and appropriately managed to the benefit of customers,
shareholders and other stakeholders. This has been achieved by the consistent
enforcement of effective risk management policies and internal control systems
to mitigate the risks in the various risk categories identified, these being
operational risk, market and interest rate risk, liquidity risk, credit risk,
legal risk and reputational risk.
NMBZ HOLDINGS LIMITED
for the six months ended 30 June 2005
5.1 Operational risk
This risk is inherent in all business activities and is the potential for loss
arising from ineffective internal controls, poor operational procedures to
support these controls, errors and deliberate acts of fraud.
The balancing of the risk and the cost incurred to reduce the risk is critical.
The Board has an Audit Committee whose function is to ensure that this risk is
minimised. The Audit Committee through the internal audit function assesses the
adequacy of the internal controls and makes the necessary recommendations to the
Board.
5.2 Market and Interest Rate risk
Market risk is the adverse effect of the change in market conditions, inter
alia, movement in interest rates, foreign exchange rates, equity markets and
general economic conditions.
The Group has in place an Asset and Liability Management Committee (ALCO), which
comprises the departmental heads of Risk, Treasury, Corporate and Retail Banking
and Finance, in addition to executive directors. The committee monitors these
risks and recommends the appropriate levels to which the Group should be exposed
at any time. The approval of all dealing limits ultimately rests with this
Committee.
5.3 Liquidity risk
The management of liquidity in the Group is primarily designed to ensure that
the Group meets its obligations timeously. The Treasury department in
consultation with ALCO formulates and applies appropriate investment methods and
instruments to ensure that this is achieved. In managing this risk, the Risk
Management department periodically reports on facility utilisations and excesses
that need management attention.
5.4 Credit risk
Credit risk in the possibility that the Group will suffer a loss should a debtor
default on either repayment of the principle amount borrowed on the payment of
interest accrued, or both.
The Board has put in place sanctioning committees which operate according to the
amount requested by an applicant. The Risk Management department reviews all
applications. This initial review allows only those applications that do not
unduly expose the Group to be considered by the sanctioning committees.
5.5 Legal 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.
To manage this risk the Group employs a legal practitioner who is responsible
for the drafting, monitoring and execution of all contracts. Permanent
relationships are also maintained with firms of legal practitioners and access
to legal advice is readily available to all departments. The compliance
function is also responsible for identifying and monitoring legal risks and
ensuring that the Group remains in compliance with all regulatory requirements.
NMBZ HOLDINGS LIMITED
for the six months ended 30 June 2005
5.6 Reputational Risk
Reputational risk is the risk of loss of business as a result of negative
publicity or negative perceptions by the market with regards to the way the
Group can conduct its business.
To manage this risk, the Group strictly monitors customer's complaints,
continuously train staff at all levels, conducts market surveys and periodic
reviews of business practices through its internal audit department.
The directors are satisfied with the risk management processes in the Bank as
these have contributed to the minimisation of losses arising from risk exposures
6. REGULATORY COMPLIANCE
We remain committed to complying with and adhering to all regulatory
requirements, including attending to current deficiencies in the capital
adequacy ratios and issues relating to the requisite number of non-executive
board members.
NMBZ HOLDINGS LIMITED
for the six months ended 30 June 2005
CONSOLIDATED INCOME STATEMENTS
INFLATION ADJUSTED HISTORICAL
Restated Restated
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2005 2004 2004 2005 2004 2004
Note Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
Interest from lending 99 479 316 738 416 224 77 163 103 713 151 206
activities
Income from investing 4 23 579 50 156 148 241 18 093 15 030 56 477
activities
------------- ------------- ------------ ------------- ------------- ------------
123 058 366 894 564 465 92 256 118 743 207 683
Interest expense 5 (102 250) (208 267) (369 735) (76 515) (67 181) (146 654)
------------- ------------ ------------ ------------- ------------- ------------
Net interest income 20 808 158 627 194 730 18 741 51 562 61 029
Non-interest income 6 17 117 16 551 68 950 12 660 7 799 42 296
Net foreign exchange 9 369 17 497 (12 919) 8 110 5 415 (7 010)
gains /(losses)
Loss on disposal of - (16 913) (18 805) - (4 449) (4 530)
interest in
subsidiary
------------ ------------ ----------- ------------- ------------ -----------
Net operating income 47 294 175 762 231 956 39 511 60 327 91 785
Operating expenditure 7 (84 759) (113 297) (236 485) (46 291) (33 584) (72 632)
Charge for bad and (2 994) (18 555) (66 834) (2 994) (7 020) (38 024)
doubtful debts
Gain/(loss on net 37 073 (9 246) (72 677) - - -
monetary position
-------------- --------------- -------------- ------------- --------------- --------------
(loss)profit before (3 386) 34 664 (144 040) (9 774) 19 723 (18 871)
taxation
Taxation 8 (6 369) (18 401) 68 991 3 004 (4 082) 9 315
Financial Institution 8 - (2 574) (141) - (974) (80)
levy
-------------- -------------- ------------ ------------ -------------- ------------
(Loss) /profit (9 755) 13 689 (75 190) (6 770) 14 667 (9 636)
attributable to
ordinary shareholders
======= ======= ======= ======= ======= =======
(Loss)/earnings per
share (cents)
-Basic 9 (2 286) 3 207 (17 617) (1 586) 3 437 (2 258)
-Headline 9 (1 806) 3 208 (13 852) (1 847) 3 437 (5 285)
-Diluted 9 (2 260) 3 205 (17 416) (1 568) 3 434 (2 232)
-Diluted headline 9 (1 785) 3 206 (13 694) (1 826) 3 434 (5 225)
-Dividend per share - - - - - -
(cents)
NMBZ HOLDINGS LIMITED
for the six months ended 30 June 2005
CONSOLIDATED BALANCE SHEETS
INFLATION ADJUSTED HISTORICAL
Restated Restated
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
at 30 June at 30 June at 31 Dec at 30 June at 30 June at 31 Dec
2005 2004 2004 2005 2004 2004
Note Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
SHAREHOLDERS' FUNDS
Share capital 10 76 378 76 378 76 378 107 107 107
Capital reserves 10 208 007 154 547 208 007 25 248 683 25 248
Revenue reserves (158 719) (7 386) (148 964) (19 882) 35 518 (13 112)
------------- ------------- ------------- -------------- ------------- --------------
Total shareholders' funds 125 666 223 539 135 421 5 473 36 308 12 243
------------- ------------- ------------- -------------- ------------- ---------------
LIABILITIES
Deposits and other 11 387 164 663 891 848 537 387 164 251 177 482 760
accounts
Financial liabilities held 12 87 961 698 648 77 002 87 961 264 327 43 809
for trading
Provision for current (3 281) 47 013 2 426 (3 281) 17 787 1 380
taxation
Acceptances 13 938 115 517 24 274 13 938 43 705 13 810
Deferred taxation 59 420 80 940 53 565 275 1 444 3 572
-------------- ------------ ------------- -------------- ------------- ---------------
670 868 1 829 548 1 141 225 491 530 614 748 557 574
======== ======== ======== ======== ======== ========
ASSETS
