ZB Financial : 2022 HY Results & Audit Review

Inflation Adjusted Financial Highlights

Total assets		Total capital and reserves		Net profit after tax

13%	20%	165%
30 Jun 2022		30 Jun 2022		30 Jun 2022
ZW$124,811bn		ZW$44,062bn		ZW$6,069bn
31 Dec 2021		31 Dec 2021		30 Jun 2021
ZW$110,538bn		ZW$44,062bn		ZW$2,287bn

Return on equity		Liquidity ratio		Cost to income ratio

12pps		23pps		24pps
30 Jun 2022		30 Jun 2022		30 Jun 2022
25%	84%	45%
31 Dec 2021		31 Dec 2021		31 Dec 2021
13%	62%	69%

pps - percentage points

CHAIRMAN'S STATEMENT

Operating Environment:

For the half year to 30 June 2022, the major issues in the domestic operating environment continued to be instability in the exchange rate regime and worsening inflation profile. The local currency depreciated by 237.1% against the USD from US$1: ZW$108.67 on 1 January 2022 to US$1: ZW$366.27 on 30 June 2022 - the local currency depreciated the most in Q2 2022, by 157.2%, from US$1: ZW$142.42.

Meanwhile, year on year inflation averaged 103.2%, whilst month on month inflation averaged 14.3%, between January 2022 and June 2022. Although the annual inflation outturn for the half year to 30 June 2022 improved from the comparative period in 2021, it is worth noting that, where in the same period in prior year annual inflation was on a downward trajectory, in 2022 year on year inflation is actually on an upward trajectory, and monthly inflation is now in double digit. Aside from the currency depreciation, the worsening inflation profile was also impacted by the pass-through effects from rising global inflation occasioned by the Russia-Ukraine war, which resulted in rising international commodity prices.

A great improvement was recorded in COVID-19 cases during the period under review, with the worst of the pandemic seemingly being behind us now. Business operations were conducted at near full capacity, as the economy continues to recover from outbreak of the Corona virus.

Group Performance:

For the six months ending 30 June 2022 the Group posted inflation adjusted net earnings after taxation of ZW$6.069bn, an increase of 165% over the prior year comparative period whilst in historical cost terms the net earnings after taxation increased by 2 001% to ZW$20.370bn. This performance was underpinned by growth in inflation adjusted total assets of 13% to ZW$124.811bn (31 December 2021: ZW$110.538bn) and in historical cost terms total assets grew by 135% to ZW$116.961bn (31 December 2021: ZW$49.850bn). The financial performance is discussed in greater detail by the Group Chief Executive in his report.

Capital Requirements:

As at 30 June 2022, all Group companies, with the exception of ZB Building Society, were in compliance with prescribed minimum capital requirements. The Group is finalising on options available to address the capital adequacy challenges at ZB Building Society, which are expected to be completed by 31 December 2022.

Dividends:

The Board has declared an interim dividend of ZW77.18 cents per share for the period ending 30 June 2022. A separate dividend notice will be published to this effect.

Compliance & Regulatory Issues:

The Group has dealt with the majority of the governance issues which were the subject of a Corrective Order issued by the Reserve Bank of Zimbabwe (RBZ) on 7 March, 2017 and reviewed in March 2018. The Group has made its submissions to RBZ and it awaits the lifting of the order upon satisfactory review.

Directorate:

Mrs. E. N. Mungoni was appointed as Group Finance Director with effect from 1 January 2022. I wish her success in this new role.

Outlook:

The domestic economy is projected to maintain the growth momentum in 2022 and beyond. The Government of Zimbabwe has projected 2022 GDP growth of 4.6%. Growth is expected to be underpinned by higher output in the accommodation and food services (tourism), mining, manufacturing, and construction sectors of the economy.

The Group's strategic priority for the remaining months of 2022 is to continuously seek ways to preserve its capital from inflation-induced value erosion. In addition, a significant focus will be targeted at completing the sprints of the Organizational Transformation Programme with the goal of making happy customers through the provision of service excellence; and also enhancing group performance outturn.

Conclusion:

I wish to extend my appreciation to all our valued stakeholders, for the continued support to the ZBFH Group. I would also like to express my gratitude to the Board, Management and Staff, for their collective contributions to the notable performance despite a challenging operating environment.

1. Chiromo Chairman

30 August, 2022

GROUP CHIEF EXECUTIVE'S REPORT

Introduction:

The Group's primary financial statements are adjusted for inflation in terms of International Accounting Standards (IAS) 29 - Financial Reporting in Hyperinflationary Economies.

Historical cost financial statements have been issued for information purposes only.

Performance Outturn:

For the half year to June 2022, the Group recorded a 147% rise in inflation adjusted total income, from ZW$8.446bn in 2021 to ZW$20.877bn and a 779% increase to ZW$25.725bn in historical cost terms. This performance outturn was mainly underpinned by a 1 039% rise in other operating income, which rose from ZW$0.979bn (Historical cost of ZW$0.326bn) in June 2021 to ZW$11.148bn (Historical cost of ZW$10.913bn) in June 2022, followed by banking commissions and fees which rose from ZW$3.353bn (Historical cost of ZW$1.080bn) in June 2021 to ZW$3.885bn in 2022 (Historical cost of ZW$2.603bn), representing a 16% improvement. Fair value adjustments also contributed significantly, rising by 99% from ZW$1.513bn (Historical cost of ZW$0.696bn) in June 2021 to ZW$3.012bn (Historical cost of ZW$10.994bn) in June 2022.

In inflation adjusted terms, net interest income registered rose by 55%, from ZW$2.649bn in 2021 to ZW$4.106bn in 2022 whilst it went up by 179% to ZW$2.368bn in historical cost terms. Inflation adjusted loan impairment charges rose by 207%, from ZW$0.747bn (Historical cost of ZW$0.249bn) in June 2021 to ZW$2.290bn (Historical cost of ZW$1.761bn) in June 2022. Inflation adjusted net income from lending activities fell by 5%, from ZW$1.902bn in June 2021 to ZW$1.817bn in June 2022. However, historical net income from lending activities arose by 1% to ZW$0.607bn.

Net insurance income increased by 45%, from ZW$0.698bn (Historical cost of ZW$0.223bn) in June 2021 to ZW$1.016bn (Historical cost of ZW$0.608bn) in June 2022, on the back of a 43% rise in gross premiums from ZW$2.044bn in June 2021 to ZW$2.933bn in June 2022 whilst it improved by 215% to ZW$2.075bn in historical cost terms.

Meanwhile, the Group recorded a 58% increase in inflation adjusted operating costs, from ZW$5.970bn in June 2021 to ZW$9.413bn in June 2022, largely emanating from upward pressure on cost structures resulting from the inflationary environment. Historical operating costs increased by 241% from ZW$1.867bn in June 2021 to ZW$6.374bn in June 2022.

Profit from ordinary activities grew by 363%, from ZW$2.475bn (Historical cost of ZW$1.060bn) in June 2021 to ZW$11.465bn (Historical cost of ZW$19.350bn in June 2022).

In inflation adjusted terms, net profit registered a 165% increase, from ZW$2.287bn attained in June 2021 to ZW$6.069bn in June 2022 and a 2 001% growth to ZW$20.370bn in historical cost terms.

Meanwhile, the Group's total assets increased by 13% in inflation adjusted terms, from ZW$110.538bn as at 31 December 2021 to ZW$124.811bn as at 30 June 2022. In historical cost terms, total assets grew by 135%, from ZW$49.850bn as at 31 December 2021 to ZW$116.961bn as at 30 June 2022

Deposits and other related funding account balances grew marginally from ZW$43.060bn as at 31 December 2021 to ZW$43.106bn as at 30 June 2022, whereas in historical cost terms, deposits and other accounts improved by 119% to ZW$43.106bn.

The Group's inflation adjusted total equity increased by 20%, from ZW$44.062bn (Historical cost of ZW$19.488bn) as at 31 December 2021 to ZW$52.776bn (Historical cost of ZW$46.599bn) as at 30 June 2022, underpinned by the positive performance outturn for the period, as well as gains on the revaluation of properties and equipment.

Operations Review:

Banking Operations:

ZB Bank Limited's inflation adjusted net profit after tax improved from ZW$1.474bn in 2021 to ZW$5.148bn for the period ending 30 June 2022 and it registered an improvement of 2 110% to ZW$12.973bn in historical cost terms. The Bank's total assets increased from ZW$81.062bn as at 31 December 2021 to ZW$91.331bn as at 30 June 2022, representing a 12.7% increase. The Bank's asset base in historical terms grew by 128% to ZW$83.827bn as at 30 June 2022.

ZB Building Society's inflation adjusted net profit after tax improved from ZW$191.76m in June 2021 to ZW$1.037bn for the period ending 30 June 2022 and an increase of 3 282% in historical cost terms. The Society's total assets increased from ZW$6.427bn (Historical cost of ZW$2.935bn) as at 31 December 2021 to ZW$7.492bn (Historical cost of ZW$7.444bn) as at 30 June 2022, representing a 17% increase.

Insurance Operations:

ZB Reinsurance's net profit after tax in inflation adjusted term, improved from ZW$277.56m in 2021 to ZW$990.70m for the period ending 30 June 2022 and it recorded a historical cost improvement of 2 514% to ZW$2.442bn. The company's total assets increased from ZW$4.073bn (Historical cost of ZW$1.861bn) as at 31 December 2021 to ZW$5.660bn (Historical cost of ZW$5.634bn) as at 30 June 2022, representing a 203% increase.

The company maintained good relations with its cedants and retrocession partners during the period. Expansion into the Botswana market is now at an advanced stage, as the company opened for business on 1 June 2022.

