AUDITED INFLATION ADJUSTED FINANCIAL HIGHLIGHTS
Total assets | Total capital and reserves | Net profit after tax |
85% 114% 389%
31 Dec 2022 | 31 Dec 2022 | 31 Dec 2022 | ||
ZW$321bn | ZW$148.37bn | ZW$34.71bn | ||
31 Dec 2021 | 31 Dec 2021 | 31 Dec 2021 | ||
ZW$173.60bn | ZW$69.20bn | ZW$7.10bn |
Return on equity | Liquidity ratio | Cost to income ratio |
19pps | 10pps | 11pps |
31 Dec 2022 | 31 Dec 2022 | 31 Dec 2022 | ||
32% | 72% | 58% | ||
31 Dec 2021 | 31 Dec 2021 | 31 Dec 2021 | ||
13% | 62% | 69% |
pps - percentage points
CHAIRMAN'S STATEMENT
I am pleased to present the performance of the Group for the year ended 31 December 2022. The Group delivered strong financial results despite the domestic economic challenges.
Operating Environment:
The domestic economy is estimated to have grown by 4% in 2022, underpinned by output growth in mining (10%), construction (10.5%), and accommodation and food services (56.3%). The country benefitted from an above average agriculture season, which culminated in good output in key crops, including wheat and tobacco.
Furthermore, the economy registered significant improvements in foreign currency receipts, upwards of US$11.6bn according to the Reserve Bank of Zimbabwe (RBZ). Export earnings and Diaspora remittances were amongst the major contributors of the record foreign currency receipts achieved in 2022.
Partly as a result of the improved foreign currency receipts, and in part as a result of continued depreciation of the local currency, the economy recorded an increase in the use of USD currency for trade, with the RBZ estimating that close to 70% of transactions are now being conducted in hard currency.
Meanwhile, annual inflation remained high during the year under review, rising from 60.6% in January 2022 to 243.75% as at December 2022. There was however an improvement in month on month inflation which rose from 5.3% in January 2022 to a peak of 30.7% in June 2022, before progressively reducing to a yearly low of 1.8% in November 2022 and ending the year at 2.4% in December 2022.
Group Performance:
The Group posted a profitable performance for the year. This is detailed in the Group Chief Executive Officer's report.
Capital Requirements:
As at 31 December 2022, all Group companies, with the exception of ZB Building Society, were in compliance with prescribed minimum capital requirements. The Group is still working to consolidate all its banking operations under one licence, that is, merging ZB Bank Limited, ZB Building Society and Intermarket Banking Corporation.
Dividends:
The Board has declared a final dividend of ZW837.49 cents per share for the year ended 31 December, 2022. This brings the aggregate dividend for the year ended 31 December 2022 to ZW914.67 cents per share. A separate dividend notice will be published to this effect.
Compliance & Regulatory Issues:
The Group dealt with all 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, and the Corrective order was lifted on the 9th of December 2022, after a satisfactory review by the regulator.
Sustainability:
The Group embarked on a journey of integrating sustainability into its business value chains. The integration goes beyond the current process of attaining the Sustainability Standards Certification Initiative (SSCI) by the European Organisation for Sustainable Development (EOSD). Our goal is to ensure sustainability is fully embedded in our products and services, operations, how we engage with our clients, and business relations. Sustainability will now define how ZB Financial Holdings does business going forward.
Directorate:
Mr K. Maukazuva resigned from the Board on 31 August 2022. I would like to extend my gratitude and appreciation to him for his distinguished service to the Group.
Mrs Georgina Chikomo, resigned from the Group with effect from the 1st of September 2022. She was the Managing Director for ZB Bank Limited. I wish Mrs Georgina Chikomo success in her future endeavours.
In her stead, Mr Elisha Chibvuri was appointed as the new Chief Executive Officer for ZB Bank Limited.
The Group underwent an organisational transformation program, which led to a restructure of the organisation.
The Group is now made up of three main clusters, namely Banking, Investment and Insurance Clusters. The following appointments were made for the Chief Executive Officers of the Clusters:
Elisha Chibvuri-Banking Cluster; Tandiwe Masunda-Investments Cluster; and Letwin Mawire-Insurance Cluster.
I pledge the Board's support to Mr E. Chibvuri, Ms T Masunda and Mrs L Mawire and wish them enjoyable and successful terms of office.
Outlook:
In the outlook, the domestic economy is projected to grow by 3.8% in 2023, underpinned by growth in output from the mining, construction, agriculture and accommodation (tourism) sectors. The envisaged growth is mainly premised on normal to above normal rainfall patterns and optimal distribution thereof, favourable international commodity prices, continuance of tight monetary and fiscal policies to engender stability, as well as continued slowdown in inflation, among other factors.
Downside risks to the attainment of projected economic growth outturn for 2023 relate to effects of power shortages and load shedding on production, the continued effects of disruptions in global supply chains and rising global inflation, uncertainty and potentially destabilising effects of the 2023 harmonised national elections, monetary instability (exchange rate depreciation and inflation), unreliable rainfall patterns and distribution, among other factors.
The Group will continue to focus on revenue growth and cost optimisation strategies with an overal aim of growing and strengthening the balance sheet position. The Group will continue with its Organisational Transformation Programme focussing more on improving the effectiveness and efficiencies of back-end systems.
Conclusion:
I would like to express my appreciation to our valued customers and all key stakeholders, for the continued support to the ZBFH Group. I extend my gratitude to Board colleagues, Management and Staff, without whose collective contributions the Group would not have been able to achieve the 2022 performance.
P.Chiromo
Chairman
19 April, 2023
1
GROUP CHIEF EXECUTIVE'S REPORT
Introduction:
The Group's primary financial statements are adjusted for inflation in terms of International Accounting Standard (IAS) - Financial Reporting in Hyperinflationary Economies.
Historical cost financial statements have been issued for information purposes only.
Performance Outturn:
The Group recorded a 75% increase in total income from ZW$40.343bn in 2021 to ZW$70.542bn in 2022. This positive outturn was achieved on the back of significant rise in trading income and fair value credits.
Net interest income increased by 77%, from ZW$11.359bn in 2021 to ZW$20.050bn in 2022. The performance was underpinned by the growth in the loans and advances book. Gross loan impairment charges to the income statement surged by 229%, from ZW$2.136bn in 2021 to ZW$7.035bn in 2022. As a result, net income from lending activities registered a growth of 41%, from ZW$9.224bn in 2021 to ZW$13.015bn in 2022.
The Group's commissions and fees moved up by 38% from ZW$11.570bn in 2021 to ZW$15.910bn. The improvement in commissions was supported by growth in both number of customers and volume of transactions as a result of the Group's Organisational Transformation Programme journey.
Other operating income improved by 394% from ZW$4.500bn in 2021 to ZW$22.237bn. Other income largely constituted by the realised foreign exchange gains from treasury trading activities and unrealised gains from revaluation of the Group's foreign denominated balances.
Fair value adjustments moved from ZW$12.195bn in 2021 to ZW$15.492bn, as a result of higher fair value gains from investment properties.
Net insurance related earnings increased by 36%, from ZW$2.854bn in 2021, to ZW$3.889bn in 2022, on the back of a 120% rise in gross premiums from ZW$6.814bn in 2021 to ZW$15.014bn in 2022, which was partially off-set by a rise in insurance related expenses by 181% from ZW$3.960bn in 2021 to ZW$11.125bn in 2022.
Meanwhile, operating costs rose by 46% from ZW$27.925bn in 2021 to ZW$40.708bn in 2022, largely on account of the effects of inflation.
Profit from ordinary activities improved by 140%, from ZW$12.418bn in 2021 to ZW$29.834bn in 2022.
Performance was also enhanced by a 1 909% rise in share of associate companies' profit net of tax, from ZW$0.269bn in 2021 to ZW$5.395bn in 2022.
Net profit registered a 391% increase, from ZW$7.074bn attained in 2021 to ZW$34.715bn in 2022.
Meanwhile, total assets for the Group increased by 85% in real terms, to close the year 2022 at ZW$320.964bn. A rebalancing of the asset mix was undertaken during the year through acquisition of Mashonaland Holdings, which saw a 516% increase in investment properties.
Deposits and other related funding account balances grew by 62%, from ZW$67.616bn as at 31 December 2021 to ZW$109.210bn as at 31 December 2022.
Earning assets increased by 95% from ZW$99.353bn as at 31 December 2021 to close the year 2022 at ZW$194.232bn, whilst constituting 61% of total assets (57% at 31 December 2021).
The Group maintained a comfortable liquidity margin of safety, with the ratio of liquid assets to customer deposits being above 60% throughout the year against a prescribed ratio of 30%.
The Group's total equity increased by 114%, from ZW$69.189bn as at 31 December 2021 to ZW$148.370bn as at 31 December 2022, underpinned by the positive performance outturn for the year, as well as gains on the revaluation of properties and equipment.
Operations Review:
Banking Operations:
ZB Bank Limited posted a profit after tax of ZW$14.523bn in 2022, as compared to ZW$6.413bn in 2021. Its total assets stood at ZW$200.360bn as at 31 December 2022, from ZW$127.290bn as at 31 December 2021.
ZB Building Society posted a profit after tax of ZW$4.472bn in 2022, as compared to a profit of ZW$2.807bn in 2021. The Society's total assets stood at ZW$17.742bn as at 31 December 2022, from ZW$10.093bn as at 31 December 2021.
Insurance Operations:
ZB Reinsurance posted a profit after tax of ZW$1.951bn in 2022 compared to ZW$1.538bn in 2021. Its total assets increased in real terms from ZW$6.396bn as at 31 December 2021 to close the year 2022 at ZW$9.945bn.