Balances with banks and 13 124 846 444 258 217 110 124 846 168 081 123 521
cash
Financial assets held for 12 43 910 490 536 43 081 43 910 185 590 24 510
trading
Advances and other 14 248 412 466 302 579 224 248 412 176 421 329 539
accounts
Customers' indebtedness 13 938 115 517 24 274 13 938 43 705 13 810
for acceptances
Trade investment 15 930 4 514 930 529 48 529
Quoted and other 16 1 662 2 519 1 672 945 953 951
investments
Investment properties 63 628 492 67 143 36 200 52 38 200
Property & equipment 17 173 542 305 410 207 791 22 750 39 898 26 514
------------- ------------- ------------- -------------- ------------- --------------
670 868 1 829 548 1 141 225 491 530 614 748 557 574
======== ======== ======== ======== ======== ========
NMBZ HOLDINGS LIMITED
for the six months ended 30 June 2005
CONSOLIDATED INFLATION ADJUSTED STATEMENT OF CHANGES IN EQUITY
Capital Reserves Revenue
Reserves
Restated Capital
Share Share Statutory Redemption Accumulated
Capital Premium Reserve Reserve Other Profit / Total
(loss)
Z$million Z$million Z$million Z$ million Z$million Z$ million Z$million
Balances at 1 January
2004 - as previously
reported 76 378 129 776 21 465 14 666 413 2 635 245 333
Prior year restatement - - (11 773) - - (16 730) (28 503)
------------ ----------- ------------ ------------- ------------ ------------ ------------
Balance at 1 January 76 378 129 776 9 692 14 666 413 (14 095) 216 830
2004 - restated
Net profit for the six - - - - - 13 689 13 689
months ended 30 June
2004
Dividends - - - - - (6 980) (6 980)
----------- ----------- ------------ ------------- ------------ ------------ -----------
Balances at 30 June 76 378 129 776 9 692 14 666 413 (7 386) 223 539
2004
----------- ----------- ----------- ------------- ------------ ------------ -----------
Net loss for the six - - - - - (88 879) (88 879)
months ended 31
December 2004
Revaluation of - - - - 761 - 761
properties
Capitalisation of - 52 699 - - - (52 699) -
reserves
----------- ----------- ------------ ------------- ------------ ------------ ------------
Balances at 31 December 76 378 182 475 9 692 14 666 1 174 (148 964) 135 421
2004
----------- ----------- ------------ ------------- ------------ ------------ ------------
Net loss for the six - - - - - (9 755) (9 755)
months ended 30 June
2005
Balances at 30 June 76 378 182 475 9 692 14 666 1 174 (158 719) 125 666
2005
====== ======= ======= ======= ======= ======== =======
NMBZ HOLDINGS LIMITED
for the six months ended 30 June 2005
CONSOLIDATED HISTORICAL COST STATEMENT OF CHANGES IN EQUITY
Revenue
Reserves
Capital Reserves Capital
Share Share Statutory Redemption Accumulated
Capital Premium Reserve Reserve Other Profit/ Total
(loss)
Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
Balances at 1 January 107 580 23 27 53 23 028 23 818
2004
Net profit for the six - - - - - 14 667 14 667
months ended 30 June 2004
Dividends - - (2 177) (2 177)
---------- ----------- ------------ ------------ ----------- ------------ ------------
Balances at 30 June 2004 107 580 23 27 53 35 518 36 308
----------- ----------- ------------ ------------- ----------- ------------- ------------
Net loss for the six - - - - - (24 303) (24 303)
months ended 31 December
2004
Revaluation of properties - - - - 238 - 238
Capitalisation of - 24 327 - - - (24 327) -
reserves
---------- ----------- ------------ ---------- ------- ----------- --------------
Balances at 31 December 107 24 907 23 27 291 (13 112) 12 243
2004
Net loss for the six - - - - - (6 770) (6 770)
months ended 30 June 2005
---------- ----------- ------------ ---------- ------- ----------- -------------
Balances at 30 June 2005 107 24 907 23 27 291 (19 882) 5 473
---------- ----------- ------------ ---------- ------- ----------- -------------
NMBZ HOLDINGS LIMITED
for the six months ended 30 June 2005
CONSOLIDATED CASHFLOW STATEMENTS
INFLATION ADJUSTED HISTORICAL
Restated Restated
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2005 2004 2004 2005 2004 2004
CASHFLOW FROM OPERATING ACTIVITIES Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
(Loss)/ profit before taxation and (40 459) 43 910 (71 364) (9 774) 19 723 (18 871)
loss on net monetary adjustment
Non-cash items
Loss/(profit) on disposal of (552) 5 2 638 (3 612) 1 294
property, plant & equipment
Depreciation 27 319 5 516 68 513 2 466 1 761 3 782
Property and equipment write-off 2 328 - 642 884 - 365
Investment properties fair value 3 515 2 040 (2 584) 2 000 48 (23 040)
adjustment
Trade investment fair value - 809 4 394 - - (481)
adjustment
Charge for bad and doubtful debts 2 994 18 555 66 834 2 994 7 020 38 024
Minority interest written-off - (2 515) (2 515) - 59 59
Loss on disposal of interest in - - 18 805 - - 4 530
subsidiary
Gain/ (loss) on net monetary 37 073 (9 246) (72 677) - - -
position
------------ -------------- ------------- ------------- ------------- -------------
Operating cash flows before changes
in
Operating assets and liabilities 32 218 59 074 12 686 (5 042) 28 612 4 662
Changes in operating assets and
liabilities:
Financial liabilities held for 10 959 424 860 (196 779) 44 152 197 403 (23 115)
trading
Deposits and other accounts (461 373) (45 102) 139 553 (95 596) 77 871 309 454
Advances and other accounts 327 817 127 868 (33 341) 78 133 (33 667) (217 789)
Financial assets held for trading - 10 611 10 611 - 2 594 2 594
Eliminating effect of net - - (21 915) - - (5 290)
liabilities retained on sale of
interest in subsidiary
------------ --------------- ------------- ------------- ------------- -------------
(90 379) 577 309 (89 185) 21 647 272 813 70 516
Taxation
Corporate tax paid (6 222) (8 979) (8 222) (4 954) (2 151) (2 140)
------------- -------------- ------------- ------------- ------------- -------------
Net cash inflow/(outflows) from (96 601) 568 330 (97 407) 16 693 270 662 68 376
operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on disposal of property and 7 059 56 10 263 5 320 21 538
equipment
Proceeds from disposal of quoted and 10 - 2 396 6 - 50
other investments
Purchase of property and equipment (1 903) (28 175) (55 017) (1 294) (12 994) (17 675)
Proceeds from disposal of interest - - 3 109 - - 760
in subsidiary
------------- ------------- ------------- ------------- ------------- -------------
Net cash inflows/(outflows) from 5 166 (28 119) (39 249) 4 032 (12 973) (16 327)
investing activities
------------- ------------- ------------- ------------- ------------- -------------
Net cash inflow/(outflows) before (91 435) 540 211 (136 656) 20 725 257 689 52 049
financing activities
-------------- -------------- ------------- ------------- ------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid - (6 980) (4 716) - (2 177) (2 177)
-------------- -------------- -------------- ------------- ------------- -------------
- (6 980) (4 716) - (2 177) (2 177)
--------------- --------------- -------------- ------------- ------------- -------------
Net increase/(decrease) in
cash and cash equivalents (91 435) 533 231 (141 372) 20 725 255 512 49 872
Cash and cash equivalents at 260 191 401 563 401 563 148 031 98 159 98 159
beginning of the period
------------- ------------ ------------- ------------- ------------- -------------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD (note 13) 168 756 934 794 260 191 168 756 353 671 148 031
======== ======== ======== ======== ======== ========
NMBZ HOLDINGS LIMITED
for the six months ended 30 June 2005
NOTES TO THE FINANCIAL STATEMENTS
1. INCORPORATION AND ACTIVITIES
The company is incorporated in Zimbabwe and is an investment holding company.
