Absa Bank Botswana : RESTATEMENT NOTICE

Absa Bank Botswana Limited ("the Bank") notice of restatement

The Bank hereby wishes to notify our valuable shareholders of restatement of the Bank's previously reported annual financial statements in line with the requirements of Section 5.6c of the Botswana Stock Exchange Listing Rules. During the year, the Bank identified the need to make once off prior period adjustments. The errors have been corrected by restating each of the affected financial statement line items for the period 2021 and 2022 respectively as per below;

Reclassification of fee and commission income (A)

Certain fee and commission expenses have been reclassified as fee and commission income in accordance with the holding company's accounting policy. This reclassification has had no impact on the net fee and commission income. This misclassification does not have an impact on the statement of comprehensive income, the statement of financial position, the statement of changes in equity or earnings per share.

Write off of balances considered to be irrecoverable (B)

Upon reviewing identified prior years balances, the Bank has responsibly addressed the recoverability of these items by writing off the balances in the periods in which they relate to. Following this evaluation these balances were written off as irrecoverable. The net impact of these adjustments amounted to (P3,242 million) (A portion of the balance being P1,110 million relating to accrued interest write off and P3,479 million relating to foreign exchange debit balances accumulated on balance sheet and the (P1,347 million) retained earnings alignment)Amounts written off had an impact on the statement of comprehensive income, the statement of financial position, the statement of changes in equity and earnings per share as disclosed below.

Treatment of short-term incentive amount (C)

The short term incentive relating to the 2022 financial year was approved after that reporting period, but prior to the authorisation of the related financial statements. Consequently, it should have been recognised in that financial year as an adjusting post balance sheet event. The total short term incentive amount that was regarded as a prior year adjusting event amounted to P14,087 million. This correction had an impact on the statement of comprehensive income, statement of financial positions and earnings per share.

Reclassification of cash and cash equivalents (D)

As previously disclosed in the June 2023 interim results, the primary reserve balance is included as part of cash and cash equivalents since it represents readily available funds utilized by the Bank in its day-to-day operations. This followed the IFRIC Agenda decision Demand Deposits with Restrictions on Use arising from a Contract with a Third Party and should have been applied as a change in accounting policy for the year ended 31 December 2022. This restatement had no impact on the profit after tax or any line item in the statement of financial position, however impacted statement of cashflows.

Purchase of trading portfolio assets and Proceeds from disposal of trading portfolio assets (E)

These amounts were previously classified under Net cash used in investing activities. These have now been classified under Net cash generated from operating activities. Additionally, interest on lease liabilities previously classified under financing activities is now classified under operating activities. Reference to above restatement (B), movement in loans and advances to customers was restated on the cashflow.

The details of these items of restatement are disclosed below and are accordingly set out in our audited annual financial statements for the year ended 31 December 2023, as released on 28 March 2024.

Reclassification adjustments and correction of prior period errors

Statement of Comprehensive Income

Statement of Financial Position

Group - 2022

Group - 2022

Previously reported

AdjustmentRestated

P '000

Fee and commission income (A) Fee and commission expense (A) Staff costs (C)

Administration and general expenses (B) & (C) Profit before tax

Taxation (B) & (C) Profit for the year

Profit before tax

Weighted average number of shares Earnings per share (thebe)

590,272

(140,061)

(471,887)

(332,492)

880,022

• (17,329) 862,693

(207,942)

4,128

(203,814)

672,080

• (13,201) 658,879

  672,080 852,161 79

• (13,201) 658,879 - 852,161

(2)

77

P '000 (76,294) 76,294 (14,087) (3,242)

P '000 513,978

Previously reported

AdjustmentRestated

P '000

P '000

P '000

Loans and advances to banks (B)

• (63,767) Loans and advances to customers (B)

• (485,974) Other receivables (B)

• (335,734) Deferred tax assets (B) & (C)Taxation refundable (B) & (C)

Other payables (B) & (C)

Fair value reserve (B)

Retained income (B) & (C)

1,519,259

(135) 1,519,124

16,347,768

• (2,016) 16,345,752

  204,333

• (19,089) 185,244

101,033

3,099 104,132

13,873

1,027 14,900

389,592

33,193 422,785

(26,774) 2,775,132

(580) (49,730)