ZB Life Assurance posted a profit of ZW$2.324bn in 2022, compared to a loss of ZW$0.097bn in 2021. Its total assets increased in real terms from ZW$20.240bn as at 31 December 2021 to ZW$28.094bn as at 31 December 2022.
Strategic Operations:
The Group has adopted a regional expansion strategy, and in November 2022, it successfully launched reinsurance operations in Botswana.
During the year, the Group acquired additional equity interest in Mashonaland Holdings Limited (Mash) and achieved a shareholding of above 50%, granting it control of Mash and subsequently became a subsidiary of the Group with effective 31December 2022.
Internal Processes:
The Group progressed its transformation program during 2022, which entailed a review of its business model and organisational design. The Group's project to re-purpose bank branches into Group-wide customer service centres to enhance customer convenience has been a huge success, and as at end of December 2022, a total of 25 branches had been renovated and converted into customer service centres. The remaining 20 will be done in 2023.
Sustainability:
The Group continue to integrate sustainability across operations; this compels ZBFH to strike a balance between the welfare of the People it serves, the preservation and promotion of the Environment (Planet) in which it operates, and the quest for Value Creation (Profit). Towards this end, the Group is working on attaining certification under the Sustainability Standards Certification Initiative (SSCI) by the European Organisation for Sustainable Development (EOSD) - ZBFH is one of the financial institutions under the RBZ-led SSCI certification program.
The Group adopted a Purpose Statement to "improve lives through service", and its 3 High Impact Goals: "Promote financial inclusion", "Foster investments in Sustainable Infrastructure", and "Stimulate the Real Economy". The goals are structured to ensure ZBFH avails resources towards supporting Government's National Development Strategy 1 (NDS1), and the Sustainable Development Goals (SDGs), towards the country's Vision 2030.
To demonstrate our commitment to sustainability, the Group commenced greening its own premises by rolling out solar energy. To date, solar power has been installed at the Group's Head Office, and service centres across the country will be added in 2023.
Further, the Group adopted the Global Reporting Initiatives (GRI) Standards as a strategy for identifying and being accountable on economic, environmental, social, and governance impacts and opportunities while building shared values with stakeholders. To this effect, the Group has prepared this annual report in accordance with GRI Standards to demonstrate its commitment to corporate sustainability.
Human Capital:
As part of the organisational transformation, the Group reviewed its organisational design, and came up with a new Group Structure supportive of its Strategy going forward. This resulted in an evaluation of jobs, coming up with new jobs and some old jobs falling away, and resultantly there have been redeployments as well as skilling and training to ensure attainment of required skills set.
Despite a challenging operating environment, staff attrition in the Group remained within acceptable levels.
The Group staff complement as at 31 December 2022 stood at 965.
Industrial relations remained cordial during the year under review.
Appreciation:
I extend my gratitude to our valued customers and all key stakeholders for their continued support and commitment to the ZBFH Group.
My deep appreciation also goes to the Group's Staff and Management team for their hard work and dedication which produced the 2022 financial results.
As ZBFH Group team, we undertake to continue living up to our Mission: "to work hard everyday to create happy people", including but not limited to our customers, employees, shareholders, regulators, among all other stakeholders.
Finally, I would like to thank the Board for its valuable contribution and counsel.
S. T. Fungura
Group Chief Executive
19 April, 2023
0143ZBFH
AUDITOR'S STATEMENT
The consolidated inflation adjusted financial results should be read in conjunction with the complete set of inflation adjusted consolidated and separate financial statements as at and for the year ended 31 December 2022, which have been audited by KPMG Chartered Accountants (Zimbabwe) and an unmodified opinion has been issued thereon indicating that the financial statements present fairly the inflation adjusted consolidated and separate statement of financial position of ZB Financial Holdings Limited as at 31 December 2022 and the inflation adjusted consolidated and separate statement of comprehensive income, the inflation adjusted consolidated and separate statement of changes in equity and the inflation adjusted consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2022
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$ |
The auditors' report includes key audit matters in respect of the valuation of owner-occupied property and equipment and investment property, valuation of Incurred But not reported claims Reserve (IBNR) and life assurance funds and, expected credit loss allowance on loans and advances.
The auditors' report has been made available to management and the directors of ZB Financial Holdings Limited.
The Engagement Partner responsible for the audit was Michael de Beer (PAAB Practicing Certificate Number 0369).
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2022
Inflation adjusted | *Unaudited Historical cost | ||||
31 Dec 2022 | 31 Dec 2021 | 31 Dec 2022 | 31 Dec 2021 | ||
Notes | ZW$ | ZW$ | ZW$ | ZW$ | |
ASSETS | |||||
Cash and cash equivalents | 61 715 351 709 | 33 386 228 099 | 61 715 351 709 | 9 712 078 202 | |
Treasury bills | 3 | 16 762 999 294 | 8 285 750 617 | 16 762 999 294 | 2 410 330 922 |
Mortgages and other advances | 4.1 | 64 869 704 742 | 42 051 861 878 | 64 869 704 742 | 12 232 917 414 |
Financial assets at fair value | |||||
through profit or loss | 15 994 026 238 | 14 006 384 419 | 15 994 026 238 | 4 074 467 484 | |
Financial assets held at amortised cost | 1 107 018 423 | 2 032 196 187 | 1 107 018 423 | 591 167 359 | |
Investments in associates | 1 307 334 965 | 17 683 425 169 | 905 091 617 | 4 816 276 853 | |
Inventories | 306 747 659 | 271 701 550 | 299 332 399 | 72 791 173 | |
Trade and other receivables | 11 305 343 087 | 6 849 279 788 | 11 183 791 416 | 1 992 460 506 | |
Investment properties | 5 | 94 190 767 843 | 15 293 703 340 | 94 190 767 843 | 4 448 949 501 |
Right of use assets | 6 | 1 597 994 189 | 760 927 541 | 372 877 689 | 102 568 596 |
Property and equipment | 7 | 49 339 048 115 | 32 234 411 050 | 49 166 748 392 | 9 373 518 085 |
December 2021
Balance 1 January 2021
Changes in equity for 2021
Profit or loss
Profit for the year
Other comprehensive income, net tax
Revaluation of property
Fair value gain on financial assets at FVTOCI
Transaction with owners of the parent
Dividends paid
Other movements
Transfer to retained income
Effects of inflation adjustments
Balance at 31 December 2021
December 2022
Balance at 1 January 2022
Changes in equity for 2022
Profit or loss
Profit for the year
Other comprehensive income, net of tax
Revaluation of property
Fair value gain on financial assets at FVTOCI
Transaction with owners of the parent
Dividends paid Other movements Opening balance differences Transfer to retained income Effects of inflation adjustments Arising from acquisition of subsidiary Balance at 31 December 2022
401 764 080 | 6 210 635 659 | 72 589 119 | 10 971 232 602 | (9 908 493) | 19 881 144 429 | 37 527 457 396 | 6 884 340 556 | 44 411 797 952 |
- | - | - | - | - | 5 254 516 620 | 5 254 516 620 | 1 819 977 234 | 7 074 493 854 |
- | - | - | 18 174 288 190 | - | - 18 174 288 190 | 9 278 134 | 18 183 566 324 | |
- | - | - | - | 142 715 | - | 142 715 | - | 142 715 |
- | - | - | - | - | (477 569 212) | (477 569 212) | (7 450 758 ) | (485 019 970 ) |
(236 427 593) | - | 236 427 593 | - | - | - | |||
- | - | - | - | 3 744 088 | - | 3 744 088 | - | 3 744 088 |
401 764 080 | 6 210 635 659 | 72 589 119 | 28 909 093 199 | (6 021 690) | 24 894 519 430 | 60 482 579 797 | 8 706 145 166 | 69 188 724 963 |
401 764 080 | 6 210 635 659 | 72 589 119 | 28 909 093 199 | (6 021 690) | 24 894 519 430 | 60 482 579 797 | 8 706 145 166 | 69 188 724 963 |
- | - | - | - | - | 29 412 466 242 | 29 412 466 242 | 5 302 124 299 | 34 714 590 541 |
- | - | - | 14 171 319 397 | - | - 14 171 319 397 | 195 896 148 | 14 367 215 545 | |
- | - | - | - | (1 682 839 576) | - (1 682 839 576) | - (1 682 839 576 ) | ||
- | - | - | - | - | (253 440 475) | (253 440 475) | (5 493 705 ) | (258 934 180 ) |
- | - | - | (24 732 931) | - | - | (24 732 931) | - | (24 732 931 ) |
- | - | - | (28 599 484) | - | 28 599 484 | - | - | - |
- | - | - | - | 4 269 976 | - | 4 269 976 | - | 4 269 976 |
- | - | - | - | - | (8 464 496 880) | (8 464 496 880) | 40 525 999 485 | 32 061 502 605 |
401 764 080 | 6 210 635 659 | 72 589 119 | 43 027 080 181 | (1 684 591 290) | 45 617 647 801 | 93 645 125 550 | 54 724 671 393 | 148 369 796 943 |
Intangible assets | 8 | 1 466 532 579 | 695 956 323 | 703 404 671 | 22 206 622 |
Deferred tax assets | 1 000 870 820 | 22 145 795 | 972 458 574 | 101 233 | |
Total assets | 320 963 739 663 | 173 573 971 756 | 318 243 573 007 | 49 849 833 950 | |
LIABILITIES | |||||
Deposits and other accounts | 9 | 109 210 262 835 | 67 616 498 841 | 109 210 262 835 | 19 669 689 027 |
*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$ |
Short term borrowings | - | 1 386 491 893 | - | 403 331 507 | |
Trade and other payables | 30 106 674 331 | 14 616 131 681 | 29 981 905 063 | 4 251 843 409 | |
Current tax liabilities | 603 087 684 | 413 690 292 | 603 087 684 | 120 342 809 | |
Long term borrowings | 11 | 17 795 055 | 58 259 293 | 17 795 055 | 16 947 671 |
Life assurance funds | 15 125 148 377 | 10 870 772 488 | 15 125 148 377 | 3 162 315 677 | |
Offshore borrowings | 6 714 466 000 | 2 261 634 881 | 6 714 466 000 | 657 911 243 | |
Deferred tax liabilities | 9 994 374 168 | 6 750 329 683 | 9 767 230 215 | 1 959 555 227 | |
Lease liabilities | 10 | 822 134 270 | 411 437 741 | 822 134 270 | 119 687 540 |
Total liabilities | 172 593 942 720 | 104 385 246 793 | 172 242 029 499 | 30 361 624 110 | |
EQUITY | |||||
Share capital | 401 764 080 | 401 764 080 | 1 751 906 | 1 751 906 | |
Share premium | 6 210 635 659 | 6 210 635 659 | 27 081 696 | 27 081 696 | |
Other components of equity | 41 415 078 010 | 28 975 660 628 | 36 140 121 639 | 8 077 241 786 | |
Retained income | 45 617 647 801 | 24 894 519 430 | 54 932 296 831 | 8 721 358 380 | |
Functional currency | |||||
translation reserve | - | - | 101 292 105 | 101 292 105 | |
Attributable to equity | |||||
93 645 125 550 | 60 482 579 797 | 91 202 544 177 | 16 928 725 873 | ||
holders of parent | |||||
Non-controlling interests | 54 724 671 393 | 8 706 145 166 | 54 798 999 331 | 2 559 483 967 | |
Total equity | 148 369 796 943 | 69 188 724 963 | 146 001 543 508 | 19 488 209 840 | |
Total equity and liabilities | 320 963 739 663 | 173 573 971 756 | 318 243 573 007 | 49 849 833 950 |
*The historical cost financial information is shown as supplementary information. This information does not comply with the International Financial Reporting Standards in that it has not taken into account the requirements of International Accounting Standard 29 - Financial Reporting for Hyperinflationary Economies. As a result, the auditors have not expressed
an opinion on the historical financial information.