Its subsidiaries are engaged in banking and property holding.
2. CURRENCY
These interim financial statements are expressed in Zimbabwe dollars and are
rounded to the nearest million.
3. ACCCOUNTING POLICIES
3.1 Historical Cost Conventions
The financial statements are prepared under the historical cost convention and
adjusted to reflect the changes in general price levels in accordance with IAS
29, Financial Reporting in Hyperinflationary Economies.
3.2 Inflation Accounting
The economy of Zimbabwe is considered to be a hyperinflationary economy. In
order to comply with IAS 29, Financial Reporting in Hyperinflationary Economies,
financial statements need to be expressed in terms of the measuring unit current
at the balance sheet date. Accordingly, the accompanying financial statements,
including comparatives, have been restated to account for changes in the general
purchasing power of the Zimbabwe dollar. The restatement is based on the
consumer price index at the balance sheet date. The indices and conversion
factors are derived from the inflation rates which are issued by the Central
Statistical Office of Zimbabwe. The indices and conversion factors used were as
follows:
Dates Indices Conversion factors
30 June 2005 12 354.2 1.0000
31 December 2004 7 028.7 1.7577
30 June 2004 4 674.1 2.6431
3.3 Financial instruments
The fair value of financial instruments is based on their quoted market price at
the balance sheet date without any deductions 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 balance sheet date for an instrument with similar terms and
conditions. Where pricing models are used, inputs are based on market related
measures at the balance sheet date.
3.4 Investment properties
Investment properties are stated at fair value. Gains and losses arising from a
change in fair value of investment properties are recognised in the income
statement.
NMBZ HOLDINGS LIMITED
for the six months ended 30 June 2005
3.5 Bad and Doubtful Debts
Provisions are applied to write off advances in part or in whole when
they are considered wholly or partly unrecoverable. The aggregate provisions
which are made during the year are charged to income.
3.5.1 Specific provisions
Specific provisions are made where the repayment of identified advances is in
doubt and reflect estimates of the loss. Advances are written off against
specific provisions once the probability of recovering any significant amounts
becomes remote.
3.5.2 General provisions
The general doubtful debt provision relates to the inherent risk of
losses which, although not individually identified, is known to be present in
any loan portfolio.
3.5.3 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 balance sheet. This policy adheres to the
requirements of the Banking Regulations 2000 issued by the RBZ.
4. INCOME FROM INVESTING ACTIVITIES
INFLATION ADJUSTED HISTORICAL
Restated Restated
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2005 2004 2004 2005 2004 2004
Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
Gains less losses from 24 067 58 553 147 775 18 581 18 207 56 212
investing securities
(Loss)/ gain from marking (488) (8 397) 466 (488) (3 177) 265
to market
----------- ----------- ------------ ------------ ------------ -------------
23 579 50 156 148 241 18 093 15 030 56 477
====== ======= ======= ======= ======= =======
5. INTEREST EXPENSE
RBZ liquidity support 72 628 - 94 948 53 549 - 50 758
Trading activities 29 622 208 267 279 870 22 966 67 181 97 645
Capitalised interest - - (5 083) - - (1 749)
------------ ------------ ------------ ------------ ------------ ------------
102 250 208 267 369 725 76 515 67 181 146 654
======= ======= ======= ======= ======= ======
The balance outstanding in respect of the temporary liquidity support is shown
under note 11.
NMBZ HOLDINGS LIMITED
for the six months ended 30 June 2005
6. NON-INTEREST INCOME
INFLATION ADJUSTED HISTORICAL
Restated Restated
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2005 2004 2004 2005 2004 2004
Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
Gains less losses from - 661 (677) - 211 18
quoted and other investments
Net commission and fee 13 568 7 501 69 845 10 292 2 648 18 524
income
- Income 13 568 10 393 69 845 10 292 3 330 18 524
- Expense - (2 892) - - (682) -
Fair value adjustment on - (809) (4 394) - - 481
trade investment
Fair value adjustment on (3 515) (2 040) 2 584 (2 000) (48) 23 040
investment properties
(Loss)/profit on disposal of 552 (5) (2 638) 3 612 (1) (294)
fixed assets
Other operating income 6 512 11 243 4 230 756 4 989 527
------------ ------------ ----------- ------------ ------------ ------------
17 117 16 551 68 950 12 660 7 799 42 296
======= ======= ====== ======= ======= =======
7. OPERATING EXPENDITURE
The operating profit is after
charging the following:
Administration costs 26 092 59 126 78 617 20 228 17 129 33 366
Depreciation 27 319 5 516 68 513 2 466 1 761 3 782
Staff costs 31 348 48 655 89 355 23 597 14 694 35 484
------------ ------------ ----------- ------------ ------------ ------------
84 759 113 297 236 485 46 291 33 584 72 632
======= ======= ====== ======= ======= =======
NMBZ HOLDINGS LIMITED
for the six months ended 30 June 2005
8. taxation
INFLATION ADJUSTED HISTORICAL
Restated Restated
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2005 2004 2004 2005 2004 2004
Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
Tax Charge
Current taxation - 40 804 1 208 - 15 438 687
Prior year current tax - - 819 - - 466
adjustment
Aids levy - 3 309 25 - 1 252 14
Deferred tax charge / 6 369 (25 712) (71 043) (3 004) (12 608) (10 482)
(credit)
---------- ---------- ---------- ---------- ---------- ----------
6 369 18 401 (68 991) (3 004) 4 082 (9 315)
Financial institutions - 2 574 - - 974 -
levy
Financial Institutions - - 141 - - 80
levy - prior year under
provision
---------- ---------- ---------- ---------- ---------- ----------
6 369 20 975 (68 850) (3 004) 5 056 (9 235)
====== ====== ====== ====== ====== ======
9. Earnings per share
The calculation of earnings per share is based on the following figures:
INFLATION ADJUSTED HISTORICAL
Restated Restated
Unaudited Unaudited Unaudited Unaudited Audited
Unaudited
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2005 2004 2004 2005 2004 2004
Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
9.1 (Losses)/earnings
Basic earnings (9 755) 13 689 (75 190) (6 770) 14 667 (9 636)
Headline earnings(note 9.4) (7 708) 13 694 (59 122) (7 884) 14 668 (22 556)
9.2 Number of shares
Weighted average shares in issue 426 804 812 426 804 812 426 804 812 426 804 812 426 804 812 426 804 812
Diluted number of shares 431 722 412 427 162 412 431 722 412 431 722 412 427 162 412 43 722 412
9.3 (Loss)earnings per share
(cents)
Basic (2 286) 3 207 (17 617) (1 586) 3 437 (2 258)
Headline (1 806) 3 208 (13 852) (1 847) 3 437 (5 285)
Diluted basic (2 260) 3 205 (17 416) (1 568) 3 434 (2 232)
Diluted headline (1 785) 3 206 (13 694) (1 826) 3 434 (5 225)
9.4 Headline Earnings
(Loss)/profit attributable to (9 755) 13 689 (75 190) (6 770) 14 667 (9 636)
shareholders
Deduct non-recurring items:
Loss/(profit) on disposal of (552) 5 2 638 (3 612) 1 294
property and equipment
Fair value adjustment on investment 3 515 - (2 584) 2 000 - (23 040)
properties
Fair value adjustment on trade - - 4 394 - - (481)
investment
Loss on disposal of CST - - 18 805 - - 4 530
Tax effect (916) - (7 185) 498 - 5 777
------------- ----------- ------------ ------------ ------------ --------------
(7 708) 13 694 (59 122) (7 884) 14 668 (22 556)
======== ======= ======= ======= ======= ========
NMBZ HOLDINGS LIMITED
for the six months ended 30 June 2005
10. SHARE CAPITAL
10.1 Authorised
The authorised ordinary share capital at 30 June 2005 is at the historical cost
of Z$140 million (December 2004 - Z$140 million) comprising 560 million ordinary
(December 2004 - 560 million) shares of Z$0.25 each.