ZB Life's inflation adjusted net profit after tax increased from ZW$599.20m in June 2021 to ZW$1.285bn for the period ending 30 June 2022. In historical cost terms, net profit after tax improved by 1 686% to ZW$3.570bn. The company's total assets increased from ZW$12.889bn (Historical cost of ZW$5.852bn) as at 31 December 2021 to ZW$14.189bn (Historical cost of ZW$13.978bn) as at 30 June 2022, representing a 10% increase.

Other Strategic Developments:

The Group continued to progress its organisational transformation program during the review period. The program is designed to transform the organisational design into a more people-centric one, and to enhance the customer journey in order to delight the Group's customers through a combination of digitalisation and service excellence.

As part of the transformation, the Group has come up with new structures designed to remove silos in its operations, and is currently making new appointments in line with the new structure - this exercise is scheduled for completion in Q3 2022.

The Group also continued to progress the conversion of branches into one-stop customer service centres, with 14 branches having been converted to service centres as at 30 June 2022.

Furthermore, in its drive to continuously progress environmental, social and governance (ESG) tenets, the Group continues to record progress in its quest to attain certification under the Sustainability Standards & Certification Initiative (SSCI) being driven by the European Organisation for Sustainable Development (ESOD) with guidance from the Reserve Bank of Zimbabwe (RBZ) - the Group is targeting certification by end of 2022.

Group Human Resources and Training:

Despite the operating environment progressively becoming less competitive relative to other countries in the region and beyond, staff attrition in the Group remained within acceptable levels.

During the period under review, the Group successfully launched a new organisational design which is currently being implemented. The Group also embarked on a programme of staff training and development to facilitate transformation into a high performing organisational culture.

Industrial relations remained cordial during the period under review.

Appreciation:

I extend my gratitude to our valued customers and stakeholders for their continued support and commitment to the ZBFH Group.

I also express my appreciation to Management and Staff team for their contribution to the half year performance.

Finally, I would like to thank the Board for its valuable contribution and wise counsel.

S. T. Fungura

Group Chief Executive Officer

30 August, 2022

ZBFH 257

1

AUDITOR'S STATEMENT

These condensed consolidated inflation adjusted interim financial results of ZB Financial Holdings Limited for the half year financial period ended 30 June 2022, have been reviewed by Messrs KPMG Chartered Accountants (Zimbabwe). A qualified conclusion has been expressed because of the effect of prior year non- compliance with International Accounting Standard 28, Investments in Associates and Joint Ventures, IAS 8, Accounting policies, Changes in Accounting Estimates and Errors and IFRS 13 Fair Value Measurement affecting comparability of prior period's numbers. A copy of the auditor's conclusion is available for inspection at the ZB Financial Holdings' registered office. The engagement partner for this review is Michael de Beer (PAAB Practicing Certificate Number 0369).

CONDENSED CONSOLIDATED INFLATION ADJUSTED INTERIM STATEMENT OF FINANCIAL POSITION As at 30 June 2022

			Inflation adjusted	Historical cost
			Reviewed	Audited	Unreviewed	Unaudited
			30 Jun 2022	31 Dec 2021	30 Jun 2022	31 Dec 2021
	Notes	ZW$	ZW$	ZW$	ZW$
ASSETS
Cash and cash equivalents			28 954 067 340	21 261 431 494	28 954 067 340	9 712 078 202
Treasury bills	3		7 337 967 034	5 276 634 384	7 337 967 034	2 410 330 922
Mortgages and other advances	4.1		20 762 092 597	26 779 987 780	20 762 092 597	12 232 917 414
Financial assets at fair value
through profit or loss			7 592 251 347	8 919 719 290	7 592 251 347	4 074 467 484
Financial assets held at amortised cost	1 108 526 198	1 294 168 359	1 108 526 198	591 167 359
Investments in associates			11 748 951 622	11 261 377 946	11 815 141 076	4 816 276 853
Inventories			273 551 799	173 028 345	196 020 983	72 791 173
Trade and other receivables			8 849 460 689	4 361 843 230	8 849 460 689	1 992 460 506
Investment properties	5.1		13 231 952 001	9 739 525 678	13 231 952 001	4 448 949 501
Right of use assets	6		821 370 447	484 583 306	310 721 443	102 568 596
Property and equipment	7		23 286 038 554	20 527 917 088	16 348 672 726	9 373 518 085
Intangible assets	8		760 122 572	443 207 530	301 142 377	22 206 622
Deferred tax assets			84 991 082	14 103 160	153 219 504	101 233
Total assets			124 811 343 282	110 537 527 590	116 961 235 315	49 849 833 950
LIABILITIES
Deposits and other accounts	9		43 106 109 672	43 060 376 684	43 106 109 672	19 669 689 027
Short term borrowings			478 706 849	882 962 949	478 706 849	403 331 507
Trade and other payables			11 245 290 691	9 308 026 097	11 245 290 691	4 251 843 409
Current tax liabilities			1 055 649 001	263 451 378	1 055 649 001	120 342 809
Long term borrowings	11		17 596 362	37 101 405	17 596 362	16 947 671
Life assurance funds			6 985 478 501	6 922 860 044	6 985 478 501	3 162 315 677
Offshore borrowings			3 934 977 887	1 440 282 351	3 934 977 887	657 911 243
Deferred tax liabilities			4 924 238 567	4 298 828 598	3 251 553 018	1 959 555 227
Lease liabilities	10		287 136 187	262 016 880	287 136 187	119 687 540
Total liabilities			72 035 183 717	66 475 906 386	70 362 498 168	30 361 624 110
EQUITY
Share capital			255 856 380	255 856 380	1 751 906	1 751 906
Share premium			3 955 133 961	3 955 133 961	27 081 696	27 081 696
Other components of equity			21 680 314 732	18 452 639 262	15 002 993 330	8 077 241 786
Retained income			19 718 418 043	15 853 636 352	24 342 082 384	8 721 358 380
Functional currency translation
reserve			-	-	101 292 105	101 292 105
Attributable to equity holders
of parent			45 609 723 116	38 517 265 955	39 475 201 421	16 928 725 873
Non-controlling interests			7 166 436 449	5 544 355 249	7 123 535 726	2 559 483 967
Total equity			52 776 159 565	44 061 621 204	46 598 737 147	19 488 209 840
Total equity and liabilities			124 811 343 282	110 537 527 590	116 961 235 315	49 849 833 950

CONDENSED CONSOLIDATED INFLATION ADJUSTED INTERIM STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the half year ended 30 June 2022

	Inflation adjusted	Historical cost
	Reviewed	Reviewed	Unreviewed	Unreviewed
	30 Jun 2022	30 Jun 2021	30 Jun 2022	30 Jun 2021
Notes	ZW$	ZW$	ZW$	ZW$

CONDENSED CONSOLIDATED INFLATION ADJUSTED INTERIM STATEMENT OF CHANGES IN EQUITY

For the half year ended 30 June 2022

									Reviewed Inflation adjusted
								Property and					Attributable
									equipment		Financial				to equity		Non
			Share		Share		General	revaluation		assets		Retained		holders of	controlling
			capital		premium		reserve		reserve	at FVTOCI		income		parent		interests	Total
			ZW$		ZW$		ZW$		ZW$		ZW$		ZW$		ZW$		ZW$	ZW$
Balance at 1 January 2022		255 856 380	3 955 133 961	46 227 102	18 410 246 967		(3 834 807)	15 853 636 352	38 517 265 955	5 544 355 249	44 061 621 204
Changes in equity for 2022
Profit or loss
Profit for the period			-		-		-		-		-	4 458 132 713	4 458 132 713	1 611 214 673	6 069 347 386
Other comprehensive income, net of tax
Revaluation of property			-		-		-	3 099 354 418		-		- 3 099 354 418		14 364 912	3 113 719 330
Fair value gain on financial assets at FVTOCI			-		-		-		-	126 237 989		-		126 237 989		-	126 237 989
Transaction with owners of the parent
Dividends paid			-		-		-		-		-	(593 351 022)		(593 351 022 )		(3 498 385)	(596 849 407)
Effects of inflation adjustments			-		-		-		-		2 083 063		-		2 083 063		-	2 083 063
Balance at 30 June 2022		255 856 380	3 955 133 961	46 227 102	21 509 601 385	124 486 245	19 718 418 403	45 609 723 116	7 166 436 449	52 776 159 565
Balance 1 January 2021		255 856 380	3 955 133 961	46 227 102	6 986 836 301		(6 310 053)	12 660 956 759	23 898 700 450	4 384 171 066	28 282 871 516
Changes in equity for 2021
Profit or loss
Profit for the period			-		-		-		-		-	1 870 998 492	1 870 998 492		416 392 730	2 287 391 222
Other comprehensive income, net tax
Fair value gain on financial assets at FVTOCI			-		-		-		-		(2 986 470)		-		(2 986 470 )		-	(2 986 470)
Effects of inflation adjustments			-		-		-		-		1 081 662		-		1 081 662		-	1 081 662
Balance at 30 June 2021		255 856 380	3 955 133 961	46 227 102	6 986 836 301		(8 214 861)	14 531 955 251	25 767 794 134	4 800 563 796	30 568 357 930
									Unreviewed and Unaudited Historical cost
					Functional			Property and					Attributable
					currency			equipment	Financial			to equity	Non
	Share	Share	translation	General	revaluation	assets	Retained	holders of	controlling
	capital	premium	reserve	reserve	reserve	at FVTOCI	income	parent	interests	Total
	ZW$	ZW$	ZW$	ZW$		ZW$	ZW$	ZW$	ZW$	ZW$	ZW$
Balance at 1 January 2022	1 751 906	27 081 696	101 292 105	5 817 958	8 073 175 544	(1 751 716) 8 721 358 380	16 928 725 873	2 559 483 967 19 488 209 840
Changes in equity for 2022
Profit or loss
Profit for the period	-		-		-			-		-	- 15 848 461 733	15 848 461 733	4 521 069 475 20 369 531 208
Other comprehensive income, net of tax
Revaluation of property	-		-		-		-	6 799 513 556		-		-	6 799 513 556	45 658 932 6 845 172 488
Fair value gain on financial assets at FVTOCI	-		-		-		-		-	126 237 988		-	126 237 988	-	126 237 988
Transaction with owners of the parent
Dividends paid	-		-		-		-		-		-	(227 737 729) (227 737 729)	(2 676 648 ) (230 414 377 )
Balance at 30 June 2022	1 751 906	27 081 696	101 292 105	5 817 958	14 872 689 100	124 486 272 24 342 082 384	39 475 201 421	7 123 535 726 46 598 737 147
Balance 1 January 2021	1 751 906	27 081 696	101 292 105	5 817 958	2 406 801 864	(1 793 231) 3 844 673 945	6 385 626 243	1 250 730 186	7 636 356 429
Changes in equity for 2021
Profit or loss
Profit for the period	-		-		-		-		-		-	828 960 869	828 960 869	140 664 599	969 625 468
Other comprehensive income, net tax
Fair value gain on financial assets at FVTOCI	-		-		-		-		-	(1 024 298)		-	(1 024 298)	-	(1 024 298 )
Balance at 30 June 2021	1 751 906	27 081 696	101 292 105	5 817 958	2 406 801 864	(2 817 529) 4 673 634 814	7 213 562 814	1 391 394 785	8 604 957 599