December 2021
Balance 1 January 2021
Changes in equity for 2021
Profit or loss
Profit for the year
Other comprehensive income, net tax Revaluation of property
Fair value gain on financial assets at FVTOCI
Transaction with owners of the parent
Dividends paid
Other movements
Transfer to retained income
Balance at 31 December 2021
December 2022
Balance at 1 January 2022
Changes in equity for 2022
Profit or loss
Profit for the year
Other comprehensive income, net of tax
Revaluation of property
Fair value gain on financial assets at FVTOCI Transaction with owners of the parent Dividends paid
Other movements
Opening balance differences Transfer to retained income Arising from acquisition of subsidiary Balance at 31 December 2022
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 |
- | - | - | - | - | - | 4 949 147 878 | 4 949 147 878 | 1 283 650 931 | 6 232 798 809 |
- | - | - | - | 5 710 640 955 | - | - 5 710 640 955 | 26 771 821 | 5 737 412 776 | |
- | - | - | - | - | 41 515 | - | 41 515 | - | 41 515 |
- | - | - | - | - | - | (116 730 718) | (116 730 718) | (1 668 971) | (118 399 689 ) |
- | - | - | - | (44 267 275) | - | 44 267 275 | - | - | - |
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 |
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 |
- | - | - | - | - | - | 51 877 535 187 | 51 877 535 187 | 11 374 952 408 | 63 252 487 595 |
- | - | - | - | 29 798 650 523 | - | - 29 798 650 523 | 334 489 747 | 30 133 140 270 | |
- | - | - | - | - | (1 682 839 576) | - (1 682 839 576) | - (1 682 839 576 ) | ||
- | - | - | - | - | - | (227 737 724) | (227 737 724) | (2 676 649) | (230 414 373 ) |
- | - | - | - | (7 194 829) | - | - | (7 194 829) | - | (7 194 829 ) |
- | - | - | - | (23 082) | - | 23 082 | - | - | - |
- | - | - | (45 713 183) | - | - | (5 438 882 094) | (5 484 595 277) | 40 532 749 858 | 35 048 154 581 |
1 751 906 | 27 081 696 | 101 292 105 | (39 895 225) | 37 864 608 156 | (1 684 591 292) | 54 932 296 831 | 91 202 544 177 | 54 798 999 331 | 146 001 543 508 |
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the year ended 31 December 2022
Inflation adjusted | *Unaudited Historical cost | ||||
31 Dec 2022 | 31 Dec 2021 | 31 Dec 2022 | 31 Dec 2021 | ||
Notes | ZW$ | ZW$ | ZW$ | ZW$ | |
Interest income | 13 | 25 555 562 736 | 13 574 602 635 | 19 071 593 638 | 3 208 995 587 |
Interest expense | 14 | (5 506 054 543) | (2 215 364 997) | (4 030 164 485) | (527 138 481) |
Net interest income | 20 049 508 193 | 11 359 237 638 | 15 041 429 153 | 2 681 857 106 | |
Loan impairment charges, | |||||
net recoveries | (7 034 792 876) | (2 135 692 678) | (5 079 300 946) | (486 046 039) | |
Net income from lending activities | 13 014 715 317 | 9 223 544 960 | 9 962 128 207 | 2 195 811 067 | |
Gross insurance premium income | 15 014 327 254 | 6 813 852 098 | 11 216 666 424 | 1 648 030 847 | |
Total insurance expenses | (11 125 136 235) | (3 959 632 009) | (8 582 653 982) | (930 048 584) | |
Net insurance income | 3 889 191 019 | 2 854 220 089 | 2 634 012 442 | 717 982 263 | |
Commissions and fees | 15 909 551 865 | 11 570 059 276 | 11 834 711 155 | 2 693 561 584 | |
Operating income | 22 236 957 505 | 4 500 340 019 | 23 915 286 265 | 1 395 228 355 | |
Fair value adjustments | 15 491 546 165 | 12 194 933 069 | 36 807 992 683 | 5 438 108 413 | |
Total income | 70 541 961 871 | 40 343 097 413 | 85 154 130 752 | 12 440 691 682 | |
Operating expenses | 16 | (40 707 582 286) | (27 925 430 639) | (29 984 596 863) | (5 370 447 701) |
Profit from ordinary activities | 29 834 379 585 | 12 417 666 774 | 55 169 533 889 | 7 070 243 981 | |
Bargain Purchase | 12.3.5 | 8 320 504 601 | - | 8 464 659 071 | - |
Movement in life assurance funds | (4 254 375 889) | (1 622 433 895) | (11 962 832 700) | (1 488 559 527) | |
Share of associate companies | |||||
profit net of tax | 5 395 318 512 | 268 532 999 | 15 256 168 798 | 1 922 594 906 | |
Effects of inflation adjustments | (3 454 444 508) | (2 332 374 387) | - | - | |
Profit before taxation | 35 841 382 301 | 8 731 391 491 | 66 927 529 058 | 7 504 279 360 | |
Income tax expense | 17 | (992 081 726) | (1 658 458 379) | (3 635 854 214) | (1 282 283 022) |
Net profit for the year from | |||||
continuing operations | 34 849 300 575 | 7 072 933 112 | 63 291 674 844 | 6 221 996 338 | |
(Loss)/profit from discontinued | |||||
operations | (134 710 034) | 1 560 742 | (39 187 249) | 10 802 471 | |
Net profit for the year | 34 714 590 541 | 7 074 493 854 | 63 252 487 595 | 6 232 798 809 | |
Profit attributable to: | |||||
Owners of parent from continuing | |||||
operations | 29 547 176 276 | 5 252 955 878 | 51 916 722 436 | 4 938 345 407 | |
Owners of parent from discontinued | |||||
operations | (134 710 034) | 1 560 742 | (39 187 249) | 10 802 471 | |
Non-controlling interests | 5 302 124 299 | 1 819 977 234 | 11 374 952 408 | 1 283 650 931 | |
Profit for the year | 34 714 590 541 | 7 074 493 854 | 63 252 487 595 | 6 232 798 809 | |
Other comprehensive income: | |||||
Items that will not be reclassified | |||||
to profit or loss | |||||
Gains on property and equipment | |||||
revaluation | 16 089 452 599 | 22 931 138 910 | 33 870 909 776 | 6 715 244 649 | |
Fair value gains on financial | |||||
assets at FVTOCI | (2 235 440 456) | 189 580 | (2 235 440 457) | 55 149 | |
Income tax relating to components | |||||
of other comprehensive income | (1 169 636 174) | (4 747 619 451) | (3 185 168 625) | (977 845 507) | |
Other comprehensive income | |||||
for the year net of tax | 12 684 375 969 | 18 183 709 039 | 28 450 300 694 | 5 737 454 291 | |
Total comprehensive income | |||||
for the year | 47 398 966 510 | 25 258 202 893 | 91 702 788 289 | 11 970 253 100 | |
Total comprehensive income | |||||
attributable to: | |||||
Owners of parent from continuing | |||||
operations | 42 035 656 098 | 23 427 386 787 | 80 032 533 382 | 10 649 027 877 | |
Owners of parent from discontinued | |||||
operations | (134 710 034) | 1 560 742 | (39 187 249) | 10 802 471 | |
Non-controlling interests | 5 498 020 446 | 1 829 255 364 | 11 709 442 156 | 1 310 422 752 | |
Total comprehensive income | |||||
for the year | 47 398 966 510 | 25 258 202 893 | 91 702 788 289 | 11 970 253 100 | |
Earnings per share | |||||
Basic and fully diluted earnings | |||||
per share (ZW cents) | 18 671.87 | 3 335.72 | 32 933.33 | 3 141.86 | |
*The historical cost financial information is shown as supplementary information. This information does not comply with the International Financial Reporting Standards in that it has not taken into account the requirements of International Accounting Standard 29 - Financial Reporting for Hyperinflationary Economies. As a result, the auditors have not expressed an opinion on the historical financial information.