10.2 Issued Fully Paid
The issued share capital at 30 June 2005 is at the historical cost of Z$107
million (December 2004 - Z$107 million) comprising 427 million (December 2004 -
427 million) ordinary shares of Z$0.25 each.
The inflation adjusted issued share capital at 30 June 2005 amounted to Z$76 378
million after taking into account the effect of IAS29 of Z$76 271 million.
10.3 Capital Reserves
INFLATION ADJUSTED HISTORICAL
Restated Restated
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2005 2004 2004 2005 2004 2004
Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
Statutory reserve fund 9 692 9 692 9 692 23 23 23
Share premium 182 475 129 776 182 475 24 907 580 24 907
Capital redemption 14 666 14 666 14 666 27 27 27
reserve
Other 1 174 413 1 174 291 53 291
----------- ------------ ------------ ------------ ---------- -----------
208 007 154 547 208 007 25 248 683 25 248
======= ======= ======= ======= ====== =======
NMBZ HOLDINGS LIMITED
for the six months ended 30 June 2005
11. DepositS and other accounts
11.1 Deposits and other accounts by type
INFLATION ADJUSTED HISTORICAL
Restated Restated
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2005 2004 2004 2005 2004 2004
Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
RBZ temporary liquidity 216 - 163 346 216 - 92 933
support
RBZ Productive sector 18 693 - 167 514 18 693 - 95 304
facility
Deposits from other banks 30 874 528 251 41 049 30 874 199 859 23 354
Other money market deposits 1 530 108 859 27 536 1 530 41 186 15 666
Current and deposit 225 040 503 607 281 471 225 040 190 535 160 138
accounts
---------- ---------- ---------- ---------- --------- ---------
Total deposits 276 353 1 140 717 680 916 276 353 431 580 387 395
Trade and other creditors 198 772 221 822 244 623 198 772 83 924 139 174
---------- ---------- ---------- ---------- --------- ---------
475 125 1 362 539 925 539 475 125 515 504 526 569
Less: Financial liabilities (87 961) (698 348) (77 002) (87 961) (264 327) (43 809)
held for trade (note 12.1)
----------- ---------- ----------- ----------- ----------- -----------
387 164 663 891 848 537 387 164 251 177 482 760
====== ====== ====== ====== ====== ======
11.2 Maturity analysis
INFLATION ADJUSTED HISTORICAL
Restated Restated
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2005 2004 2004 2005 2004 2004
Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
Withdrawals on demand 254 595 645 135 283 711 254 595 244 081 161 412
Maturing within one month 18 693 467 533 35 561 18 693 176 887 20 232
Maturing after one month 3 065 7 816 271 083 3 065 2 957 154 228
but within 6 months
Maturing after 6 months but - 20 233 90 561 - 7 655 51 523
within 12 months
---------- ------------- ---------- ---------- ---------- ----------
276 353 1 140 717 680 916 276 353 431 580 387 395
====== ======== ====== ====== ====== ======
NMBZ HOLDINGS LIMITED
for the six months ended 30 June 2005
11.3 Sectoral analysis of deposits
INFLATION ADJUSTED
Restated Restated
Unaudited Unaudited Unaudited
30 June 30 June 31Dec
2005 2004 2004
Z$ million % Z$ million % Z$ million %
Banks and other financial 24 304 9 528 251 46 162 452 24
institutions
Reserve Bank of Zimbabwe 18 909 7 - - 330 860 48
Telecommunications companies 7 834 3 6 275 1 39 -
Industrial companies 121 385 44 137 743 12 32 220 5
Agriculture 3 765 1 - - - -
Other deposits 76 330 28 448 640 39 147 093 22
Municipalities and parastatals 549 - 19 525 2 346 -
Mining Companies 23 277 8 283 - 7 906 1
------------- ---------- ------------- ----------- ----------- ----------
276 353 100 1 140 717 100 680 916 100
======= ===== ======== ====== ====== ======
11.4 Sectoral analysis of deposits
HISTORICAL
Unaudited Unaudited Audited
30 June 30 June 31 Dec
2005 2004 2004
Z$ million % Z$ million % Z$ million %
Banks and other financial 24 304 9 199 859 46 92 424 24
institutions
Reserve Bank of Zimbabwe 18 909 7 - - 188 237 48
Telecommunications companies 7 834 3 2 374 1 22 -
Industrial companies 121 385 44 52 114 12 18 331 5
Agriculture 3 765 1 - - - -
Other deposits 76 330 28 169 739 39 83 686 22
Municipalities and parastatals 549 - 7 387 2 197 -
Mining Companies 23 277 8 107 - 4 498 1
------------- ---------- ------------- ----------- ----------- ----------
276 353 100 431 580 100 387 395 100
======= ===== ======== ====== ====== ======
14% of total deposits are secured as at 30 June 2005 (28% - 31 December 2004)
NMBZ HOLDINGS LIMITED
for the six months ended 30 June 2005
12. FINANCIAL INSTRUMENTS HELD FOR TRADING
12.1 Financial liabilities held for trading
INFLATION ADJUSTED HISTORICAL
Restated Restated
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2005 2004 2004 2005 2004 2004
Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
Fixed term deposits 53 812 - 21 800 53 812 - 12 403
Liabilities discounted 13 891 572 259 29 995 13 891 216 509 17 065
Negotiable certificate of 20 258 126 389 25 207 20 258 47 818 14 341
deposits
------------ ------------ ----------- ------------ --------- ----------
87 961 698 648 77 002 87 961 264 327 43 809
======= ======= ======= ======= ====== ======
12.2 Financial assets held for trading
Government and public 28 117 375 846 16 721 28 117 142 198 9 513
sector securities
Bills receivable 15 793 114 690 26 360 15 793 43 392 14 997
------------ ------------ ------------ ------------ ------------ ------------
43 910 490 536 43 081 43 910 185 590 24 510
======= ======= ======= ======= ======= =======
12.3 Financial liabilities held for trading
Demand to 3 months 87 858 672 158 76 248 87 858 254 305 43 380
3 months to 1 year 103 58 754 103 22 429
1 year to 5 years - 26 432 - - 10 000 -
---------- ---------- ---------- ---------- ---------- ----------
87 961 698 648 77 002 87 961 264 327 43 809
====== ====== ====== ====== ====== ======
NMBZ HOLDINGS LIMITED
for the six months ended 30 June 2005
12.4 Financial assets held for trading
INFLATION ADJUSTED HISTORICAL
Restated Restated
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
30June 30 June 31 Dec 30 June 30 June 31 Dec
2005 2004 2004 2005 2004 2004
Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
Demand to 3 months 32 101 332 967 20 858 32 101 125 975 11 867
3 months to 1 year 11 809 46 455 13 434 11 809 17 576 7 643
1 year to 5 years - 111 114 8 789 - 42 039 5 000
---------- ---------- -------- ---------- -------- --------
43 910 490 536 43 081 43 910 185 590 24 510