CONDENSED CONSOLIDATED INFLATION ADJUSTED INTERIM STATEMENT OF CASH FLOWS

For the half year ended 30 June 2022

	Inflation adjusted	Historical cost
	Reviewed	Reviewed	Unreviewed	Unreviewed
	30 Jun 2022	30 Jun 2021	30 Jun 2022	30 Jun 2021
	ZW$	ZW$	ZW$	ZW$
Cash generated from operating activities	16 865 899 481	1 143 100 810	32 034 497 014	1 471 052 910
Interest received	5 417 431 044	3 213 831 806	3 208 865 054	1 033 337 017
Dividends received from listed equities	151 332 686	137 227 063	101 885 318	44 867 550
Interest expense paid	(1 310 970 370)	(564 419 201)	(840 419 568)	(184 345 525)
Dividend received from associates	3 458 580	24 053 150	8 752 162	7 689 120
Income tax paid	(828 580 978)	(324 367 772)	(771 615 154)	(93 059 700)
Interest paid expense lease liability	(51 561 574)	-	(33 867 455)	-
Interest expense on offshore borrowings	(94 222 991)	-	(61 888 974)	-
Net cash generated from operating activities	20 152 785 878	3 629 425 856	33 646 208 397	2 279 541 372
Cash flows from investing activities
Purchase of intangible assets	(418 031 025)	-	(279 980 994)	-
Purchase of property and equipment	(784 155 250)	(145 081 368)	(541 896 707)	(47 035 767)

Interest income	12
Interest expense	13

Net interest income Loan impairment charges, net recoveries

Net income from lending activities

Gross insurance premium income Total insurance expenses

Net insurance income
Commissions and fees
Operating income
Fair value adjustments
Total income
Operating expenses	15
Profit from ordinary activities
Movement in life assurance funds
Share of associate companies
profit net of tax
Effects of inflation adjustments
Profit before taxation
Income tax expense	16

Net profit for the period

Profit attributable to:

Owners of parent from continuing operations

Non-controlling interests

Profit for the period

Other comprehensive income: Items that will not be reclassified to profit or loss

Gains on property and equipment revaluation

Fair value gains on financial assets at FVTOCI

Income tax relating to components of other comprehensive income

Other comprehensive income

for the period net of tax
Total comprehensive income
for the period
Total comprehensive income
attributable to:
Owners of parent from continuing
operations
Non-controlling interests
Total comprehensive income
for the period
Earnings per share
Basic and fully diluted / headline
earnings per share (ZW cents)	17

5 417 431 044	3 213 831 806	3 208 865 054	1 033 337 017
(1 310 970 370)	(564 419 201)	(840 419 568)	(184 345 525)
4 106 460 674	2 649 412 605	2 368 445 486	848 991 492
(2 289 940 123)	(746 962 222)	(1 761 022 549)	(248 526 662)
1 816 520 551	1 902 450 383	607 422 937	600 464 830
2 932 838 973	2 044 363 918	2 074 850 965	657 733 728
(1 917 165 205)	(1 346 274 840)	(1 466 627 967)	(434 342 587)
1 015 673 768	698 089 078	608 222 998	223 391 141
3 885 084 376	3 353 480 136	2 602 603 435	1 079 790 767
11 148 395 005	978 725 792	10 912 584 099	326 138 026
3 011 800 834	1 513 097 829	10 993 811 216	696 335 798
20 877 474 534	8 445 843 218	25 724 644 685	2 926 120 562
(9 412 510 340)	(5 970 435 835)	(6 374 190 645)	(1 866 586 034)
11 464 964 194	2 475 407 383	19 350 454 040	1 059 534 528
(62 618 457)	(658 600 083)	(3 823 162 823)	(572 156 719)
491 032 254	1 040 547 463	7 001 510 453	760 205 256
(3 897 309 773)	57 718 896	-	-
7 996 068 218	2 915 073 659	22 528 801 670	1 247 583 065
(1 926 720 832)	(627 682 437)	(2 159 270 462)	(277 957 597)
6 069 347 386	2 287 391 222	20 369 531 208	969 625 468
4 458 132 713	1 870 998 492	15 848 461 733	828 960 869
1 611 214 673	416 392 730	4 521 069 475	140 664 599
6 069 347 386	2 287 391 222	20 369 531 208	969 625 468
3 143 252 034	-	7 212 968 889	-
167 691 271	(3 967 151)	167 691 271	(1 360 652)
(70 985 987)	980 682	(409 249 684)	336 354
3 239 957 318	(2 986 469)	6 971 410 476	(1 024 298)
9 309 304 704	2 284 404 753	27 340 941 684	968 601 170
7 683 725 119	1 868 012 023	22 774 213 277	827 936 571
1 625 579 585	416 392 730	4 566 728 407	140 664 599
9 309 304 704	2 284 404 753	27 340 941 684	968 601 170
2 830	1 188	10 061	526

Proceeds on disposal of property and equipment	5 043 553	-	5 043 553	-
Purchase of investment securities	(2 367 838 824)	(1 226 667 913)	(1 060 875 001)	(429 231 305)
Proceeds on disposal of investment securities	822 280 096	1 052 042 234	720 406 630	354 242 655
Net cash used in investing activities	(2 742 701 450)	(319 707 047)	(1 157 302 519)	(122 024 417)
Cash flows from financing activities
Dividends paid	(596 849 407)	-	(230 414 377)	-
Lease capital payments	(74 381 838)	(146 494 488)	(48 856 607)	(24 572 429)
Proceeds from offshore borrowings	7 219 912 501	-	5 716 634 848	-
Repayment on offshore borrowings	(8 032 471 284)	-	(5 276 009 630)	-
Net cash used in financing activities	(1 483 790 028)	(146 494 488)	161 354 234	(24 572 429)
Net increase in cash and cash equivalents	15 926 294 400	3 163 224 321	32 650 260 112	2 132 944 526
Cash and cash equivalents at beginning of year	20 368 507 756	17 899 117 177	6 985 981 279	5 086 686 008
Effects of exchange rates fluctuating
on cash and cash equivalents	(7 340 734 816)	(693 833 742) (10 682 174 051)	(233 649 255)
Cash and cash equivalents at end of period	28 954 067 340	20 368 507 756	28 954 067 340	6 985 981 279
Cash and cash equivalents comprise:
Cash	8 167 000 039	7 485 076 722	8 167 000 039	2 567 228 119
Local bank accounts	13 021 293 527	6 636 892 120	13 021 293 527	2 276 318 160
Foreign bank accounts	7 765 773 774	6 246 538 914	7 765 773 774	2 142 435 000
	28 954 067 340	20 368 507 756	28 954 067 340	6 985 981 279

NOTES TO CONDENSED CONSOLIDATED INFLATION ADJUSTED INTERIM FINANCIAL RESULTS

For the half year ended 30 June 2022

1. BASIS OF PREPARATION

1. Reporting currency
   All Group entities have Zimbabwean dollar (ZW$) as their functional currency as at the reporting date. All information presented have been rounded off to the nearest dollar.
2. Statement of compliance
   The condensed consolidated financial results as at, and for the half year ended 30 June 2022, have been prepared under the supervision of E Mungoni CA(Z), Group Finance Director of ZB Financial Holdings Limited. The condensed consolidated inflation adjusted interim financial results are required to be prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" as well as the requirements of the Securities and Exchange (Zimbabwe Stock Exchange) (ZSE) Listing Rules, 2019 and in the manner required by the Companies and Other Business Entities Act (Chapter 24:31), the Banking Act (Chapter 24:20), the Building Societies Act (Chapter 24:02), Securities and Exchange Act (Chapter 24:25) and relevant regulations made thereunder. They do not include all the information required for a complete set of International Financial Reporting Standards ("IFRS") financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to the understanding of the changes in the Group's financial position and performance since the last Group annual financial statements. They should therefore be read in conjunction with the Group's annual financial results for the year ended 31 December 2021.
   The preparation of the condensed consolidated financial results, in conformity with IAS 29 "Financial Reporting in Hyperinflationary Economies" is required by International Financial Reporting Standards (IFRS). The condensed consolidated inflation adjusted financial results are to be the principal financial results of the Company and its subsidiaries. The condensed consolidated historical cost financial results have been provided as supplementary information and as a result the auditors have not expressed an opinion on them.
   The condensed consolidated financial results were authorised for issue by the board of directors on 30 August 2022.