2
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2022
Inflation adjusted | *Unaudited Historical cost | |||
31 Dec 2022 | 31 Dec 2021 | 31 Dec 2022 | 31 Dec 2021 | |
ZW$ | ZW$ | ZW$ | ZW$ | |
Cash generated from/(used in) operating activities | 40 281 779 209 | (1 126 471 755) | 66 961 136 107 | 3 461 533 325 |
Interest received | 25 555 562 736 | 13 574 602 635 | 19 071 593 638 | 3 208 995 587 |
Dividends received from listed equities | 460 222 932 | 1 112 759 564 | 321 401 726 | 259 918 529 |
Dividend received from associates | 63 337 203 | 36 093 887 | 53 604 367 | 8 431 407 |
Interest expense paid | (5 506 054 543) | (2 215 364 997) | (4 030 164 485) | (527 138 481) |
Interest paid expense lease liability | (409 713 988) | (236 909 950) | (309 586 388) | (19 538 243) |
Income tax paid | (3 057 369 958) | (2 848 328 952) | (2 754 565 817) | (771 615 154) |
Interest expense on offshore borrowings | (427 460 077) | (110 357 749) | (329 280 095) | (25 305 278) |
Net cash generated from operating activities | 56 960 303 514 | 8 186 022 683 | 78 984 139 053 | 5 595 281 692 |
Cash flows from investing activities | ||||
Purchase of investment property | (36 127 790) | (375 364 167) | (33 074 760) | (87 984 925) |
Purchase of intangible assets | (1 087 133 944) | (37 715 405) | (691 561 685) | (10 358 475) |
Purchase of property and equipment | (4 645 546 671) | (658 289 325) | (3 923 164 384) | (160 003 669) |
Proceeds on disposal of property and equipment | 24 223 530 | 47 921 598 | 16 533 882 | 13 940 431 |
Purchase of investment securities | (6 781 659 180) | (4 574 909 089) | (6 185 156 979) | (1 060 875 001) |
Proceeds on disposal of investment securities | 2 478 131 201 | 3 031 718 800 | 2 109 197 734 | 720 406 630 |
Acquisition of subsidiary net of cash acquired | 501 097 571 | - | 656 715 208 | - |
Net cash used in investing activities | (9 547 015 283) | (2 566 637 588) | (8 050 510 984) | (584 875 009) |
Cash flows from financing activities | ||||
Dividends paid | (258 934 180) | (485 019 970) | (230 414 373) | (118 399 689) |
Lease capital payments | (164 639 964) | (72 005 934) | (74 971 893) | (50 101 593) |
Proceeds from offshore borrowings | 27 654 623 423 | 1 706 226 860 | 20 316 275 173 | 496 342 643 |
Repayment on offshore borrowings | (26 015 283 453) | (572 968 375) | (20 290 362 785) | (136 103 097) |
Proceeds from short term borrowings | - | 1 375 039 509 | - | 400 000 000 |
Repayments of short term borrowings | (1 617 367 879) | - | (512 438 356) | - |
Net cash (used in) / generated from | ||||
financing activities | (401 602 053) | 1 951 272 090 | (791 912 234) | 591 738 264 |
Net increase in cash and cash equivalents | 47 011 686 178 | 7 570 657 185 | 70 141 715 835 | 5 602 144 947 |
Cash and cash equivalents at beginning of year | 33 386 228 099 | 28 106 480 458 | 9 712 078 202 | 5 086 686 008 |
Effects of exchange rates fluctuating | ||||
on cash and cash equivalents | (18 682 562 568) | (2 290 909 544) | (18 138 442 328) | (976 752 753) |
Cash and cash equivalents at end of year | 61 715 351 709 | 33 386 228 099 | 61 715 351 709 | 9 712 078 202 |
Cash and cash equivalents comprise: | ||||
Cash | 19 525 996 958 | 14 890 278 237 | 19 525 996 958 | 4 331 592 843 |
Local bank accounts | 24 980 641 346 | 7 458 351 112 | 24 980 641 346 | 2 169 639 800 |
Foreign bank accounts | 17 208 713 405 | 11 037 598 750 | 17 208 713 405 | 3 210 845 559 |
61 715 351 709 | 33 386 228 099 | 61 715 351 709 | 9 712 078 202 |
*The historical cost financial information is shown as supplementary information. This information does not comply with the International Financial Reporting Standards in that it has not taken into account the requirements of International Accounting Standard 29 - Financial Reporting for Hyperinflationary Economies. As a result, the auditors have not expressed an opinion on the historical financial information.
NOTES TO CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For the year ended 31 December 2022
1. BASIS OF PREPARATION
1.1 Reporting currency
All Group entities have Zimbabwean dollar (ZW$) as their functional currency as at the reporting date. All information presented has been rounded off to the nearest dollar.
1.2 Statement of compliance
The consolidated and separate annual financial statements as at, and for the year ended 31 December 2022, have been prepared under the supervision of E Mungoni CA(Z), Group Chief Finance Officer of ZB Financial Holdings Limited. The consolidated and separate financial statements are based on accounting records maintained under the historical cost convention as modified by the revaluation of property and equipment, investment properties and certain financial instruments carried at fair value.
The preparation of the consolidated and separate financial statements, in conformity with IAS 29 "Financial Reporting in Hyperinflationary Economies" is required by International Financial Reporting Standards (IFRS). The consolidated and separate inflation adjusted financial statements are to be the principal financial statements of the Company and its subsidiaries. The consolidated and separate historical cost financial statements have been provided as supplementary information and as a result
the auditors have not expressed an opinion on them.0143 ZBFH
NOTES TO CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS (Continued)
1.2 Statement of compliance (continued) |
The consolidated and separate financial statements have been prepared in accordance with International Financial Reporting |
Standards (IFRS) promulgated by the International Accounting Standards Board (IASB) which includes standards and interpretations |
approved by IASB, the International Financial Reporting Interpretations Committee (IFRIC) 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, the Insurance Act (Chapter 24:07), the Microfinance Act (24:29), Securities and Exchange Act (Chapter 24:25) and relevant |
regulations made thereunder. |
NOTES TO CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS (Continued) | ||||
Inflation adjusted | ||||
Other | ||||
Banking | Insurance | strategic | ||
operations | operations | investments1 | Total | |
31 December 2021 | ZW$ | ZW$ | ZW$ | ZW$ |
The consolidated and separate financial statements were authorised for issue by the board of directors on 19 April 2023. |
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-InflationaryEconomies. 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) |
prepared by the Zimbabwe Central Statistical Office. The conversion factors used to restate the consolidated and separate financial |
statements at 31 December 2022 are as follows: |
Conversion | ||
Index | factors | |
31 December 2022 | 13 672.91 | 1.00 |
31 December 2021 | 3 977.46 | 3.44 |
31 December 2020 | 2 474.51 | 5.53 |
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. |
• All items in the consolidated and separate 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 |
External revenue
Net earnings from lending activities Net fees and commission income Corporate Banking
Retail Banking Insurance
Other commissions
Other revenue
Fair value adjustments
Total segment revenue
Inter-segmental Revenue
Total segment operating expenses
Material non-cash items included in the above figures:
Expected credit losses 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
9 187 764 345 | 45 246 902 | (9 466 287) | 9 223 544 960 | ||
11 378 963 869 | 2 863 253 022 | 182 062 474 | 14 424 279 365 | ||
1 723 467 427 | - | - | 1 723 467 427 | ||
9 655 496 442 | - | - | 9 655 496 442 | ||
- | 2 863 253 022 | - | 2 863 253 022 | ||
- | - | 182 062 474 | 182 062 474 | ||
4 734 863 292 | 842 114 910 | (1 076 638 183) | 4 500 340 019 | ||
8 638 948 050 | 3 292 820 068 | 263 164 951 | 12 194 933 069 | ||
33 940 539 556 | 7 043 434 902 | (640 877 045) | 40 343 097 413 | ||
309 128 886 | - | 5 049 399 868 | 5 358 528 754 | ||
(26 507 071 734) | (2 643 129 489) | 1 224 770 585 | (27 925 430 639) | ||
(1 881 629 784) | 30 243 898 | (284 306 792) | (2 135 692 678) | ||
(7 533 385 577) | (59 723 232) | (81 619 417) | (7 674 728 226) | ||
(137 558 990) | (36 831 392) | (520 178) | (174 910 560) | ||
- | 70 317 877 | 198 215 122 | 268 532 999 | ||
5 533 088 320 | 2 270 976 865 | 927 326 306 | 8 731 391 491 | ||
759 909 861 | 836 848 883 | 61 699 635 | 1 658 458 379 | ||