(27,354) 2,725,402

Company - 2022

Company - 2022

Previously reported

AdjustmentRestated

P '000

Previously reported

AdjustmentRestated

P '000

P '000

P '000

Loans and advances to banks (B)

Loans and advances to customers (B)Fee and commission income (A) Fee and commission expense (A) Staff costs (C)

Administration and general expenses (B) & (C) Profit before tax

Taxation (B) & (C) Profit for the year

539,896

(138,542)

76,294 (62,248)

(471,887)

• (14,087) (485,974)

  (330,060)

• (3,242) (333,302)

862,120

(17,329)

(205,942)

656,178

4,128 (13,201)

844,791 (201,814) 642,977

P '000 (76,294)

P '000 463,602

Other receivables (B)

Deferred tax assets (B) & (C)

Taxation refundable (B) & (C)

Other payables (B) & (C)Fair value reserve (B)

Retained income (B) & (C)

1,519,259

(135) 1,519,124

16,347,768

• (2,016) 16,345,752

  199,964

• (19,089) 180,875

99,229

3,099 102,328

9,999

1,027 11,026

385,327

33,194 418,521

(26,774) 2,708,383

(580) (49,729)

(27,354) 2,658,654

Group - 2021

Loans and advances to banks (B)

Loans and advances to customers (B)

Other receivables (B)

Deferred tax assets (B) & (C)

Taxation refundable (B) & (C)

Other payables (B) & (C)

Current tax payable (B) & (C)

Previously reported

AdjustmentRestated

P '000

P '000

P '000

Fair value reserve (B)

Retained income (B) & (C)

Company - 2021

Loans and advances to banks (B)

Loans and advances to customers (B)

Other receivables (B)

Deferred tax assets (B) & (C)

Other payables (B) & (C)

Current tax payable (B) & (C)

1,183,600

• (134) 1,183,466

  14,924,321

• (907) 14,923,414

121,345

• (19,089) 102,256

  107,787 - 409,509 21,523

• (7,732) 100,055

1,445 1,445 15,630 425,139 (4,938) 16,585

(22,306) 2,435,073

(581) (36,528)

(22,887) 2,398,545

Previously reported

AdjustmentRestated

P '000

P '000

• (134) 1,183,466

• (907) 14,923,414

(19,089) 101,425 (7,732) 97,589

408,768 22,968

15,630 424,398 (4,938) 18,030

(22,306) 2,391,205

(581) (36,528)

(22,887) 2,354,677

P '000 1,183,600 14,924,321 120,514 105,321

Fair value reserve (B)

Retained income (B) & (C)

Statement of Cash Flows

Group - 2022

Cash used in operations (D)& (E)

Net increase in loans and advances to customers (E )

Net cash generated from operating activities (D)&(E )

Cash and cash equivalents at the beginning of the year (D)

Previously reported

AdjustmentRestated

(1,467,287)

1,109

(1,466,178)

69,628 4,445,272

(147,996)

(78,368)

150,000

4,595,272

Company - 2022

Cash used in operations (D)& (E)

Net increase in loans and advances to customers (E )

Net cash generated from operating activities (D)&(E )

Cash and cash equivalents at the beginning of the year (D)

Profitability ratios: Cost to income ratio

Previously reported

AdjustmentRestated

(1,467,287)

1,109

(1,466,178)

69,628 4,445,272

(147,996)

(78,368)

150,000

4,595,272

P '000 (380,769)

P '000 (1,244)

P '000 (382,013)

2022 reported

2022 restated

Return on Equity (ROE) 23.16% 23.29%Return on Assets (ROA)Headline earnings 445,938

Capital Adequacy ratio: Capital Adequacy Ratio

52% 53%

2.96% 2.90% 455,805

21.95% 21.68%

P '000 (365,886)

P '000 (1,244)

P '000 (367,130)

By order of the Board 28 March 2024

For more information, please contact:

Puseletso Nyamambi

Acting Head of Compliance Absa Bank Botswana [e-mail]

Yonta Leburu

Company Secretary

Absa Bank Botswana [e-mail]