ZBFH 257

2

NOTES TO CONDENSED CONSOLIDATED INFLATION ADJUSTED INTERIM FINANCIAL RESULTS (Continued)

1.3 Effects of inflation adjustments

The Public Accountants and Auditors Board (PAAB), through circular 01/19 indicating the conditions required for the application

of International Accounting Standard ("IAS") 29, Financial Reporting in Hyper-Inflationary Economies. All entities reporting in

Zimbabwe were now required to apply the requirements of IAS 29 with effect from 1 July 2019.

The restatement of figures has been calculated by means of conversion factors derived from the consumer price index (CPI)

NOTES TO CONDENSED CONSOLIDATED INFLATION ADJUSTED INTERIM FINANCIAL RESULTS (Continued)

		Reviewed Inflation adjusted
			Other
	Banking	Insurance	strategic
	operations	operations	investments1	Total
30 June 2021	ZW$	ZW$	ZW$	ZW$

prepared by the Zimbabwe Central Statistical Office. The conversion factors used to restate the consolidated financial statements

at 30 June 2022 are as follows:

		Conversion
	Index	factors
30-Jun-22	8707.35	1.0000
31-Dec-21	3977.46	2.1892
30-Jun-21	2986.44	2.9156

The main guidelines for the restatement are as follows:

• All amounts not already expressed in terms of the measuring unit current at the statement of financial position date are

restated by applying a general CPI.

• Corresponding figures for previous periods are similarly restated.

• Monetary assets and liabilities are not restated because they are already expressed in terms of the monetary unit current at

the statement of financial position date. Monetary items are money held, assets and liabilities to be recovered or paid at the

nominal value recorded at the original cost.

• Non-monetary assets carried at cost (excluding PPE and investment property) and liabilities and the components of

shareholding's equity are restated by applying the relevant conversion factors reflecting the increase in the CPI from the date

of change in functional currency from US$ to ZW$ in 2018.

External revenue

Net earnings / (losses) from lending activities Net fees and commission income

Other revenue / (expenses) Fair value adjustments Total segment revenue

Inter segmental revenue

Total segment operating expenses

Material non-cash items: Depreciation

Amortisation of intangible assets

Profit from associates net of tax Reportable segment profit before taxation

Income tax expense Reportable segment assets as at 31 December 2021

Reportable segment liabilities as at 31 December 2021

Investment in associates as at 31 December 2021

1 984 509 884	(19 945 211)	(62 114 290)	1 902 450 383
3 292 416 714	700 884 727	58 267 773	4 051 569 214
2 300 440 250	640 595 985	(1 962 310 443)	978 725 792
1 314 574 791	482 453 371	(283 930 333)	1 513 097 829
8 891 941 639	1 803 988 872	(2 250 087 293)	8 445 843 218
1 605 835 123	-	2 420 756 546	4 026 591 669
(5 400 791 509)	(705 614 819)	135 970 493	(5 970 435 835)
(497 205 930)	(14 984 258)	(27 303 788)	(539 493 976)
(58 456 368)	(252 263)	-	(58 708 631)
-	995 615 962	44 931 501	1 040 547 463
2 256 722 736	821 854 756	(163 503 833)	2 915 073 659
661 201 130	(52 802 942)	19 284 249	627 682 437
89 852 627 473	17 031 489 765	3 653 410 352	110 537 527 590
57 761 172 362	9 523 469 786	(808 735 762)	66 475 906 386
-	8 727 001 999	2 534 375 947	11 261 377 946

• All items in the consolidated statement of profit or loss and other comprehensive income are restated by applying the

respective monthly factors.

• The capitalisation of borrowing costs during construction of a qualifying asset is considered to be a partial recognition of

inflation and is reversed to the consolidated statement of profit or loss and other comprehensive income and replaced by

indexed cost.

• The effect of general inflation on the net monetary position is included in the consolidated statement of profit or loss and

other comprehensive income as effects of inflation adjustments.

• Share capital and share premium were restated from the date of change in functional currency from US$ to ZW$ in 2018.

1.4 Basis of reporting

The same accounting policies and methods of computation were applied to the financial results as at the reporting date of

ZB Bank Limited, ZB Building Society, ZB Life Assurance Limited and ZB Reinsurance Limited, incorporated in this reporting

package.

1.5 Basis of consolidation

Subsidiaries

A subsidiary is an entity controlled by another entity, that is the parent. The Group controls an entity when it is exposed

to, or has rights to variable returns from its involvement with the investee and has the ability to exert control over the

entity's financial and operational decisions through its power over the investee. The results of subsidiaries are included in the

consolidated financial statements from the date on which control commences until the date on which control ceases.

Subsidiaries are included in the separate financial statements of the Holding company at their net asset value which is

considered to be an estimate of fair value. Assets valuation was done for the half year period, and only immovable assets

were revalued.

Non-controlling interests (NCI)

Non-controlling interests are measured at their proportionate share of the fair values of the assets and liabilities recognised.

		Unreviewed Historical cost
			Other
	Banking	Insurance	strategic
	operations	operations	investments1	Total
30 June 2022	ZW$	ZW$	ZW$	ZW$
External revenue
Net earnings / (losses) from lending activities	656 320 718	(54 551 880 )	5 654 099	607 422 937
Net fees and commission income	2 553 736 250	610 644 001	46 446 182	3 210 826 433
Fair value adjustments	6 609 215 845	3 998 350 099	386 245 272	10 993 811 216
Other revenue / (expenses)	9 164 115 898	1 915 823 697	(167 355 496 )	10 912 584 099
Total segment revenue	18 983 388 711	6 470 265 917	270 990 057	25 724 644 685
Inter segmental revenue	649 137 364	-	30 344 255 969	30 993 393 333
Total segment operating expenses	(5 706 475 524)	(570 191 827 )	(97 523 294 )	(6 374 190 645)
Material non-cash items:
Depreciation	(738 254 007)	(14 610 309 )	(22 359 373 )	(775 223 689)
Amortisation of intangible assets	(319 496)	(678 671 )	(47 072 )	(1 045 239)
Profit from associates net of tax	-	5 133 739 138	1 867 771 315	7 001 510 453
Reportable segment profit before taxation	13 276 913 187	7 210 650 407	2 041 238 076	22 528 801 670
Income tax expense	1 147 959 495	1 198 873 594	(187 562 627 )	2 159 270 462
Reportable segment assets as at
30 June 2022	93 622 609 492	19 695 171 715	3 643 454 108	116 961 235 315
Reportable segment liabilities as at
30 June 2022	60 646 251 567	10 237 917 919	(521 671 318 )	70 362 498 168
Investment in associates as at 30 June 2022	-	9 117 152 752	2 697 988 324	11 815 141 076
		Unreviewed Historical cost
			Other
	Banking	Insurance	strategic
	operations	operations	investments1	Total
30 June 2021	ZW$	ZW$	ZW$	ZW$

Changes in the Group's interest in a subsidiary that do not result in a loss of control are accounted for as equity

transactions.

Where necessary, adjustments are made to the financial statements of subsidiaries and associates to bring the accounting

policies used into line with those used by the Group.

Transactions eliminated on consolidation

Intra-Group transactions, balances, and unrealised income and expenses are eliminated on consolidation.

1.6 Key sources of judgement and estimation uncertainty

Significant assumptions and estimations, as at the date of financial reporting, with material implications on the reported

financial outturn and balances have been made in the following areas:

• The computation of expected credit losses (IFRS 9)

• Determination of the fair value of financial assets (IFRS 13)

• Valuation of property (including investment properties) and equipment (IAS 16 and IAS 40)

• Estimation of liabilities under insurance contracts including life funds valuation (IFRS 4)

• Ascertaining of the degree of control or significant influence in investee companies (IAS 27 and IAS 28)

• Determination of carrying amounts of right of use assets and lease liabilities (IFRS 16)

The nature of assumptions made and processes involved in the development of estimates, and relevant models used, where applicable, are discussed in the accounting policy notes in the Group's annual report as at 31 December 2021.

The same above significant assumptions and estimates were applied to the extent where relevant, to the financial results as at the reporting date of ZB Bank Limited, ZB Building Society, ZB Life Assurance Limited and ZB Reinsurance Limited, incorporated in this reporting package.

2. SEGMENT INFORMATION
		Reviewed Inflation adjusted
			Other
	Banking	Insurance	strategic

External revenue

Net earnings / (losses) from lending activities Net fees and commission income

Fair value adjustments Other revenue / (expenses) Total segment revenue

Inter segmental revenue

Total segment operating expenses

Material non-cash items:

Depreciation

Amortisation of intangible assets

Profit from associates net of tax Reportable segment profit before taxation

Income tax expense Reportable segment assets as at 31 December 2021

Reportable segment liabilities as at 31 December 2021

Investment in associates as at 31 December 2021

1 Includes consolidation journals.

3. TREASURY BILLS

627 069 754	(6 937 886)	(19 667 038)	600 464 830
1 060 279 809	224 298 728	18 603 371	1 303 181 908
877 495 243	325 028 916	(506 188 361)	696 335 798
548 852 627	274 617 968	(497 332 569)	326 138 026
3 113 697 433	817 007 726	(1 004 584 597)	2 926 120 562
549 257 115	-	1 246 447 037	1 795 704 152
(1 688 688 985)	(227 383 393)	49 486 344	(1 866 586 034)
(159 102 755)	(4 603 738)	(8 408 481)	(172 114 974)
(587 584)	(131 157)	-	(718 741)
-	618 313 225	141 892 031	760 205 256
876 155 821	361 162 870	10 264 374	1 247 583 065
205 667 202	68 033 044	4 257 351	277 957 597
40 852 684 721	7 744 141 520	1 253 007 709	49 849 833 950
26 366 935 666	4 360 017 025	(365 328 581)	30 361 624 110
-	3 986 435 528	829 841 325	4 816 276 853