141 093 054 667 | 26 744 069 529 | 5 736 847 560 | 173 573 971 756 | ||
90 700 744 973 | 14 954 436 848 | (1 269 935 028) | 104 385 246 793 | ||
- | 13 703 765 875 | 3 979 659 294 | 17 683 425 169 |
inflation and is reversed to the consolidated and separate 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 and separate 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 |
Unaudited Historical cost | ||||
Other | ||||
Banking | Insurance | strategic | ||
operations | operations | investments1 | Total | |
31 December 2022 | ZW$ | ZW$ | ZW$ | ZW$ |
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 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 are done on a yearly basis as such the NAV will be approximately |
the fair value at year end. |
Business combinations |
The Group accounts for business combinations using the acquisition method when control is transferred to the entity parent. |
The consideration transferred in the acquisition is measured at fair value, as are the identifiable net assets acquired. Any |
excess of the consideration over the fair values of the identifiable net assets acquired is recognised as goodwill. Where the fair |
values of the identifiable net assets acquired exceed the consideration, a bargain purchase (negative goodwill) is recognised |
in profit or loss in the period of acquisition. Transaction costs are expensed, except if related to the issue of debt or equity |
securities. |
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts |
are generally recognised in profit or loss. |
Non-controlling interests (NCI) |
Non-controlling interests are measured at their proportionate share of the fair values of the assets and liabilities recognised. |
Changes in the Group's interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. |
External revenue
Net earnings from lending activities Net fees and commission income Corporate Banking
Retail Banking Insurance
Other commissions
Fair value adjustments
Other revenue
Total segment revenue
Inter-segmental Revenue
Total segment operating expenses
Material non-cash items included in the above figures:
Expected credit losses 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 2022
Reportable segment liabilities as at 31 December 2022
Investment in associates
10 188 830 631 | (184 734 411 ) | (41 968 013 ) | 9 962 128 207 | ||
11 646 128 970 | 2 640 306 846 | 182 287 780 | 14 468 723 596 | ||
1 763 932 477 | - | - | 1 763 932 477 | ||
9 882 196 493 | - | - | 9 882 196 493 | ||
- | 2 640 306 846 | - | 2 640 306 846 | ||
- | - | 182 287 780 | 182 287 780 | ||
27 278 164 074 | 8 966 582 648 | 563 245 961 | 36 807 992 683 | ||
20 564 958 239 | 4 168 936 174 | (818 608 148 ) | 23 915 286 265 | ||
69 678 081 914 | 15 591 091 257 | (115 042 420 ) | 85 154 130 751 | ||
873 325 269 | - | 110 034 925 911 | 110 908 251 180 | ||
(26 479 266 549) | (3 588 161 718 ) | 82 831 404 | (29 984 596 863) | ||
(4 910 887 165) | (146 359 328 ) | (22 054 453 ) | (5 079 300 946) | ||
(1 825 828 188) | (27 636 135 ) | (60 396 133 ) | (1 913 860 456) | ||
(7 087 898) | (989 281 ) | (94 143 ) | (8 171 322) | ||
- | 14 502 315 285 | 753 853 513 | 15 256 168 798 | ||
43 198 815 365 | 14 542 412 125 | 9 186 301 568 | 66 927 529 058 | ||
2 475 102 748 | 2 255 545 828 | (1 094 794 362 ) | 3 635 854 214 | ||
229 355 669 915 | 38 091 158 849 | 50 796 744 243 | 318 243 573 007 | ||
147 265 743 001 | 21 778 979 395 | 3 197 307 103 | 172 242 029 499 | ||
- | 18 432 124 531 | (17 527 032 914 ) | 905 091 617 |
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 2022.
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 Limited and ZB Reinsurance Limited, incorporated in this reporting package.
2. SEGMENT INFORMATION | |||||
Inflation adjusted | |||||
Other | |||||
Banking | Insurance | strategic | |||
operations | operations | investments1 | Total | ||
31 December 2022 | ZW$ | ZW$ | ZW$ | ZW$ | |
External revenue | |||||
Net earnings from lending activities | 13 404 492 436 | (236 325 431 ) | (153 451 688 ) | 13 014 715 317 | |
Net fees and commission income | 15 655 183 972 | 3 899 214 747 | 244 344 165 | 19 798 742 884 | |
Corporate Banking | 2 371 147 316 | - | - | 2 371 147 316 | |
Retail Banking | 13 284 036 656 | - | - | 13 284 036 656 | |
Insurance | - | 3 899 214 747 | - | 3 899 214 747 | |
Other commissions | - | - | 244 344 165 | 244 344 165 | |
Other revenue | 22 462 941 191 | 4 200 657 798 | (4 426 641 484 ) | 22 236 957 505 | |
Fair value adjustments | 13 095 728 424 | 3 002 874 128 | (607 056 387 ) | 15 491 546 165 | |
Total segment revenue | 64 618 346 023 | 10 866 421 242 | (4 942 805 394 ) | 70 541 961 871 | |
Inter-segmental Revenue | 1 574 161 504 | - | 65 547 522 559 | 67 121 684 063 | |
Total segment operating expenses | (39 307 083 122) | (5 145 561 979 ) | 3 745 062 815 | (40 707 582 286) | |
Material non-cash items included in | |||||
the above figures: | |||||
Expected credit losses | (6 795 733 709) | (217 004 715 ) | (22 054 452 ) | (7 034 792 876) | |
Fair value adjustments | 13 095 728 424 | 3 002 874 128 | (607 056 387 ) | 15 491 546 165 | |
Depreciation | (2 698 699 633) | (75 724 107 ) | (191 025 795 ) | (2 965 449 535) | |
Amortisation of intangible assets | (210 141 851) | (3 400 754 ) | (212 410 ) | (213 755 015) | |
Profit from associates net of tax | - | 4 809 434 065 | 585 884 447 | 5 395 318 512 | |
Reportable segment profit before taxation | 22 778 050 815 | 5 504 651 911 | 7 558 679 575 | 35 841 382 301 | |
Income tax expense | 950 822 994 | 1 234 031 079 | (1 192 772 347 ) | 992 081 726 | |
Reportable segment assets | |||||
as at 31 December 2022 | 230 681 824 377 | 38 205 175 316 | 52 076 739 970 | 320 963 739 663 | |
Reportable segment liabilities | |||||
as at 31 December 2022 | 147 400 945 505 | 21 780 973 766 | 3 412 023 449 | 172 593 942 720 | |
Investment in associates | - | 18 449 862 736 | (17 142 527 771 ) | 1 307 334 965 | |
3
Unaudited Historical cost | |||||
Other | |||||
Banking | Insurance | strategic | |||
operations | operations | investments1 | Total | ||
31 December 2021 | ZW$ | ZW$ | ZW$ | ZW$ | |
External revenue | |||||
Net earnings from lending activities | 2 188 865 002 | 10 851 943 | (3 905 878) | 2 195 811 067 | |
Net fees and commission income | 2 649 706 023 | 720 347 435 | 41 490 389 | 3 411 543 847 | |
Corporate Banking | 290 266 330 | - | - | 290 266 330 | |
Retail Banking | 2 359 439 693 | - | - | 2 359 439 693 | |
Insurance | - | 720 347 435 | - | 720 347 435 | |
Other commissions | - | - | 41 490 389 | 41 490 389 | |
Fair value adjustments | 3 745 593 043 | 1 540 905 654 | 151 609 716 | 5 438 108 413 | |
Other revenue | 1 259 120 986 | 210 517 140 | (74 409 771) | 1 395 228 355 | |
Total segment revenue | 9 843 285 054 | 2 482 622 172 | 114 784 456 | 12 440 691 682 | |
Inter-segmental Revenue | 54 646 481 | - | 7 178 557 225 | 7 233 203 706 | |
Total segment operating expenses | (4 806 790 757) | (645 962 332) | 82 305 388 | (5 370 447 701) | |
Material non-cash items included in | |||||
the above figures: | |||||
Expected credit losses | (483 265 771) | 8 797 972 | (11 578 240) | (486 046 039) | |
Depreciation | (380 517 367) | (10 578 538) | (14 717 374) | (405 813 279) | |
Amortisation of intangible assets | (975 633) | (575 159) | (94 142) | (1 644 934) | |
Profit from associates net of tax | - | 1 549 264 091 | 373 330 815 | 1 922 594 906 | |
Reportable segment profit before taxation | 5 036 494 297 | 1 897 364 406 | 570 420 657 | 7 504 279 360 | |
Income tax expense | 906 120 107 | 365 396 208 | 10 766 707 | 1 282 283 022 | |
Reportable segment assets as | |||||
at 31 December 2021 | 40 852 684 721 | 7 744 141 520 | 1 253 007 709 | 49 849 833 950 | |
Reportable segment liabilities as | |||||
at 31 December 2021 | 26 366 935 666 | 4 360 017 025 | (365 328 581) | 30 361 624 110 | |
Investment in associates | - | 3 983 413 613 | 832 863 240 | 4 816 276 853 | |
1 Includes consolidation journals.
3. TREASURY BILLS
3.1 Reported in the statements of financial position
The Reserve Bank of Zimbabwe (RBZ) has issued various forms of treasury bills which the Group has participated in. The Group has three categories of treasury bills classified as follows:
- as ''at "Fair value through profit or loss (FVTPL)'';
- as "at "Fair value through other comprehensive income (FVTOCI)"; and
- as "at amortised cost (AMCO)".