====== ====== ===== ====== ===== =====
13. CASH AND CASH EQUIVALENTS
Balances with Reserve Bank of Zimbabwe
Statutory reserve 54 007 209 747 132 260 54 007 79 356 75 247
13.1 Balances with other banks and cash
Current, nostro 70 839 234 511 84 850 70 839 88 725 48 274
accounts and cash
----------- ----------- ----------- ------------ ----------- -----------
124 846 444 258 217 110 124 846 168 081 123 521
----------- ----------- ----------- ----------- ----------- -----------
13.2 Other
Government and public 28 117 375 846 16 721 28 117 142 198 9 513
sector securities
Bills receivable 15 793 114 690 26 360 15 793 43 392 14 997
---------- ---------- ----------- ----------- ---------- ---------
43 910 490 536 43 081 43 910 185 590 24 510
---------- ---------- ----------- ----------- ---------- --------
Total cash and cash 168 756 934 794 260 191 168 756 353 671 148 031
equivalents
====== ====== ===== ====== ===== =====
NMBZ HOLDINGS LIMITED
for the six months ended 30 June 2005
14. Advances and other accounts
14.1 Advances and other accounts
INFLATION ADJUSTED HISTORICAL
Restated Restated
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
30 June 30 June 31Dec 30June 30June 31Dec
2005 2004 2004 2005 2004 2004
Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
14.1.1 Total advances and
other accounts
Fixed term loans 10 091 336 768 186 511 10 091 127 413 106 112
Local loans and overdrafts 128 878 68 251 304 854 128 878 25 822 173 441
Other accounts 109 443 61 283 87 859 109 443 23 186 49 986
----------- ------------ --------------- ------------ ------------ -----------
248 412 466 302 579 224 248 412 176 421 329 539
======= ======= ========= ======= ======= =======
14.1.2 Maturity analysis
Demand to 3 months 181 245 135 026 295 044 181 245 51 086 167 860
3 months to 1 year 16 484 346 299 186 476 16 484 131 019 106 092
1 year to 5 years - 5 486 138 353 - 2 075 78 713
Over 5 years - 17 230 - - 6 519 -
------------ ----------- --------------- ------------ ------------ -----------
Total advances 197 729 504 041 619 873 197 729 190 699 352 665
Specific and general doubtful (46 129) (41 711) (78 470) (46 129) (15 781) (44 644)
debt provisions
Suspended interest (12 631) (57 311) (50 038) (12 631) (21 683) (28 468)
----------- ----------- ------------ ------------ ----------- -----------
138 969 405 019 491 365 138 969 153 235 279 553
Other accounts 109 443 61 283 87 859 109 443 23 186 49 986
----------- ----------- ------------ ------------ ----------- -----------
Total 248 412 466 302 579 224 248 412 176 421 329 539
======= ======= ======= ======= ======= =======
NMBZ HOLDINGS LIMITED
for the six months ended 30 June 2005
14.2 Sectoral analysis of utilizations
INFLATION ADJUSTED
Restated Restated
Unaudited Unaudited Unaudited
30 June 30 June 31 Dec
2005 2004 2004
Z$ million % Z$ million % Z$ million %
Industrials 100 110 47 356 351 58 299 758 47
Agriculture and horticulture 35 753 17 76 098 12 80 481 12
Conglomerates 9 843 5 28 710 5 25 597 4
Services 7 307 3 44 111 7 12 843 2
Mining 17 209 8 51 573 8 30 248 5
Food & beverages 12 985 6 62 552 10 22 823 3
Other 28 460 14 163 - 172 397 27
----------- -------- ----------- --------- ----------- ----------
211 667 100 619 558 100 644 147 100
======= ===== ======= ===== ====== ======
The above sectoral analysis comprises advances of Z$197 729 million (December
2004 - Z$619 873 million) and customers' indebtedness for acceptances of Z$13
938 million (December 2004 - Z$24 274 million).
14.3
Sectoral analysis of utilisations
HISTORICAL
Unaudited Unaudited Audited
30 June 30 June 31 Dec
2005 2004 2004
Z$ million % Z$ million % Z$ million %
Industrials 100 110 47 134 822 58 170 541 47
Agriculture and horticulture 35 753 17 28 791 12 45 788 12
Conglomerates 9 843 5 10 862 5 14 563 4
Services 7 307 3 16 689 7 7 307 2
Mining 17 209 8 19 512 8 17 209 5
Food & beverages 12 985 6 23 666 10 12 985 3
Other 28 460 14 62 - 98 082 27
---------- ----------- ------------ ----------- ------------ ------------
211 667 100 234 404 100 366 475 100
====== ======= ======= ====== ======= =======
The above sectoral analysis comprises advances of Z$197 729 million (December
2004 - Z$352 665 million) and customers' indebtedness for acceptances of Z$13
938 million (December 2004 - Z$13 810 million).
14.4 Risk concentrations
The material concentration of loans and advances are in the industrial sector
47% (2004 - 58%).
NMBZ HOLDINGS LIMITED
for the six months ended 30 June 2005
14.5 Provisions for doubtful debts
INFLATION ADJUSTED
Unaudited Unaudited
June 2005 Restated Dec 2004
Specific General Total Specific General Total
Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
At 1 January 68 752 9 718 78 470 22 910 12 931 35 841
Charge against profits 4 571 (1 577) 2 994 62 672 4 162 66 834
Bad debts written off (1 509) - (1 509) (3 763) - (3 763)
Monetary adjustment (29 637) (4 189) (33 826) (13 067) (7 375) (20 442)
------------ ----------- ------------- ------------ ------------- ------------
At 30 June 42 177 3 952 46 129 68 752 9 718 78 470
======= ====== ======= ======= ======= =======
14.6 Provisions for doubtful debts
HISTORICAL
Unaudited Audited
June 2005 Dec 2004
Specific General Total Specific General Total
Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
At 1 January 39 115 5 529 44 644 5 600 3 161 8 761
Charge against profits 4 571 (1 577) 2 994 35 656 2 368 38 024
Bad debts written off (1 509) - (1 509) (2 141) - (2 141)
------------ ----------- ------------- ------------ ----------- ------------
At 30 June 42 177 3 952 46 129 39 115 5 529 44 644
======= ====== ======= ======= ======= =======
14.7 Non performing loans and advances
INFLATION ADJUSTED HISTORICAL
Restated Restated
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
June June Dec June June Dec
2005 2004 2004 2005 2004 2004
Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
Total non performing loans 61 010 89 639 135 165 61 010 33 914 76 899
and advances
Specific provision for (42 177) (24 991) (68 752) (42 177) (9 455) (39 115)
doubtful debts
Interest in suspense (12 931) (57 311) (50 038) (12 631) (21 683) (28 468)
------------- ------------- ----------- ------------- ------------ ------------
6 202 7 337 16 375 6 202 2 776 9 316
======= ======= ====== ======= ======= ======
The residue on these accounts represents recoverable portions
covered by realisable security.