Inflation adjusted	Historical cost
Reviewed	Audited	Unreviewed	Unaudited
30 Jun 2022	31 Dec 2021	30 Jun 2022	31 Dec 2021
ZW$	ZW$	ZW$	ZW$

	operations	operations	investments1	Total
30 June 2022	ZW$	ZW$	ZW$	ZW$
External revenue
Net earnings / (losses) from lending activities	1 859 765 380	(59 247 200 )	16 002 371	1 816 520 551
Net fees and commission income	3 813 121 835	1 019 429 026	68 207 283	4 900 758 144
Other revenue / (expenses)	9 457 172 341	2 486 555 021	(795 332 357 )	11 148 395 005
Fair value adjustments	37 836 735	1 126 139 028	1 847 825 071	3 011 800 834
Total segment revenue	15 167 896 291	4 572 875 875	1 136 702 368	20 877 474 534
Inter segmental revenue	857 574 328	-	12 289 812 347	13 147 386 675
Total segment operating expenses	(8 822 246 272)	(1 038 721 303 )	448 457 235	(9 412 510 340)
Material non-cash items:
Depreciation	(1 124 227 236)	(28 841 563 )	(8 973 838 )	(1 162 042 637)
Amortisation of intangible assets	(87 694 956)	(12 347 300 )	(78 150 )	(100 120 406)
Profit from associates net of tax	-	428 094 847	62 937 407	491 032 254
Reportable segment profit
before taxation	5 174 994 234	2 874 213 523	(53 139 539 )	7 996 068 218
Income tax expense	1 498 808 187	599 669 416	(171 756 771 )	1 926 720 832
Reportable segment assets
as at 30 June 2022	100 698 077 030	19 932 503 520	4 180 762 732	124 811 343 282
Reportable segment liabilities
as at 30 June 2022	62 416 016 147	10 139 072 264	(519 904 694 )	72 035 183 717
Investment in associates as at 30 June 2022	-	9 155 096 845	2 593 854 777	11 748 951 622

Treasury bills include:
Assets classified as at fair value through
profit or loss' (FVTPL):
Short term treasury bills 1	6 127 728 321	4 556 347 268	6 127 728 321	2 081 308 636
Assets classified as 'at fair value through
other comprehensive income (FVTOCI):
Medium term treasury bills
acquired from the market 2	1 170 406 146	624 010 232	1 170 406 146	285 043 656
Assets classified as 'amortised cost' (AMCO):
Treasury bills issued as substitution
for debt instruments 3	20 724 067	55 465 337	20 724 067	25 336 191
Capitalisation treasury bills 4	19 108 500	40 811 547	19 108 500	18 642 439
	7 337 967 034	5 276 634 384	7 337 967 034	2 410 330 922
Maturity within 1 year	7 287 975 238	5 167 193 633	7 287 975 238	2 360 339 126
Maturity after 1 year	49 991 796	109 440 751	49 991 796	49 991 796
	7 337 967 034	5 276 634 384	7 337 967 034	2 410 330 922

1. The Group invested in treasury bills issued by the RBZ over a period ranging from 3 days to 12 months which were at rates ranging from 5% to 21% (December 2021: 21%).
2. The Group purchased treasury bills from the secondary market. These treasury bills have coupon rate of 15% (December 2021: 5% to 15%) with a maturity period of 730 days.
3. The Group received treasury bills as substitution for debt instruments from the Zimbabwe Asset Management Company (ZAMCO). The treasury bills have a coupon rate of 5% (December 2021: 5%) and maturity periods ranging from 3.5 months to 10 years (December 2021: 2 to 13 years).
4. Capitalisation Treasury Bills (CTBs) with a face value of $20 000 000 were acquired on 26/05/2015 from the Government of Zimbabwe by the holding company, ZB Financial Holdings Limited (ZBFH). The CTBs mature on 26/05/2025 and carry a coupon of 1% which is payable on maturity.

ZBFH 257

3

NOTES TO CONDENSED CONSOLIDATED INFLATION ADJUSTED INTERIM FINANCIAL RESULTS (Continued)

1. TREASURY BILLS (continued)
   Determination of fair value of treasury bills
   The fair value of treasury bills was determined using level 2 inputs due to lack of active market for treasury bills which are classified as "FVTPL". The Group used the discounted cash flow valuation technique by applying a risk discounted rate for comparable risk profiles on the contractual cash flows in order to determine the present value of the treasury bills.
   Treasury bills purchased from the secondary market are classified at FVOCI and were fair valued using level 2 inputs. The Group used the discounted cash flow valuation technique by applying discounting rates ranging form 65% to 75% to contractual cash flows in order to determine the present value of the treasury bills. The discounting rates were determined by using the yield curve comparable instruments in the Zimbabwe market.
   USD denominated Treasury bills fair value was computed using a proxy discount rate of 2% by reference to US Federal Reserve TBs with same tenor and adjusted for country risk.
   Valuation of treasury bills designated as at amortised cost
   The treasury bills carried at amortised cost, level 3, which cost having been established at fair value at initial recognition using a Discounted Cash Flow valuation technique in which an assessed discount rate of 5% was applied as a proxy for trade on similar instruments.
   Impairment assessment of treasury bills
   Treasury bills were assessed for ECL in the current year in line with IFRS 9. Treasury bills, being local sovereign exposures have been assessed as "low risk" instruments and there were no defaults recorded in past on all Government Instruments. The amount of ECL was insignificant as such no adjustment for impairment was recognized.
2. MORTGAGES AND OTHER ADVANCES

	Inflation adjusted	Historical cost
	Reviewed	Audited	Unreviewed	Unaudited
	30 Jun 202	31 Dec 2021	30 Jun 2022	31 Dec 2021
	ZW$	ZW$	ZW$	ZW$

NOTES TO CONDENSED CONSOLIDATED INFLATION ADJUSTED INTERIM FINANCIAL RESULTS (Continued)

		Inflation adjusted	Historical cost
		Reviewed	Audited	Unreviewed	Unaudited
		30 Jun 2022	31 Dec 2021	30 Jun 2022	31 Dec 2021
		ZW$	ZW$	ZW$	ZW$
5.2	Reconciliation of carrying
	amount
	Balance at beginning of year	9 739 525 678	7 663 975 854	4 448 949 501	2 177 997 851
	Additions	-	239 044 060	-	87 984 925
	Transfer from owner occupied	-	164 040 210	-	46 618 000
	Fair value adjustment	3 492 426 323	1 672 465 554	8 783 002 500	2 136 348 725
	Balance at end of period	13 231 952 001	9 739 525 678	13 231 952 001	4 448 949 501
6.	RIGHT OF USE ASSETS
	Balance at the beginning of year	484 583 306	233 065 526	102 568 596	66 234 057
	Depreciation	(93 504 264)	(161 126 259)	(61 416 889)	(57 037 263)
	Lease modifications	410 406 977	263 768 776	269 569 736	93 371 802
	Effects of inflation adjustment	19 884 428	148 875 263	-	-
	Balance at end of period	821 370 447	484 583 306	310 721 443	102 568 596

7. PROPERTY AND EQUIPMENT

Reviewed Inflation adjusted
Equipment	Marine assets

1. Gross loan book
   Mortgage advances
   Other advances:
   Loans, overdraft and other accounts Finance leases
   Bills discounted Insurance advances Total other advances
   Gross advances
   Off balance sheet exposuresIn respect of Guarantees In respect of Letter of credit
   In respect of Loan commitments Gross credit exposure
   Gross advances
   Less: Allowance for loan impairments Net advances
2. Maturity analysis
   On demand Within 1 month Between 1 and 6 months Between 6 and 12 months After 12 months
3. Non-performingloans
   Included in the above are the following;
   Included in the above are the following; Non-performing loans
   Less: Allowance for loan impairments Value to be received from security held

736 389 805	712 189 612	736 389 805	325 323 401
17 791 954 795	23 290 700 370	17 791 954 795	10 639 034 509
1 742 227 468	2 959 095 620	1 742 227 468	1 351 694 879
347 560 081	887 911 999	347 560 081	405 592 200
1 146 766 717	484 474 204	1 146 766 717	221 304 542
21 028 509 061	27 622 182 193	21 028 509 061	12 617 626 130
21 764 898 866	28 334 371 805	21 764 898 866	12 942 949 531
1 863 544 018	1 814 872 363	1 863 544 018	829 021 429
1 975 898 094	-	1 975 898 094	-
6 593 002 500	1 595 207 944	6 593 002 500	728 680 207
32 197 343 478	31 744 452 112	32 197 343 478	14 500 651 167
21 764 898 866	28 334 371 805	21 764 898 866	12 942 949 531
(1 002 806 269)	(1 554 384 025)	(1 002 806 269)	(710 032 117)
20 762 092 597	26 779 987 780	20 762 092 597	12 232 917 414
1 635 980 437	2 166 823 558	1 635 980 437	989 790 356
674 939 376	1 299 730 177	674 939 376	593 707 960
5 305 317 462	3 005 146 032	5 305 317 462	1 372 730 396
11 715 445 603	5 612 439 468	11 715 445 603	2 563 724 415
12 865 660 600	19 660 312 877	12 865 660 600	8 980 698 040
32 197 343 478	31 744 452 112	32 197 343 478	14 500 651 167

119 081 081	1 093 221 014	119 081 081	499 375 970
(26 859 481)	(1 023 233 986)	(26 859 481)	(467 406 369)
92 221 600	69 987 028	92 221 600	31 969 601