Treasury bills include: | |||||
Inflation adjusted | Unaudited Historical cost | ||||
31 Dec 2022 | 31 Dec 2021 | 31 Dec 2022 | 31 Dec 2021 | ||
ZW$ | ZW$ | ZW$ | ZW$ | ||
Assets classified as at fair value through | |||||
profit or loss' (FVTPL): | |||||
Short term treasury bills 1 | 6 724 208 776 | 7 154 704 011 | 6 724 208 776 | 2 081 308 636 | |
Assets classified as 'at fair value through | |||||
other comprehensive income (FVTOCI): | |||||
Medium term treasury bills acquired | |||||
from the market 2 | 9 998 488 908 | 979 865 722 | 9 998 488 908 | 285 043 656 | |
Assets classified as 'amortised cost' (AMCO): | |||||
Treasury bills issued as substitution | |||||
for debt instruments 3 | 20 727 050 | 87 095 659 | 20 727 050 | 25 336 191 | |
Capitalisation treasury bills 4 | 19 574 560 | 64 085 225 | 19 574 560 | 18 642 439 | |
16 762 999 294 | 8 285 750 617 | 16 762 999 294 | 2 410 330 922 | ||
Maturity within 1 year | 6 557 233 000 | 8 113 898 881 | 6 557 233 000 | 2 360 339 126 | |
Maturity after 1 year | 10 205 766 294 | 171 851 736 | 10 205 766 294 | 49 991 796 | 0143 |
16 762 999 294 | 8 285 750 617 | 16 762 999 294 | 2 410 330 922 | ||
ZBFH | |||||
NOTES TO CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS (Continued)
3. TREASURY BILLS (continued)
-
The Group invested in treasury bills issued by the RBZ over a period ranging from 3 months to 9 months (2021: 3 months to 24
months) and were at rates ranging from 8% to 92% (2021: 5% to 21%). - The Group purchased treasury bills from the secondary market. These treasury bills have coupon rates ranging from 0% to 5% (2021: 5% to 15%) with maturity periods ranging from 2 to 10 years (2021: 1 month to 3 years).
- 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 4 to 10 years (2021: 3.5 months to 10 years).
- 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 were then used to recapitalise ZB Bank Limited, a 100% owned subsidiary of ZBFH. The CTBs mature on 26 May 2025 and carry a coupon of 1% which is payable on maturity. The CTBs are carried at amortised cost, with 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 market rate in the absence of free market trade on similar instruments.
-
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 an average yield market rate on the contractual cash flows in order to determine the fair value of the treasury bills.
Treasury bills purchased from the secondary market value were fair valued using TBs average yield market rate of 68%.
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. - 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. In addition, the Government of Zimbabwe has a strong capacity to meet its contractual cashflow obligations in the near term and an adverse in the economics and business conditions in the longer term may, but will not necessarily reduce the Government of Zimbabwe's ability to fulfil its obligations. The amount of ECL was insignificant as such no adjustment for impairment was recognized.
4. MORTGAGES AND OTHER ADVANCES
Inflation adjusted | Unaudited Historical cost | |||
31Dec 2022 | 31 Dec 2021 | 31 Dec 2022 | 31 Dec 2021 | |
ZW$ | ZW$ | ZW$ | ZW$ | |
NOTES TO CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS (Continued)
Inflation adjusted | Unaudited Historical cost | |||
31 Dec 2022 | 31 Dec 2021 | 31 Dec 2022 | 31 Dec 2021 | |
ZW$ | ZW$ | ZW$ | ZW$ | |
6. RIGHT OF USE ASSETS | ||||
Balance at the beginning of year | 760 927 541 | 365 976 243 | 102 568 596 | 66 234 057 |
Depreciation | (118 693 024) | (253 012 034) | (79 470 830) | (57 037 263) |
Lease modifications | 635 233 597 | 414 188 693 | 349 779 923 | 93 371 802 |
Effects of inflation adjustment | 320 526 075 | 233 774 639 | - | - |
Balance at end of year | 1 597 994 189 | 760 927 541 | 372 877 689 | 102 568 596 |
7. PROPERTY AND EQUIPMENT
Inflation adjusted | |||||||
Equipment | Marine assets | ||||||
Freehold | Leasehold | furniture | Computer | and motor Capital work | |||
properties | improvements | & fittings | equipment | vehicles | in progress | Total | |
31 December 2022 | ZW$ | ZW$ | ZW$ | ZW$ | ZW$ | ZW$ | ZW$ |
GROUP | |||||||
Cost or valuation | |||||||
Balance at 1 January 2022 | 14 016 734 674 | 6 554 036 902 | 11 837 733 569 | 14 607 916 458 | 3 288 722 331 | 216 901 552 | 50 522 045 486 |
Additions | - | 134 045 175 | 880 485 720 | 690 356 208 | 873 723 438 | 2 066 936 130 | 4 645 546 671 |
Disposals | - | - | (81 637 727) | (44 130 826) | (20 303 028) | - | (146 071 581) |
Transfer between categories | - | 1 610 406 684 | 169 666 466 | - | - (1 780 073 150) | - | |
Surplus on revaluation | 8 874 407 170 | 568 184 | 389 169 237 | 6 356 129 275 | 469 178 735 | - | 16 089 452 601 |
Arising from acquisition of subsidiary | 3 964 300 000 | - | 56 954 205 | - | 143 695 953 | - | 4 164 950 158 |
Balance at 31 December 2022 | 26 855 441 844 | 8 299 056 945 | 13 252 371 470 | 21 610 271 115 | 4 755 017 429 | 503 764 532 | 75 275 923 335 |
Accumulated depreciation and | |||||||
impairment |
- 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 exposures In respect of Guarantees
In respect of Loan commitments Gross credit exposure
Gross advances
Less: Allowance for loan impairments Net advances - Maturity analysis
On demand Within 1 month Between 1 and 6 months Between 6 and 12 months After 12 months - Non-performingloans
Included in the above are the following; Non-performing loans
Less: Allowance for loan impairments Value to be received from security held
2 188 959 388 | 1 118 331 324 | 2 188 959 388 | 325 323 401 |
62 053 477 361 | 36 572 731 961 | 62 053 477 361 | 10 639 034 509 |
2 715 035 334 | 4 646 584 656 | 2 715 035 334 | 1 351 694 879 |
138 277 282 | 1 394 263 249 | 138 277 282 | 405 592 200 |
2 118 559 956 | 760 756 222 | 2 118 559 956 | 221 304 542 |
67 025 349 933 | 43 374 336 088 | 67 025 349 933 | 12 617 626 130 |
69 214 309 321 | 44 492 667 412 | 69 214 309 321 | 12 942 949 531 |
3 133 776 126 | 2 849 843 046 | 3 133 776 126 | 829 021 429 |
6 864 150 030 | 2 504 910 185 | 6 864 150 030 | 728 680 207 |
79 212 235 477 | 49 847 420 643 | 79 212 235 477 | 14 500 651 167 |
69 214 309 321 | 44 492 667 412 | 69 214 309 321 | 12 942 949 531 |
(4 344 604 579) | (2 440 805 534) | (4 344 604 579) | (710 032 117) |
64 869 704 742 | 42 051 861 878 | 64 869 704 742 | 12 232 917 414 |
3 314 940 341 | 3 402 502 112 | 3 314 940 341 | 989 790 356 |
1 628 466 895 | 2 040 929 754 | 1 628 466 895 | 593 707 960 |
14 242 664 848 | 4 718 896 323 | 14 242 664 848 | 1 372 730 396 |
22 350 972 921 | 8 813 055 900 | 22 350 972 921 | 2 563 724 415 |
37 675 190 472 | 30 872 036 554 | 37 675 190 472 | 8 980 698 040 |
79 212 235 477 | 49 847 420 643 | 79 212 235 477 | 14 500 651 167 |
230 172 094 | 1 716 654 221 | 230 172 094 | 499 375 970 |
(75 028 348) | (1 606 755 560) | (75 028 348) | (467 406 369) |
155 143 746 | 109 898 661 | 155 143 746 | 31 969 601 |
Balance at 1 January 2022 | 2 221 752 224 | 6 156 031 703 | 3 500 765 615 | 4 197 060 470 | 2 026 056 652 | 185 967 772 | 18 287 634 436 |
Recognised in statement of profit | |||||||
or loss | 806 941 509 | 65 565 561 | 409 411 700 | 1 461 840 683 | 221 690 082 | - | 2 965 449 535 |
Disposals | - | - | (2 311 805) | (1 973 136) | (6 201 373) | - | (10 486 314) |
Impairment | - | 327 169 459 | 4 209 628 864 | 12 799 377 | 30 603 884 | 114 075 979 | 4 694 277 563 |
Balance at 31 December 2022 | 3 028 693 733 | 6 548 766 723 | 8 117 494 374 | 5 669 727 394 | 2 272 149 245 | 300 043 751 | 25 936 875 220 |
Carrying value at 31 December 2022 | 23 826 748 111 | 1 750 290 222 | 5 134 877 096 | 15 940 543 721 | 2 482 868 184 | 203 720 781 | 49 339 048 115 |
Carrying value at 31 December 2021 | 11 794 982 450 | 398 005 199 | 8 336 967 954 | 10 410 855 988 | 1 262 665 679 | 30 933 780 | 32 234 411 050 |
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 | 10 618 156 093 | 2 470 792 031 | 3 330 282 211 | 7 150 745 461 | 2 913 823 789 | 496 893 618 | 26 980 693 203 |
Additions | - | 37 322 845 | 162 360 148 | 241 371 592 | 137 503 951 | 79 730 789 | 658 289 325 |
Disposals | - | - | (10 620 716) | (7 161 787) | (38 640 771) | - | (56 423 274) |
Transfer between categories | - | 233 383 816 | 81 135 303 | 371 085 061 | - | (685 604 180) | - |
Reclassication to investment properties | (317 534 003) | - | - | - | - | - | (317 534 003) |
Surplus on revaluation | 3 716 112 584 | 3 812 538 210 | 8 274 576 623 | 6 851 876 131 | 276 035 362 | - | 22 931 138 910 |
Reclassification to intangibles | - | - | - | - | - | 325 881 325 | 325 881 325 |
Balance at 31 December 2021 | 14 016 734 674 | 6 554 036 902 | 11 837 733 569 | 14 607 916 458 | 3 288 722 331 | 216 901 552 | 50 522 045 486 |
Accumulated depreciation and | |||||||
impairment | |||||||
Balance at 1 January 2021 | 1 899 423 448 | 2 072 555 505 | 1 448 534 882 | 3 206 499 048 | 1 860 049 054 | 185 967 772 | 10 673 029 709 |
Recognised in statement of profit | |||||||
or loss | 382 275 043 | 4 079 483 815 | 2 051 087 343 | 991 938 871 | 169 943 154 | - | 7 674 728 226 |
Disposals | - | - | (876 213) | (1 377 449) | (5 621 681) | - | (7 875 343) |
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. The internally discounted value of the security held in respect of the non-performing book amounted to ZW$5 432 212 657 as at 31 December 2022 (2021: ZW$29 259 743).