NMBZ HOLDINGS LIMITED
for the six months ended 30 June 2005
14.8 Credit to insiders
Exposures to insiders are being pro-actively managed under our
recoveries section.
15. TRADE INVESTMENT
INFLATION ADJUSTED HISTORICAL
Restated Restated
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
June June Dec June June Dec
2005 2004 2004 2005 2004 2004
Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
Takura Ventures (Private) 851 282 851 484 3 484
Ltd
Other 79 4 232 79 45 45 45
-------------- ------------- ------------- ------------ -------------- -------------
930 4 514 930 529 48 529
======== ======== ======== ======== ======== ========
16. QUOTED AND OTHER INVESTMENTS
Quoted investments 945 1 441 955 537 545 543
Unquoted investments 717 1 078 717 408 408 408
-------------- ------------- ------------- ------------ -------------- -------------
1 662 2 519 1 672 945 953 951
======== ======== ======== ======== ======== ========
17. PROPERTY AND EQUIPMENT
Cost 466 739 366 495 483 380 31 146 47 878 31 777
Accumulated depreciation (293 197) (61 085) (275 589) (8 396) (7 980) (5 263)
-------------- ------------- ------------- ------------ -------------- -------------
Net book value 173 542 305 410 207 791 22 750 39 898 26 514
======== ======== ======== ======== ======== ========
18 CONTINGENT LIABILLITIES
Contingent liabilities as at 30 June 2005 amounted to Z$12 771 million (31
December 2004 - Z$11 780 million).
19. EXCHANGE RATES
The following exchange rates have been used to translate the foreign balances to
Zimbabwe dollars at period end:-
30 June 30 June 31 Dec
2005 2004 2004
Z$ million Z$ million Z$ million
British sterling GBP1.00 17 997.24 9 660.59 11 846.34
United States Dollar USD1.00 9 879.84 5 347.98 6 200.00
NMB BANK LIMITED
for the six months ended 30 June 2005
CONSOLIDATED INCOME STATEMENTS
INFLATION ADJUSTED HISTORICAL
Restated Restated
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2005 2004 2004 2005 2004 2004
Note Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
Interest from lending 99 479 316 738 416 224 77 163 103 713 151 206
activities
Interest from investing a 23 579 50 156 148 243 18 093 15 030 56 475
activities
------------ ------------- ------------- ------------- ------------ -------------
123 058 366 894 564 467 95 256 118 743 207 681
Interest expense (102 (208 267) (369 735) (76 515) (67 181) (146 654)
250)
------------- ------------ ------------ ------------- ------------- ------------
Net interest income 20 808 158 627 194 732 18 741 51 562 61 027
Non-interest income b 18 809 9 132 45 438 14 354 3 079 35 064
Net foreign exchange 9 369 17 497 (12 919) 8 110 5 415 (7 010)
gains/(losses)
------------- ------------ ----------- -------------- ------------ ------------
Net operating income 48 986 185 256 227 251 41 205 60 056 89 081
Operating expenditure c (84 (113 223) (235 694) (46 262) (33 552) (72 462)
423)
Charge for bad and (2 994) (18 555) (66 834) (2 994) (7 020) (38 024)
doubtful debts
Gain/(loss) on net 37 365 (10 599) (65 846) - - -
monetary position
------------ ------------- ------------ ------------ -------------- ------------
(Loss)/profit before (1 066) 42 879 (141 123) (8 051) 19 484 (21 405)
taxation
Taxation (6 369) (18 401) 69 581 3 004 (4 082) 9 651
Financial institution - (2 574) (141) - (974) (80)
levy
------------ ------------- ------------ ------------ ------------ ------------
(Loss)/ profit (7 435) 21 904 (71 683) (5 047) 14 428 (11 834)
attributable to
ordinary shareholders
====== ======= ======= ======== ======= ======
(Loss)/earnings per
share (cents)
Basic d (47 968) 141 316 (462 471) (32 561) 93 084 (76 348)
Headline d (50 426) 141 348 (448 748) (48 665) 93 090 (169 065)
NMB BANK LIMITED
for the six months ended 30 June 2005
CONSOLIDATED BALANCE SHEETS
INFLATION ADJUSTED HISTORICAL
Restated Restated
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2005 2004 2004 2005 2004 2004
Note Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
SHAREHOLDER'S FUNDS
Share capital e 35 913 35 909 35 913 31 30 31
Capital reserves 234 094 180 634 234 094 25 208 643 25 208
Revenue reserves (154 346) (621) (146 911) (20 181) 35 456 (15 134)
----------- ---------- ----------- --------- --------- ----------
Total shareholder's funds 115 661 215 922 123 096 5 058 36 129 10 105
LIABILITIES
Deposits and other 385 296 658 497 845 864 385 296 249 136 481 239
accounts
Financial liabilities held 87 961 697 672 76 354 87 961 263 958 43 440
for trading
Amount owing to holding 40 106 70 40 40 40
company
Provision for current (3 335) 47 013 2 331 (3 335) 17 787 1 326
taxation
Acceptances 13 938 115 517 24 274 13 938 43 705 13 810
Deferred taxation 52 359 75 680 45 991 229 1 400 3 233
------------ ------------ ------------ ---------- ------------ -----------
651 920 1 810 407 1 117 980 489 187 612 155 553 193
======= ======= ======= ====== ======= ======
ASSETS
Balances with banks and f 124 214 442 588 216 001 124 214 167 449 122 890
cash
Financial assets held for f 43 910 490 536 43 081 43 910 185 590 24 510
trading
Advances and other 248 455 464 851 579 298 248 455 175 872 329 581
accounts
Customers' indebtedness 13 938 115 517 24 274 13 938 43 705 13 810
for acceptances
Quoted and other g 6 16 16 3 6 9
Investments
Investment properties h 63 628 - 63 628 36 200 - 36 200
Property and equipment i 157 769 296 899 191 682 22 467 39 533 26 193
------------ ------------ ------------ ------------ ------------ -----------
651 920 1 810 407 1 117 980 489 187 612 155 553 193
======= ======= ======= ======= ======= =======
NMB BANK LIMITED
for the six months ended 30 June 2005
CONSOLIDATED INFLATION ADJUSTED STATEMENT OF CHANGES IN EQUITY
Capital Reserves Revenue
Reserves
Share Share Statutory Accumulated
Capital Premium Reserve Other Profit/(loss) Total
Restated Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
Balances at 1 January 35 909 159 169 21 465 - 12 966 229 509
2004 - as previously
reported
Prior year restatements - - - - (28 511) (28 511)
---------- ----------- ---------- ---------- ----------- ------------
Balances at 1 January 35 909 159 169 21 465 - (15 545) 200 998
2004 - restated
Net profit for the six - - - - 21 904 21 904
months ended 30 June 2004
Dividends - - - (6 980) (6 980)
------------ ----------- ------------ ------------- ------------ ------------
Balances at 30 June 2004 35 909 159 169 21 465 - (621) 215 922
------------- ----------- ------------ ------------- ------------ ------------
Net loss for the six - - - - (93 587) (93 587)
months ended 31 December
2004
Revaluation of property - - - 761 - 761
Shares Issued 4 52 699 - - (52 703) -