	Freehold	Leasehold	furniture	Computer	and motor Capital work
	properties	improvements	& fittings	equipment	vehicles	in progress	Total
30 June 2022	ZW$	ZW$	ZW$	ZW$	ZW$	ZW$	ZW$
GROUP
Cost or valuation
Balance at 1 January 2022	8 926 310 668	4 173 822 997	7 538 652 183	9 302 794 376	2 094 364 908	138 129 934	32 174 075 066
Additions	-	1 581 477	147 924 919	199 844 939	159 476 936	275 326 979	784 155 250
Disposals	-	-	-	(1 833 523)	(8 672 631)	-	(10 506 154)
Surplus on revaluation	3 114 058 983	-	62 746	-	29 130 305	- 3 143 252 034
Balance at 30 June 2022	12 040 369 651	4 175 404 474	7 686 639 848	9 500 805 792	2 274 299 518	413 456 913	36 090 976 196
Accumulated depreciation and
impairment
Balance at 1 January 2022	1 414 883 783	3 920 360 393	2 229 400 940	2 672 824 058	1 290 258 503	118 430 301	11 646 157 978
Recognised in statement of profit
or loss	215 980 798	11 815 594	161 452 861	701 497 007	71 296 377	- 1 162 042 637
Disposals	-	-	-	(96 609)	(3 166 364)	-	(3 262 973)
Balance at 30 June 2022	1 630 864 581	3 932 175 987	2 390 853 801	3 374 224 456	1 358 388 516	118 430 301	12 804 937 642
Carrying value at 30 June 2022	10 409 505 070	243 228 487	5 295 786 047	6 126 581 336	915 911 002	295 026 612	23 286 038 554
Carrying value at 31 December 2021	7 511 426 885	253 462 604	5 309 251 243	6 629 970 318	804 106 405	19 699 633	20 527 917 088
			Audited Inflation adjusted
			Equipment		Marine assets
	Freehold	Leasehold	furniture	Computer	and motor Capital work
	properties	improvements	& fittings	equipment	vehicles	in progress	Total
31 December 2021	ZW$	ZW$	ZW$	ZW$	ZW$	ZW$	ZW$
GROUP
Cost or valuation
Balance at 1 January 2021	6 761 985 742	1 573 480 399	2 120 831 586	4 553 826 335	1 855 617 373	316 437 950	17 182 179 385
Additions	-	23 768 397	103 396 202	153 713 249	87 566 970	50 775 149	419 219 967
Disposals	-	-	(6 763 616)	(4 560 858)	(24 607 695)	-	(35 932 169)
Transfer between categories	-	148 626 374	51 669 589	236 318 987	-	(436 614 950)	-
Reclassication to investment properties	(202 215 939)	-	-	-	-	-	(202 215 939)
Surplus on revaluation	2 366 540 865	2 427 947 827	5 269 518 422	4 363 496 663	175 788 260	- 14 603 292 037
Reclassification to intangibles	-	-	-	-	-	207 531 785	207 531 785

For the secured non-performing loans, security exists in the form of liens registered over funded accounts, bonds registered over landed property and guarantees in various forms. The Group discounts the value of the security at hand using internal thresholds for prudential purposes. Generally, no security value is placed on ordinary guarantees.

		Inflation adjusted				Historical cost
	Reviewed		Audited			Unreviewed		Unaudited
	30 Jun 2022	As a % of	31 Dec 2021	As a % of	30 Jun 2022	As a % of	31 Dec 2021	As a % of
	ZW$	Total	ZW$	Total	ZW$	Total	ZW$	Total
4.4 Sectorial analysis
Gross advances:
Private	7 747 245 203	24%	13 858 672 928	44%		7 747 245 203	24%	6 330 548 124	44%
Agriculture	1 225 114 772	4%	2 591 100 273	8%		1 225 114 772	4%	1 183 597 092	8%
Mining	748 541 583	2%	1 048 134 526	3%		748 541 583	2%	478 780 767	3%
Manufacturing	763 592 240	2%	495 655 239	2%		763 592 240	2%	226 411 963	2%
Distribution	1 522 690 640	5%	1 565 788 534	5%		1 522 690 640	5%	715 241 619	5%
Construction	115 571 028	0%	53 736 993	0%		115 571 028	0%	24 546 695	0%
Transport	990 745 450	3%	991 671 251	3%		990 745 450	3%	452 988 725	3%
Services	6 531 890 945	20%	6 199 429 524	20%		6 531 890 945	20%	2 831 857 506	20%
Financial	2 079 114 628	6%	1 420 219 263	4%		2 079 114 628	6%	648 746 560	4%
Communication	40 392 377	0%	109 963 274	0%		40 392 377	0%	50 230 480	0%
Total gross advances	21 764 898 866	66%	28 334 371 805	89%		21 764 898 866	66%	12 942 949 531	89%
Guarantees:
Manufacturing	1 829 658 831	6%	1 721 531 580	6%		1 829 658 831	6%	786 383 990	6%
Distribution	7 652 701	0%	72 663 260	0%		7 652 701	0%	33 192 086	0%
Construction	1 590 200	0%	2 057 824	0%		1 590 200	0%	940 000	0%
Services	-	0%	-	0%		-	0%	8 505 353	0%
Communication	24 642 286	0%	18 619 699	0%		24 642 286	0%	-	0%
Financial Services	-	0%	-	0%		-	0%	-	0%
Total guarantees	1 863 544 018	6%	1 814 872 363	6%		1 863 544 018	6%	829 021 429	6%
Loan commitments:
Private	298 913 475	2%	646 380 536	2%		298 913 475	2%	295 262 260	2%
Agriculture	31 360 040	0%	3 163 050	0%		31 360 040	0%	1 444 860	0%
Mining	280 313 522	1%	190 359 557	1%		280 313 522	1%	86 954 959	1%
Manufacturing	1 560 984 937	5%	249 440 015	1%		1 560 984 937	5%	113 942 513	1%
Distribution	24 558 300	0%	11 687 172	0%		24 558 300	0%	5 338 621	0%
Construction	1 554 610 621	5%	120 761 137	0%		1 554 610 621	5%	55 162 871	0%
Transport	30 804 477	0%	-	0%		30 804 477	0%	-	0%
Communication	2 795 627 033	9%	299 005 061	1%		2 795 627 033	9%	-	1%
Services	15 830 095	0%	74 411 416	0%		15 830 095	0%	136 583 491	0%
Financial Services	-	0%	-	0%		-	0%	33 990 632	0%
Total loan commitments	6 593 002 500	22%	1 595 207 944	5%		6 593 002 500	22%	728 680 207	5%
Letters of credit:
Manufacturing	1 660 174 474	5%	-	0%		1 660 174 474	5%	-	0%
Transport	315 723 620	1%	-	0%		315 723 620	1%	-	0%
Total letters of credit	1 975 898 094	6%	-	0%		1 975 898 094	6%	-	0%
Total credit exposure	32 197 343 478	100%	31 744 452 112	100%		32 197 343 478	100%	14 500 651 167	100%

4.5 Mortgage advances

Mortgage advances were spread as follows:

	Type of property: -
	High density	26 870 253	4%	34 055 489	5%	26 870 253	4%	15 556 317	5%
	Medium density	46 414 919	6%	16 619 694	2%	46 414 919	6%	7 591 764	2%
	Low density	605 532 217	82%	649 357 664	91%	605 532 217	82%	296 622 192	91%
	Commercial	57 572 416	8%	12 156 765	2%	57 572 416	8%	5 553 128	2%
			736 389 805	100%	712 189 612	100%	736 389 805	100%	325 323 401	100%
4.6	Finance lease receivables
	Loans and advances to customers include the following finance lease receivables for leases of certain equipment where the
	Group is the lessor:
					Inflation adjusted		Historical cost
					Reviewed		Audited	Unreviewed		Unaudited
					30 Jun 2022	31 Dec 2021	30 Jun 2022	31 Dec 2021
					ZW$		ZW$		ZW$		ZW$
	Gross investment in finance leases:
	Maturing within 1 year			444 994 970	3 339 655 397		444 994 970	1 525 532 013
	Maturing after 1 year			4 322 119 136	4 490 995 893		4 322 119 136	2 051 456 570
	Gross investment in finance leases		4 767 114 106	7 830 651 290		4 767 114 106	3 576 988 583
	Unearned finance charges		(3 024 886 639)	(4 871 555 672)		(3 024 886 639)	(2 225 293 704)
	Net investment in finance leases		1 742 227 467	2 959 095 618		1 742 227 467	1 351 694 879
	Maturing within 1 year			185 102 825	1 359 428 470		185 102 825	620 977 737
	Maturing after 1 year			1 557 124 642	1 599 667 148		1 557 124 642	730 717 142
					1 742 227 467	2 959 095 618		1 742 227 467	1 351 694 879
5.	INVESTMENT PROPERTIES
5.1	Made up as follows:
	Land stock held for capital appreciation
	and completed properties available for lease:
	Residential			1 066 431 030	784 958 441		1 066 431 030	358 563 710
	Commercial			11 834 257 116	8 710 736 786		11 834 257 116	3 979 005 689
	Industrial			331 263 855	243 830 451		331 263 855	111 380 102
					13 231 952 001	9 739 525 678		13 231 952 001	4 448 949 501