Inflation adjusted | Unaudited Historical cost | ||||||||
31 Dec 2022 | As a % of | 31 Dec 2021 | As a % of | 31 Dec 2022 | As a % of | 31 Dec 2021 | As a % of | ||
ZW$ | Total | ZW$ | Total | ZW$ | Total | ZW$ | Total | ||
4.4 Sectorial analysis | |||||||||
Gross advances: | |||||||||
Private | 19 951 358 928 | 25% | 21 761 884 455 | 44% | 19 951 358 928 | 25% | 6 330 548 124 | 44% | |
Agriculture | 3 106 261 211 | 4% | 4 068 731 909 | 8% | 3 106 261 211 | 4% | 1 183 597 092 | 8% | |
Mining | 11 447 874 838 | 14% | 1 645 856 177 | 3% | 11 447 874 838 | 14% | 478 780 767 | 3% | |
Manufacturing | 2 277 476 131 | 3% | 778 313 486 | 2% | 2 277 476 131 | 3% | 226 411 963 | 2% | |
Distribution | 6 300 355 711 | 8% | 2 458 713 712 | 5% | 6 300 355 711 | 8% | 715 241 619 | 5% | |
Construction | 255 906 600 | 0% | 84 381 689 | 0% | 255 906 600 | 0% | 24 546 695 | 0% | |
Transport | 3 717 944 871 | 5% | 1 557 193 484 | 3% | 3 717 944 871 | 5% | 452 988 725 | 3% | |
Services | 16 154 281 558 | 20% | 9 734 789 883 | 20% | 16 154 281 558 | 20% | 2 831 857 506 | 20% | |
Financial | 5 994 842 920 | 8% | 2 230 130 378 | 4% | 5 994 842 920 | 8% | 648 746 560 | 4% | |
Communication | 8 006 551 | 0% | 172 672 239 | 0% | 8 006 551 | 0% | 50 230 480 | 0% | |
Total gross advances | 69 214 309 321 | 87% | 44 492 667 412 | 89% | 69 214 309 321 | 87% | 12 942 949 531 | 89% | |
Guarantees: | |||||||||
Manufacturing | 3 045 948 099 | 3.8% | 2 703 272 638 | 6% | 3 045 948 099 | 4% | 786 383 990 | 6% | |
Distribution | 41 020 464 | 0.05% | 114 101 074 | 0% | 41 020 464 | 0% | 33 192 086 | 0% | |
Construction | - | 0% | 3 231 343 | 0% | - | 0% | 940 000 | 0% | |
Services | 46 807 563 | 0.06% | 29 237 991 | 0% | 46 807 563 | 0% | 8 505 353 | 0% | |
Total guarantees | 3 133 776 126 | 4% | 2 849 843 046 | 6% | 3 133 776 126 | 4% | 829 021 429 | 6% | |
Loan commitments: | |||||||||
Agriculture | 1 184 716 731 | 1% | 1 014 993 182 | 2% | 1 184 716 731 | 1% | 295 262 260 | 2% | |
Mining | 43 766 562 | 0% | 4 966 849 | 0% | 43 766 562 | 0% | 1 444 860 | 0% | |
Manufacturing | 1 234 835 807 | 2% | 298 916 260 | 1% | 1 234 835 807 | 2% | 86 954 959 | 1% | |
Distribution | 578 852 049 | 1% | 391 688 643 | 1% | 578 852 049 | 1% | 113 942 513 | 1% | |
Construction | 6 396 893 | 0% | 18 352 037 | 0% | 6 396 893 | 0% | 5 338 621 | 0% | |
Transport | 1 200 847 525 | 2% | 189 627 818 | 0% | 1 200 847 525 | 2% | 55 162 871 | 0% | |
Communication | 40 649 141 | 0% | - | 0% | 40 649 141 | 0% | - | 0% | |
Services | 2 568 063 257 | 3% | 469 519 241 | 1% | 2 568 063 257 | 3% | 136 583 490 | 1% | |
Financial Services | 6 022 065 | 0% | 116 846 155 | 0% | 6 022 065 | 0% | 33 990 633 | 0% | |
Total loan commitments | 6 864 150 030 | 9% | 2 504 910 185 | 5% | 6 864 150 030 | 9% | 728 680 207 | 5% |
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 | Unaudited Historical cost | |||
31 Dec 2022 | 31 Dec 2021 | 31 Dec 2022 | 31 Dec 2021 | |
ZW$ | ZW$ | ZW$ | ZW$ |
Impairment | - | 3 992 383 | 2 019 603 | - | 1 686 125 | - | 7 698 111 | ||
Reclassication to investment properties | (59 946 267) | - | - | - | - | - | (59 946 267) | ||
Balance at 31 December 2021 | 2 221 752 224 | 6 156 031 703 | 3 500 765 615 | 4 197 060 470 | 2 026 056 652 | 185 967 772 | 18 287 634 436 | ||
Carrying value at 31 December 2021 | 11 794 982 450 | 398 005 199 | 8 336 967 954 | 10 410 855 988 | 1 262 665 679 | 30 933 780 | 32 234 411 050 | ||
Carrying value at 31 December 2020 | 8 718 732 645 | 398 236 526 | 1 881 747 329 | 3 944 246 414 | 1 053 774 735 | 310 925 844 | 16 307 663 493 | ||
Unaudited Historical cost | |||||||||
Equipment | Marine assets | ||||||||
Freehold | Leasehold | furniture | Computer | and motor Capital work | |||||
properties | improvements | & fittings | equipment | vehicles | in progress | Total | |||
31 December 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 | - | 132 444 024 | 740 378 668 | 476 705 577 | 673 251 755 | 1 900 384 360 | 3 923 164 384 | ||
Disposals | - | - | (45 103 381) | (17 777 453) | (11 656 215) | - | (74 537 049) | ||
Transfer between categories | - | 1 547 392 301 | 167 021 842 | - | - (1 714 414 143) | - | |||
Surplus on revaluation | 16 974 163 057 | - | 2 045 117 085 | 13 415 009 849 | 1 436 619 785 | - | 33 870 909 776 | ||
Arising from acquisition of subsidiary | 3 964 300 000 | - | 23 433 504 | - | 4 916 951 | - | 3 992 650 455 | ||
Balance at 31 December 2022 | 24 495 127 067 | 1 786 688 937 | 5 390 323 055 | 17 174 389 036 | 2 537 935 521 | 250 626 907 | 51 635 090 523 | ||
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 | 542 884 058 | 45 763 660 | 236 006 845 | 960 965 756 | 128 240 137 | - | 1 913 860 456 | ||
Disposals | - | (19 906) | (2 312 303) | (9 756 077) | (3 231 946) | - | (15 320 232) | ||
Impairment | - | - | 20 417 035 | - | - | - | 20 417 035 | ||
Balance at 31 December 2022 | 668 379 069 | 76 785 576 | 303 555 327 | 1 226 387 798 | 193 234 361 | - | 2 468 342 131 | ||
Carrying value at 31 December 2022 | 23 826 747 998 | 1 709 903 361 | 5 086 767 728 | 15 948 001 238 | 2 344 701 160 | 250 626 907 | 49 166 748 392 | ||
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$ |
Gross investment in finance leases:
Maturing within 1 year
Maturing after 1 year
Gross investment in finance leases
Unearned finance charges
Net investment in finance leases
Maturing within 1 year
Maturing after 1 year
5. INVESTMENT PROPERTIES
Made up as follows:
Land stock held for capital appreciation
and completed properties available for lease: Residential
Commercial Industrial
Balance at end of year
Reconciliation of carrying amount
Balance at beginning of year Additions
Transfer to / (from) owner occupied Arising from acquisition of subsidiary Fair value adjustment
Balance at end of year
1 433 065 020 | 5 244 166 974 | 1 433 065 020 | 1 525 532 013 |
9 660 162 816 | 7 052 084 584 | 9 660 162 816 | 2 051 456 570 |
11 093 227 836 | 12 296 251 558 | 11 093 227 836 | 3 576 988 583 |
(8 378 192 502) | (7 649 666 905) | (8 378 192 502) | (2 225 293 704) |
2 715 035 334 | 4 646 584 653 | 2 715 035 334 | 1 351 694 879 |
427 547 783 | 2 134 672 305 | 427 547 783 | 620 977 737 |
2 287 487 551 | 2 511 912 348 | 2 287 487 551 | 730 717 142 |
2 715 035 334 | 4 646 584 653 | 2 715 035 334 | 1 351 694 879 |
7 591 318 166 | 1 232 598 171 | 7 591 318 166 | 358 563 710 |
84 241 370 016 | 13 678 225 068 | 84 241 370 016 | 3 979 005 689 |
2 358 079 661 | 382 880 101 | 2 358 079 661 | 111 380 102 |
94 190 767 843 | 15 293 703 340 | 94 190 767 843 | 4 448 949 501 |
15 293 703 340 | 12 034 525 807 | 4 448 949 501 | 2 177 997 851 |
36 127 790 | 375 364 167 | 33 074 760 | 87 984 925 |
(3 964 300 000) | 257 587 729 | (3 964 300 000) | 46 618 000 |
66 865 248 000 | - 66 865 248 000 | - | |
15 959 988 713 | 2 626 225 637 | 26 807 795 582 | 2 136 348 725 |
94 190 767 843 | 15 293 703 340 | 94 190 767 843 | 4 448 949 501 |
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 from 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 0143
4
NOTES TO CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS (Continued)
8. INTANGIBLE ASSETS
Inflation adjusted | Unaudited Historical cost | ||
31 Dec 2022 | 31 Dec 2021 | 31 Dec 2022 | 31 Dec 2021 |