----------- ----------- ------------ -------------- ------------ ------------
Balances at 31 December 35 913 211 868 21 465 761 (146 911) 123 096
2004
------------ ----------- ------------ -------------- ------------ ------------
Net loss for the six - - - - (7 435) (7 435)
months ended 30 June
2005
----------- ------------ ------------ -------------- ------------ ------------
Balances at 30 June 2005 35 913 211 868 21 465 761 (154 346) 115 661
======= ======= ======= ======== ======= =======
NMB BANK LIMITED
for the six months ended 30 June 2005
CONSOLIDATED HISTORICAL COST STATEMENT OF CHANGES IN EQUITY
Capital Reserves Revenue
Reserves
Share Share Statutory Accumulated
Capital Premium Reserve Other Profit/(loss) Total
Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
Balances at 1 January 2004 30 620 23 - 23 205 23 878
Net profit for the six - - - - 14 428 14 428
months ended 30 June 2004
Dividends - - - - (2 177) (2 177)
------------ ----------- ------------ --------- ------------ --------------
Balances at 30 June 2004 30 620 23 - 35 456 36 129
------------- ----------- ------------ --------- ------------ --------------
Net loss for the six months - - - - (26 262) (26 262)
ended 31 December 2004
Revaluation of property - - - 238 - 238
Shares issued 1 24 327 - - (24 328) -
------------ ----------- ------------ --------- ------------ -------------
Balances at 31 December 2004 31 24 947 23 238 (15 134) 10 105
------------- ----------- ------------ --------- ------------ -------------
Net loss for the six months - - - - (5 047) (5 047)
ended 30 June 2005
------------ ----------- ------------ --------- ------------ -------------
Balances at 30 June 2005 31 24 947 23 238 (20 181) 5 058
======= ======= ======= ===== ======= =======
NMB BANK LIMITED
for the six months ended 30 June 2005
CONSOLIDATED CASH FLOW STATEMENTS
INFLATION ADJUSTED HISTORICAL
Restated Restated
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2005 2004 2004 2005 2004 2004
CASHFLOW FROM OPERATING
ACTIVITIES Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
(Loss) /profit before taxation
and monetary adjustment (38 431) 53 478 (75 277) (8 051) 19 484 (21 405)
Non-cash items
Loss/ (profit) on disposal of
property and equipment (552) 5 2 638 (3 612) 1 294
Depreciation 26 983 5 516 67 794 2 428 1 761 3 686
Property and equipment
write-off 2 328 - 3 844 884 - 365
Investment properties fair value - - 441 - - (21 092)
adjustment
Charge for bad and doubtful debts 2 994 18 555 66 834 2 994 7 020 38 024
Monetary adjustment on amount - (58) (93) - - -
owing to Holding Company
Gain /(loss) on net monetary 37 365 (10 599) (65 846) - - -
position
------------- ------------- ------------- ------------- ------------- -------------
Operating cash flows before
changes in operating assets
and liabilities 30 687 66 897 335 (5 357) 28 266 (128)
Changes in operating assets and
liabilities:
Financial liabilities held for
trading 11 607 425 394 (195 918) 44 521 197 403 (23 115)
Deposits and other accounts (460 568) (50 473) 136 907 (95 943) 75 837 307 940
Advances and other accounts 327 849 136 163 (26 574) 78 132 (31 446) (216 159)
Financial assets held for trading - 10 607 10 607 - 2 593 2 593
------------- ------------- ------------- ------------- ------------- -------------
(90 425) 588 588 (74 643) 21 353 272 653 71 131
Taxation
Corporate tax paid (5 699) (8 934) (8 172) (4 661) (2 140) (2 141)
------------- ------------- ------------- ------------- -------------
Net cash inflow/ (outflows)
from (96 124) 579 654 (82 815) 16 692 270 513 68 990
operating activities
CASH FLOWS FROM INVESTING
ACTIVITIES
Proceeds on disposal of property
and equipment 7 059 58 884 5 320 22 308
Purchase of property and equipment (1 903) (38 806) (53 463) (1 294) (12 896) (17 296)
Proceeds from disposal of quoted
and other investmentsN 10 209 211 6 49 47
------------- ------------- ------------- ------------- ------------- -------------
Net cash inflows/ (outflows)
from investing activities 5 166 (38 539) (52 368) 4 032 (12 825) (16 941)
------------- ------------- ------------- ------------- -------------
Net cash inflow/ (outflows)
before (90 958) 541 115 (135 183) 20 724 257 688 52 049
financing activities
------------- ------------- ------------- ------------- ------------- ------------
CASH FLOWS FROM FINANCING
ACTIVITIES
Dividends paid - (6 980) (4 716) - (2 177) (2 177)
------------- ------------- ------------- ------------- ------------- -------------
- (6 980) (4 716) - (2 177) (2 177)
------------- ------------- ------------ -------------- ------------- ------------
Net increase/ (decrease) in
cash and (90 958) 534 135 (139 899) 20 724 255 511 49 872
cash equivalents
Cash and cash equivalents at
beginning 259 082 398 989 398 981 147 400 97 528 97 528
of the period
------------- ------------- ------------- ------------- -------------
CASH AND CASH EQUIVALENTS 168 124 933 124 259 082 168 124 353 039 147 400
AT END OF PERIOD ======== ======== ======== ======== ======== ========
NMB BANK LIMITED
for the six months ended 30 June 2005
a. INTEREST FROM INVESTING ACTIVITIES
INFLATION ADJUSTED HISTORICAL
Restated Restated
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2005 2004 2004 2005 2004 2004
Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
Gains less losses from investing 24 067 58 553 147 777 18 581 18 207 56 210
securities
(Loss)/ gain from marking to (488) (8 397) 466 (488) (3 177) 265
market
----------- ----------- ------------ ------------ ------------ -------------
23 579 50 156 148 243 18 093 15 030 56 477
====== ======= ======= ======= ======= =======
b. NON-INTEREST INCOME
Investment property fair value - - (441) - - 21 092
adjustment
Net commission and fee income 13 568 7 501 44 963 10 292 2 648 13 721
Gains less losses from quoted - 661 (677) - 211 18
and other investments
Profit/(loss) on disposal of 552 (5) (2 638) 3 612 (1) (294)
fixed assets
Other operating income 4 689 975 4 231 450 221 527
----------- ----------- ------------ ----------- ----------- ------------
18 809 9 132 45 438 14 354 3 079 35 064
======= ======= ======= ======= ======= =======
c. OPERATING EXPENDITURE
The operating profit is after
charging the following:
Administration costs 26 092 59 052 78 545 20 237 16 728 33 292
Depreciation 26 983 5 516 67 794 2 428 1 761 3 686
Staff costs 31 348 48 655 89 355 23 597 15 063 35 484
---------- ---------- ----------- ---------- ---------- ----------
84 423 113 223 235 694 46 262 33 552 72 462
====== ====== ======= ====== ====== ======
NMB BANK LIMITED
for the six months ended 30 June 2005
d. EARNINGS PER SHARE
The calculation of earnings per share is based on the following
figures.