Balance at 31 December 2021		8 926 310 668	4 173 822 997	7 538 652 183	9 302 794 376	2 094 364 908	138 129 934	32 174 075 066
Accumulated depreciation and
impairment
Balance at 1 January 2021	1 209 614 378	1 319 870 479	922 473 934	2 042 002 458	1 184 539 488	118 430 301	6 796 931 038
Recognised in statement of profit
or loss	243 445 130	2 597 947 435	1 306 198 858	631 698 804	108 225 306	-	4 887 515 533
Disposals	-	-	(558 001)	(877 204)	(3 580 068)	-	(5 015 273)
Impairment	-	2 542 479	1 286 149	-	1 073 777	-	4 902 405
Reclassication to investment properties		(38 175 725)	-	-	-	-	-	(38 175 725)
Balance at 31 December 2021		1 414 883 783	3 920 360 393	2 229 400 940	2 672 824 058	1 290 258 503	118 430 301	11 646 157 978
Carrying value at 31 December 2021		7 511 426 885	253 462 604	5 309 251 243	6 629 970 318	804 106 405	19 699 633	20 527 917 088
Carrying value at 31 December 2020	5 552 371 364	253 609 919	1 198 357 652	2 511 823 878	671 077 885	198 007 650	10 385 248 348
					Unreviewed Historical cost
					Equipment		Marine assets
			Freehold	Leasehold	furniture	Computer	and motor Capital work
			properties	improvements	& fittings	equipment	vehicles	in progress	Total
30 June 2022	ZW$	ZW$	ZW$	ZW$	ZW$	ZW$	ZW$
GROUP
Cost or valuation
Balance at 1 January 2022	3 556 664 010	106 852 612	2 459 475 337	3 300 451 063	434 803 245	64 656 690	9 922 902 957
Additions	-	814 237	100 805 193	112 027 061	95 776 604	232 473 612	541 896 707
Disposals	-	-	-	(1 063 429)	(5 485 155)	-	(6 548 584)
Transfer between categories	-	-	-	-	-	-	-
Reclassication to investment properties	-	-	-	-	-	-	-
Surplus on revaluation	7 120 199 783	-	64 350	-	92 704 754	-	7 212 968 887
Reclassification to intangibles		-	-	-	-	-	-	-
Balance at 30 June 2022		10 676 863 793	107 666 849	2 560 344 880	3 411 414 695	617 799 448	297 130 302	17 671 219 967
Accumulated depreciation and
impairment				-
Balance at 1 January 2022	125 495 011	31 041 822	49 443 750	275 178 119	68 226 170	-	549 384 872
Recognised in statement of profit
or loss	141 863 784	7 763 551	113 111 198	468 861 662	43 623 494	-	775 223 689
Disposals	-	-	-	(58 697)	(2 002 623)	-	(2 061 320)
Impairment	-	-	-	-	-	-	-
Reclassication to investment properties		-	-	-	-	-	-	-
Balance at 30 June 2022		267 358 795	38 805 373	162 554 948	743 981 084	109 847 041	-	1 322 547 241
Carrying value at 30 June 2022		10 409 504 998	68 861 476	2 397 789 932	2 667 433 611	507 952 407	297 130 302	16 348 672 726
Carrying value at 31 December 2021	3 431 168 999	75 810 790	2 410 031 587	3 025 272 944	366 577 075	64 656 690	9 373 518 085
					Unaudited Historical cost
					Equipment		Marine assets
			Freehold	Leasehold	furniture	Computer	and motor Capital work
			properties	improvements	& fittings	equipment	vehicles	in progress	Total
31 December 2021	ZW$	ZW$	ZW$	ZW$	ZW$	ZW$	ZW$
GROUP
Cost or valuation
Balance at 1 January 2021	1 616 342 287	49 233 601	339 555 297	759 481 003	217 720 202	115 424 734	3 097 757 124
Additions	-	8 672 256	38 526 759	55 759 333	40 000 000	17 045 321	160 003 669
Disposals	-	-	(3 089 574)	(2 069 061)	(11 240 628)	-	(16 399 263)
Transfer between categories	-	48 946 755	16 959 710	15 416 960	-	(81 323 425)	-
Reclassication to investment properties	(47 213 282)	-	-	-	-	-	(47 213 282)
Surplus on revaluation	1 987 535 005	- 2 067 523 145	2 471 862 828	188 323 671	-	6 715 244 649
Reclassification to intangibles		-	-	-	-	-	13 510 060	13 510 060
Balance at 31 December 2021		3 556 664 010	106 852 612	2 459 475 337	3 300 451 063	434 803 245	64 656 690	9 922 902 957
Accumulated depreciation and
impairment				-
Balance at 1 January 2021	38 433 774	17 065 579	15 029 460	48 872 747	27 009 029	-	146 410 589
Recognised in statement of profit
or loss	87 656 518	13 936 635	34 669 181	226 698 456	42 852 489	-	405 813 279
Disposals	-	-	(254 891)	(393 084)	(1 635 348)	-	(2 283 323)
Impairment	-	39 608	-	-	-	-	39 608
Reclassication to investment properties		(595 281)	-	-	-	-	-	(595 281)
Balance at 31 December 2021	125 495 011	31 041 822	49 443 750	275 178 119	68 226 170	-	549 384 872
					-
Carrying value at 31 December 2021		3 431 168 999	75 810 790	2 410 031 587	3 025 272 944	366 577 075	64 656 690	9 373 518 085
Carrying value at 31 December 2020		1 577 908 513	32 168 022	324 525 837	710 608 256	190 711 173	115 424 734	2 951 346 535

ZBFH 257

4

NOTES TO CONDENSED CONSOLIDATED INFLATION ADJUSTED INTERIM FINANCIAL RESULTS (Continued)

8. INTANGIBLE ASSETS
	Inflation adjusted	Historical cost
	Reviewed	Audited	Unreviewed	Unaudited
	30 Jun 2022	31 Dec 2021	30 Jun 2022	31 Dec 2021
	ZW$	ZW$	ZW$	ZW$
Computer software
Carrying amount at beginning of year	443 207 530	760 766 686	22 206 622	28 389 024
Additions at cost	418 031 025	24 018 392	279 980 994	10 358 475
Reversal of cancelled projects	-	(22 657 054)	-	(1 385 883)
Amortisation	(100 120 406)	(111 388 710)	(1 045 239)	(1 644 934)
Reclassification to equipment	-	(207 531 784)	-	(13 510 060)
Impairment	(995 577)	-	-	-
Balance at end of period	760 122 572	443 207 530	301 142 377	22 206 622

NOTES TO CONDENSED CONSOLIDATED INFLATION ADJUSTED INTERIM FINANCIAL RESULTS (Continued)

	Inflation adjusted	Historical cost
	Reviewed	Reviewed	Unreviewed	Unreviewed
	30 Jun 2022	30 Jun 2021	30 Jun 2022	30 Jun 2021
	ZW$	ZW$	ZW$	ZW$
14. LOAN IMPAIRMENTS
Loans and advances	(1 935 300 328)	(705 300 234)	(1 635 233 649)	(234 276 129)
Insurance debtors	(258 550 590)	(22 203 931)	(46 812 551)	(7 615 494)
Total loans and other advances	(2 193 850 918)	(727 504 165)	(1 682 046 200)	(241 891 623)
Other financial assets	(39 501 383)	(18 183 377)	(35 418 790)	(6 236 526)
Guarantees	(32 607 212)	(1 681 013)	(75 922 356)	(360 510)
Loan commitments	(34 974 098)	(4 979 355)	(34 455 077)	(1 556 855)
Net recoveries against loans
previously written off	10 993 488	5 385 688	66 819 874	1 518 852
	(2 289 940 123)	(746 962 222)	(1 761 022 549)	(248 526 662)

9. DEPOSITS AND OTHER ACCOUNTS

1. Summary of deposits by type
   Balances of banks Current accounts Savings and call accounts Fixed deposits
2. Maturity analysis
   On demand Within 1 month Between 1 and 6 months Between 6 and 12 months After 12 months

1 429 366 908	1 072 061 195	1 429 366 908	489 710 308
9 162 009 252	11 518 275 381	9 162 009 252	5 261 470 343
28 067 444 002	24 791 071 782	28 067 444 002	11 324 394 028
4 447 289 510	5 678 968 326	4 447 289 510	2 594 114 348
43 106 109 672	43 060 376 684	43 106 109 672	19 669 689 027
20 272 137 996	30 164 786 208	20 272 137 996	13 779 070 458
21 663 439 685	11 843 229 025	21 663 439 685	5 409 906 971
1 061 985 168	351 087 158	1 061 985 168	160 374 241
49 981 752	649 965 383	49 981 752	296 899 794
58 565 071	51 308 910	58 565 071	23 437 563
43 106 109 672	43 060 376 684	43 106 109 672	19 669 689 027

15. OPERATING EXPENSES
Commission and fees	150 273 829	117 300 323	101 121 556	37 838 709
Staff expenses	4 865 847 158	2 204 564 886	3 379 009 291	709 953 080
Communication expenses	154 535 460	167 731 650	102 387 299	53 859 830
National Social Security Authority expenses	57 549 901	18 472 607	40 768 736	6 049 228
Pension fund expenses	156 323 866	81 418 374	103 600 083	26 221 894
Computers and information
technology expenses	793 712 552	846 072 841	375 449 921	223 211 523
Occupation expenses	273 541 397	271 391 456	48 273 155	81 700 948
Transport expenses	111 371 282	53 019 549	68 749 422	16 750 154
Travelling expenses	136 949 306	74 174 234	98 933 745	24 483 812
Depreciation of property and equipment	1 162 042 637	539 493 976	775 223 689	172 114 974
Amortisation of intangible assets	100 120 406	58 708 631	1 045 239	718 741
Depreciation of right of use asset	93 504 264	64 053 513	61 416 889	10 744 093
Finance cost on lease liabilities	163 588 155	94 258 202	33 867 455	15 810 513
Impairment of intangible assets	995 577	-	-	-
Administration expenses	834 467 584	1 207 342 347	952 067 313	430 452 097
Directors fees	102 517 334	74 847 621	74 391 537	24 235 532