d.1 (Losses)/earnings
INFLATION ADJUSTED HISTORICAL
Restated Restated
Unaudited Unaudited Unaudited Unaudited Audited
Unaudited
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2005 2004 2004 2005 2004 2004
Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
Basic (7 435) 21 904 (71 683) (5 047) 14 428 (11 834)
Headline (7 816) 21 909 (69 556) (7 543) 14 429 (26 205)
d.2 Number of shares
(million)
Weighted average shares in issue 15.5 15.5 15.5 15.5 15.5 15.5
d.3 (Loss)/earnings per
share (cents)
Basic (47 968) 141 316 (462 471) (32 561) 93 084 (76 348)
Headline (50 426) 141 348 (448 748) (48 665) 93 090 (169 065)
d.4 Headline earnings per share
The adjustments are as follows:
(Loss)/profit attributable to (7 435) 21 904 (71 683) (5 047) 14 428 (11 834)
shareholders
Deduct non-recurring items:
Profit on disposal of property and (552) 5 2 638 (3 612) 1 294
equipment
Fair value adjustment on investment - - 441 - - (21 092)
properties
Tax effect 171 - (952) 1 116 - 6 427
---------- -------- --------- --------- ---------- -----------
(7 816) 21 909 69 556 (7 543) 14 429 26 205
====== ===== ===== ===== ====== ======
NMB BANK LIMITED
for the six months ended 30 June 2005
e. SHARE CAPITAL
e.1 Authorised
The authorised ordinary share capital at 30 June 2005 is at the historical cost
figure of Z$50 million (December 2004 - Z$50 million) comprising 25 million
(December 2004 - 25 million) ordinary shares of Z$2.00 each.
e.2 Issued and fully paid
The issued share capital at 30 June 2005 is at the historical cost figure of
Z$31 million (2004 - Z$30 million) comprising 15.5 million (2004 - 15 million)
ordinary shares of Z$2.00 each.
f. CASH AND CASH EQUIVALENTS
INFLATION ADJUSTED HISTORICAL
Restated Restated
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2005 2004 2004 2005 2004 2004
f.1 Balances with banks Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
and cash
Balances with Central Bank 54 007 209 747 132 260 54 007 79 356 75 247
Curent, nostro accounts & 70 207 232 841 83 741 70 207 88 093 47 643
cash
----------- ------------- -------------- --------------- --------------- ------------
124 214 442 588 216 001 124 214 167 449 122 890
f.2 Financial assets held
for trading
Government and public 28 117 275 846 16 721 28 117 142 198 9 513
sector securities
Bills receivable 15 793 114 690 26 360 15 793 43 392 14 997
------------- -------------- ------------- ------------- ------------- -------------
Total cash and cash 168 124 933 124 259 082 168 124 353 039 147 400
equivalents
======= ======== ======== ======== ======== ========
NMB BANK LIMITED
for the six months ended 30 June 2005
g. QUOTED INVESTMENTS
The quoted investments represent shares held by the Bank of Z$3 million
at historical cost (Z$9 million - December 2004) and Z$6 million in inflation
adjusted terms (Z$16 million - December 2004).
h. INVESTMENT PROPERTIES
INFLATION ADJUSTED HISTORICAL
Restated Restated
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2005 2004 2004 2005 2004 2004
Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
Borrowdale Estate property 31 638 - 31 638 18 000 - 18 000
Borrowdale Race course property 31 990 - 31 990 18 200 - 18 200
---------- ---------- ---------- ---------- ---------- ----------
63 628 - 63 628 36 200 - 36 200
====== ====== ====== ====== ====== ======
h.1 Borrowdale Estate property
The investment property is in the Bank's subsidiary, Carey Farm (Private)
Limited. The Bank's beneficial interest therein is 100%. The subsidiary's only
asset is a certain piece of land situated in the District of Harare, called The
Remainder of Lot H of Borrowdale Estate measuring 89.2623 hectares (223.16
acres) in extent. The beneficial interest in the subsidiary arose from
shareholding acquired in settlement of a debt owed to the Bank amounting to $10
008 million. This acquisition is in compliance with Section 34 of the Banking
Act (Chapter 24:20).
The land was valued by an independent and professional valuer in December 2004.
The total value of the unencumbered freehold land was Z$18 000 million and has
been accounted for in investment properties.
h.2 Borrowdale Race course property
This investment property which is held by the Bank is Stand 19207 Harare
Township of Stand 19206 measuring 4.4506 hectares in extent. The land was
valued by an independent and professional valuer in December 2004. The total
value of the unencumbered freehold land was Z$18 200 million and has been
accounted for in investment properties.
NMB BANK LIMITED
for the six months ended 30 June 2005
i. PROPERTY AND EQUIPMENT
INFLATION ADJUSTED HISTORICAL
Restated Restated
Unaudited Unaudited Unaudited Unaudited Unaudited Audited
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2005 2004 2004 2005 2004 2004
Z$ million Z$ million Z$ million Z$ million Z$ million Z$ million
Cost 412 615 357 589 459 297 30 821 47 308 31 358
Accumulated depreciation (254 846) (60 690) (267 615) (8 354) (7 775) (5 165)
----------- ------------ ------------ ------------ ----------- ------------
Net book value 157 769 296 899 191 682 22 467 39 533 26 193
======= ======= ======= ======= ====== =======
j. CAPITAL ADEQUACY
HISTORICAL
Unaudited Unaudited Audited
30 June 30 June 31 Dec
2005 2004 2004
Z$ million Z$ million Z$ million
Share capital 31 30 31
Share premium 24 970 643 24 970
Retained earnings (20 181) 35 456 (15 134)
------------ ------------ ------------
4 820 36 129 9 867
Credit to insiders (7 692) (14 084) (7 810)
------------- ------------- ------------
Tier 1 capital (2 872) 22 045 2 057
Tier 2 capital
Subordinated debt 40 40 40
Revaluation reserves 238 - 238
General provisions 3 140 4 931 3 614
------------ ------------ ------------
Total capital base 546 27 016 5 949
======= ======= =======
Total risk weighted assets 367 866 322 650 437 358
------------ ------------ ------------
Tier 1 Capital adequacy ratio (0.78%) 6.83% 0.47%
Total Capital adequacy ratio 0.15% 8.37% 1.36%
SECRETARY AND REGISTERED OFFICE
Secretary
M B Narotam
Email: muneshn@nmbz.co.zw
Registered Offices
1st Floor NMB Centre
Unity Court George Silundika Avenue/
Cnr 1st Street/Kwame Nkrumah Avenue Leopold Takawira Street
Harare Bulawayo
Zimbabwe Zimbabwe
Telephone +263 4 759651 +263 9 70169
Facsimile +263 4 759648 +263 9 68535
Website: http://www.nmbz.co.zw
Email: enquiries@nmbz.co.zw
Auditors
KPMG Chartered Accountants (Zimbabwe)
Mutual Gardens
100 The Chase (West)
Emerald Hill
Harare
Zimbabwe
Transfer Secretaries
In Zimbabwe In UK
First Transfer Secretaries Computershare Services PLC
4th Floor, Gold Bridge North 36 St Andrew Square
Eastgate Building Edinburgh
Cnr. Robert Mugabe/S Nujoma EH2 2YB
P O Box 11 UK
Harare
Zimbabwe
Legal Practitioners to the Company
In Zimbabwe In UK
Kantor and Immerman Dechert
MacDonald House 2 Serjeants' Inn
10 Selous Avenue London EC4Y 1LT
Harare UK
Zimbabwe
This information is provided by RNS
The company news service from the London Stock Exchange
END
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