		Inflation adjusted				Historical cost
	Reviewed		Audited			Unreviewed		Unaudited
	30 Jun 2022	%	31 Dec 2021	%		30 Jun 2022	%	31 Dec 2021	%
	ZW$	Contribution	ZW$ Contribution		ZW$ Contribution	ZW$ Contribution
9.3 Deposit concentration
Private individuals	7 760 988 940	18%	6 909 088 682	16%		7 760 988 940	18%	3 156 025 012	16%
Agriculture	1 096 952 793	3%	2 266 503 636	5%		1 096 952 793	3%	1 035 323 542	5%
Mining	2 582 398 303	6%	433 971 800	1%		2 582 398 303	6%	198 235 385	1%
Manufacturing	2 374 760 230	6%	1 871 047 477	4%		2 374 760 230	6%	854 681 841	4%
Distribution	1 129 004 639	3%	1 227 495 347	3%		1 129 004 639	3%	560 711 578	3%
Construction	899 573 769	2%	542 785 814	1%		899 573 769	2%	247 940 891	1%
Transport	229 180 049	1%	659 210 851	2%		229 180 049	1%	301 123 061	2%
Services	18 183 188 502	42%	18 426 135 409	43%		18 183 188 502	42%	8 416 934 114	43%
Financial	5 266 806 362	12%	5 345 253 746	12%		5 266 806 362	12%	2 441 675 783	12%
Communication	3 583 256 086	7%	5 378 883 922	13%		3 583 256 086	7%	2 457 037 820	13%
	43 106 109 673	100%	43 060 376 684	100%		43 106 109 673	100%	19 669 689 027	100%

	Inflation adjusted	Historical cost
	Reviewed	Audited	Unreviewed	Unaudited
	30 Jun 2022	31 Dec 2021	30 Jun 2022	31 Dec 2021
	ZW$	ZW$	ZW$	ZW$
9.4 Secured and unsecured deposits analysis
Secured deposits	-	-	-	-
Unsecured deposits	43 106 109 673	43 060 376 684	43 106 109 673	19 669 689 027
	43 106 109 673	43 060 376 684	43 106 109 673	19 669 689 027
10. LEASE LIABILITIES
Balance at the beginning of year	262 016 880	244 830 676	119 687 540	69 577 553
Add finance cost posted to profit or loss	163 588 155	150 871 930	33 867 455	19 538 243
Exchange gains	(628 524 095)	(96 709 279)	185 552 788	31 108 045
Less lease liability payments during the period	(125 943 412)	(196 727 642)	(82 724 062)	(69 639 836)
Lease modifications	255 527 454	180 860 560	30 752 466	118 519 771
Effects of inflation adjustment	360 471 205	(21 109 365)	-	(49 416 236)
Balance at end of period	287 136 187	262 016 880	287 136 187	119 687 540
Maturing within 1 year	57 427 237	52 403 376	57 427 237	23 937 508
Maturing after 1 year	229 708 950	209 613 504	229 708 950	95 750 032
Total	287 136 187	262 016 880	287 136 187	119 687 540
11. LONG TERM BORROWINGS
Comprising of:
Face value of loan	20 000 000	43 783 485	20 000 000	20 000 000
Valuation discount	(2 403 638)	(6 682 080)	(2 403 638)	(3 052 329)
Balance at end of period	17 596 362	37 101 405	17 596 362	16 947 671
Valuation discount:
Balance at beginning of the year	6 682 080	13 580 385	3 052 329	3 859 361
Amortisation during the period	(987 601)	(2 279 808)	(648 691)	(807 032)
Effects of inflation adjustment	(3 290 841)	(4 618 497)	-	-
Balance at end of period	2 403 638	6 682 080	2 403 638	3 052 329
	Inflation adjusted	Historical cost
	Reviewed	Reviewed	Unreviewed	Unreviewed
	30 Jun 2022	30 Jun 2021	30 Jun 2022	30 Jun 2021
	ZW$	ZW$	ZW$	ZW$
12. INTEREST INCOME
Interest income comprises interest on:
Advances	4 293 241 266	2 481 782 497	2 452 997 159	796 375 696
Mortgages	175 166 694	85 334 156	104 733 624	26 273 673
Overdraft accounts	398 291 993	340 929 031	271 221 731	110 338 426
Financial assets at amortised cost	48 569 149	43 545 298	46 395 416	14 078 400
Treasury bill at FVTPL	336 167 119	144 142 648	220 780 360	47 058 123
Treasury bills at FVTOCI	35 586 511	26 574 602	23 374 472	8 122 641
Cash and short-term funds	55 839 033	10 263 534	37 557 385	4 318 346
Loans to other banks	64 202 015	147 469	45 741 096	45 052
Other	10 367 264	81 112 571	6 063 811	26 726 660
Total interest income	5 417 431 044	3 213 831 806	3 208 865 054	1 033 337 017
13. INTEREST EXPENSE
Interest expenses comprise interest on:
Retail deposits	62 515 326	46 248 217	41 009 040	14 916 925
Fixed deposits	861 475 515	344 021 793	546 457 863	111 281 568
Other interest payable categories	386 979 529	174 149 191	252 952 665	58 147 032
Total interest expenses	1 310 970 370	564 419 201	840 419 568	184 345 525
Net interest income	4 106 460 674	2 649 412 605	2 368 445 486	848 991 492

Audit fees	255 169 632	97 585 625	157 885 315	32 440 906
	9 412 510 340	5 970 435 835	6 374 190 645	1 866 586 034
16. INCOME TAX EXPENSE
Current income tax	1 437 073 901	1 015 193 294	1 429 640 624	349 194 025
Deferred tax expense	489 646 931	(387 510 857)	729 629 838	(71 236 428)
	1 926 720 832	627 682 437	2 159 270 462	277 957 597

1. EARNINGS PER SHARE
   Basic / headline earnings per share (ZW cents)
   The inflation adjusted calculation of basic/headline earnings per share for the period ended 30 June 2022 of ZW2 830 cents (June 2021: ZW1 188 cents) is based on the attributable profit after tax of ZW$4 458 132 713 (June 2021: ZW$1 870 998 492) and weighted average number of shares of 157 522 902 (June 2021:157 522 902)
   The unreviewed historical cost calculation of basic/headline earnings per share for the period ended 30 June 2022 of ZW10 061 cents (June 2021: ZW526 cents) is based on the attributable profit after tax of ZW$15 848 461 733 (June 2021: ZW$828 960 869) and weighted average number of shares of 157 522 902 (June 2021:157 522 902).
   There were no dilutive instruments for the period.
2. RISK MANAGEMENT

18.1 Capital risk management

The primary objectives in managing capital at the Group are:

• To guarantee the ability of entities within the Group to continue as going concerns whilst providing an equitable return to the Group's shareholders and benefit to customers and other stakeholders.
• To maintain a strong fallback position which is commensurate with the level of risk undertaken by the entities within the Group in the normal course of their business.
• To comply with the regulatory capital requirements as prescribed by relevant authorities.

The Group's capital consists of equity attributable to the shareholders of the parent Company, comprising the issued share capital, reserves and retained income (all referred to as shareholder's equity) and debt, which includes direct loans plus the residual funding from deposit taking activities after deducting the associated liquidity buffer (referred to as operational funding).

The Group's operating target is to maintain operating assets at a level that is lower than the available operating funds at all times in order to restrict recourse on shareholders' equity for operational funding. Gearing was maintained at above 18%, throughout the year, the Group borrowed funds with a maturity value of ZW$20 million in 2025.

The gearing level, and the loan instrument used are considered comfortable for the Group's operations and are not expected to cause a strain in cash resources in the foreseeable future.

The banking and insurance operations in the Group are subject to prescribed minimum regulatory capital requirements and minimum capital adequacy and solvency ratios as prescribed from time to time.

Management of the Group monitors the level of capital adequacy on a continual basis, employing techniques adopted from the guidelines developed by the Basel Committee and contained in the Basel II capital accord as implemented by the supervisory authorities for each of the affected entities. For the life assurance business, regular actuarial reviews are undertaken to establish the solvency of the business.

An Internal Capital Adequacy Assessment Plan (ICAAP) has been developed for Banking operations and defines capital targets which are generally set above regulatory levels, stress test scenarios and risk appetite across different lines of operations.

18.2 Financial risk management

The Group maintains active trading positions in a variety of non-derivative financial instruments in anticipation of customer demand. The Group manages its trading activities by the type of risk involved and on the basis of the categories of trading instruments held. Regular feedback on risk related matters is provided to the Board through the Board Governance, Risk and Compliance Committee.

18.2.1 Classification and measurement of financial assets and liabilities

				Reviewed Inflation adjusted
		CARRYING AMOUNT				FAIR VALUE
	Designated	Classified	Designated
	at FVTPL	at AMCO	at FVTOCI	Total		Level 1	Level 2	Level 3	Total
30 June 2022	ZW$	ZW$	ZW$	ZW$		ZW$	ZW$	ZW$	ZW$
Financial assets measured at fair value:
Listed equity securities	1 968 140 919	-	-	1 968 140 919	1 968 140 919	-	-	1 968 140 919
Unlisted equity investments	5 603 386 360	-	-	5 603 386 360	-	- 5 603 386 360	5 603 386 360
Treasury bills	6 127 728 321	- 1 170 406 146	7 298 134 467	-	6 127 728 321	1 170 406 146	7 298 134 467
Financial assets not measured at fair value:
Trade and other receivables	-	8 849 460 689	-	8 849 460 689
Cash and cash equivalents	-	28 954 067 340	-	28 954 067 340
Treasury bills	-	39 832 567	-	39 832 567
Advances and other accounts	-	20 762 092 597	-	20 762 092 597
Total	13 699 255 600	58 605 453 193	1 170 406 146	73 475 114 939
Financial liabilities
Deposit and other accounts	-	(43 106 109 672)	-	(43 106 109 672 )
Trade and other payables	-	(11 245 290 691)	-	(11 245 290 691 )
Offshore borrowings	-	(3 934 977 887)	-	(3 934 977 887 )
Short term borrowings	-	(478 706 849)	-	(478 706 849 )
Long term borrowings	-	(17 596 362)	-	(17 596 362 )
Total	-	(58 782 681 461)	-	(58 782 681 461 )

ZBFH 257

5