ZW$ | ZW$ | ZW$ | ZW$ |
NOTES TO CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS (Continued)
12.3 ACQUISITION OF A SUBSIDIARY
12.3.5 Bargain purchase
Bargain purchase arising from the acquisition has been recognised as follows:-
Computer software
Carrying amount at beginning of year Additions at cost
Reversal of cancelled projects Amortisation Reclassification to equipment Impairment
Balance at end of year
9. DEPOSITS AND OTHER ACCOUNTS
-
Summary of deposits by type
Balances of banks Current accounts Savings and call accounts Fixed deposits - Maturity analysis
On demand Within 1 month Between 1 and 6 months Between 6 and 12 months After 12 months
695 956 323 | 1 194 610 537 | 22 206 622 | 28 389 024 |
1 087 133 944 | 37 715 405 | 691 561 685 | 10 358 475 |
- | (35 577 734) | - | (1 385 883) |
(213 755 015) | (174 910 560) | (8 171 322) | (1 644 934) |
- | (325 881 325) | - | (13 510 060) |
(102 802 673) | - | (2 192 314) | - |
1 466 532 579 | 695 956 323 | 703 404 671 | 22 206 622 |
3 922 054 654 | 1 683 427 552 | 3 922 054 654 | 489 710 308 |
15 857 450 583 | 18 086 823 989 | 15 857 450 583 | 5 261 470 343 |
80 441 208 461 | 38 928 723 005 | 80 441 208 461 | 11 324 394 029 |
8 989 549 137 | 8 917 524 295 | 8 989 549 137 | 2 594 114 348 |
109 210 262 835 | 67 616 498 841 | 109 210 262 835 | 19 669 689 027 |
97 956 090 356 | 47 366 915 683 | 97 956 090 356 | 13 779 070 458 |
3 054 318 231 | 18 597 089 559 | 3 054 318 231 | 5 409 906 971 |
8 032 735 138 | 551 302 294 | 8 032 735 138 | 160 374 241 |
150 149 071 | 1 020 622 367 | 150 149 071 | 296 899 794 |
16 970 040 | 80 568 938 | 16 970 040 | 23 437 563 |
109 210 262 835 | 67 616 498 841 | 109 210 262 835 | 19 669 689 027 |
Inflation adjusted | Unaudited Historical cost | ||||
31 Dec 2022 | 31 Dec 2021 | 31 Dec 2022 | 31 Dec 2021 | ||
ZW$ | ZW$ | ZW$ | ZW$ | ||
Consideration transferred | 3 602 565 002 | - | 3 446 947 365 | - | |
NCI based on their proportionate interest in | |||||
the recognized amounts of the assets and | |||||
liabilities of Mash | 40 525 999 485 | - | 40 487 036 675 | - | |
Fair value of pre-existing interest in Mash | 13 790 206 487 | - | 13 776 948 203 | - | |
Fair value of identifiable net assets | (66 239 275 575) | - | (66 175 591 314) | - | |
Bargain purchase | (8 320 504 601) | - | (8 464 659 071) | - |
Bargain purchase arose as a result of the Group acquiring shares in Mash at market price that was below the fair value of the identifiable net assets value of Mash.
12.3.6 Non-controlling interests.
The Group has elected to measure the non-controlling interest (NCI) based on their proportionate interest of Mash's net identifiable assets as recognised by the Group, which amounted to ZW$40 525 999 485 (unaudited historical cost: ZW$40 487 036 675).
12.3.7 Acquired receivables
Included in trade and other receivables are trade receivables stated at fair value of ZW$681 647 987. The gross contractual amount for the trade receivables was ZW$681 647 987 and expected to be collectible.
Inflation adjusted | Unaudited Historical cost | ||||||||
31 Dec 2022 | % | 31 Dec 2021 | % | 31 Dec 2022 | % | 31 Dec 2021 | % | ||
ZW$ | Contribution | ZW$ Contribution | ZW$ Contribution | ZW$ Contribution | |||||
9.3 Deposit concentration | |||||||||
Private individuals | 18 658 986 903 | 17% | 10 849 147 705 | 16% | 18 658 986 903 | 17% | 3 156 025 012 | 16% | |
Agriculture | 5 880 137 408 | 5% | 3 559 026 936 | 5% | 5 880 137 408 | 5% | 1 035 323 542 | 5% | |
Mining | 2 450 824 504 | 2% | 681 453 716 | 1% | 2 450 824 504 | 2% | 198 235 385 | 1% | |
Manufacturing | 5 911 603 684 | 5% | 2 938 053 247 | 4% | 5 911 603 684 | 5% | 854 681 841 | 4% | |
Distribution | 3 926 237 835 | 4% | 1 927 501 432 | 3% | 3 926 237 835 | 4% | 560 711 578 | 3% | |
Construction | 1 284 960 325 | 1% | 852 321 302 | 1% | 1 284 960 325 | 1% | 247 940 891 | 1% | |
Transport | 585 086 764 | 1% | 1 035 140 265 | 2% | 585 086 764 | 1% | 301 123 061 | 2% | |
Services | 48 439 090 709 | 44% | 28 934 042 373 | 43% | 48 439 090 709 | 44% | 8 416 934 114 | 43% | |
Financial | 13 349 374 649 | 12% | 8 393 501 673 | 12% | 13 349 374 649 | 12% | 2 441 675 783 | 12% | |
Communication | 8 723 960 054 | 8% | 8 446 310 192 | 12% | 8 723 960 054 | 8% | 2 457 037 820 | 12% | |
109 210 262 835 | 100% | 67 616 498 841 | 100% | 109 210 262 835 | 100% | 19 669 689 027 | 100% | ||
Inflation adjusted | Unaudited Historical cost | ||||
31 Dec 2022 | 31 Dec 2021 | 31 Dec 2022 | 31 Dec 2021 | ||
ZW$ | ZW$ | ZW$ | ZW$ | ||
9.4 Secured and unsecured deposits analysis | |||||
Secured deposits | - | - | - | - | |
Unsecured deposits | 109 210 262 835 | 67 616 498 841 | 109 210 262 835 | 19 669 689 027 | |
10. LEASE LIABILITIES | |||||
Balance at the beginning of year | 411 437 741 | 384 450 727 | 119 687 540 | 69 577 553 | |
Add finance cost posted to profit or loss | 409 713 988 | 236 909 950 | 309 586 388 | 19 538 243 | |
Exchange gains | (2 138 786 358) | (151 859 862) | 690 680 746 | 31 108 045 | |
Less lease liability payments during the year | (574 353 952) | (308 915 884) | (384 558 281) | (69 639 836) | |
Lease modifications | (4 245 979 728) | 284 000 251 | 86 737 877 | 69 103 535 | |
Effects of inflation adjustment | 6 960 102 579 | (33 147 441) | - | - | |
Balance at end of year | 822 134 270 | 411 437 741 | 822 134 270 | 119 687 540 | |
Maturing within 1 year | 164 426 854 | 82 287 548 | 164 426 854 | 23 937 508 | |
Maturing after 1 year | 1 067 421 404 | 329 150 193 | 1 067 421 404 | 95 750 032 | |
Total | 1 231 848 258 | 411 437 741 | 1 231 848 258 | 119 687 540 | |
11. LONG TERM BORROWINGS | |||||
Comprising of: | |||||
Face value of loan | 20 000 000 | 68 751 975 | 20 000 000 | 20 000 000 | |
Valuation discount | (2 204 945) | (10 492 682) | (2 204 945) | (3 052 329) | |
Balance at end of year | 17 795 055 | 58 259 293 | 17 795 055 | 16 947 671 | |
Valuation discount: | |||||
Balance at beginning of the year | 10 492 682 | 21 324 896 | 3 052 329 | 3 859 361 | |
Amortisation during the year | (1 265 604) | (3 579 919) | (847 384) | (807 032) | |
Effects of inflation adjustment | (7 022 133) | (7 252 295) | - | - | |
Balance at end of year | 2 204 945 | 10 492 682 | 2 204 945 | 3 052 329 |
12. ACQUISITION OF A SUBSIDIARY
On 31 December 2022, the Group acquired 18.01% of the shares and voting interests in Mashonaland Holdings Limited (Mash) through the acquisition of shares from other shareholders. As a result, the Group's equity interest in Mash increased from 32.58% to 50.59%, granting it control of Mash and subsequently, became a subsidiary of the Group.
The principal activities of Mash are property research & development and management.
12.3.1 Consideration transferred
Total consideration transferred was cash amounting to ZW$3 602 565 002 (unaudited historical cost: ZW$ 3 446 947 365).
12.3.2 Acquisition-related costs
Acquisition-related costs were not material and charged to profit or loss.
12.3.3 Revenue and Profit contribution
The revenue and profit contribution from the new acquisition were immaterial.
Had the acquired business been consolidated from 1 January 2022, the Group's consolidated revenue and consolidated profit for the year ended 31 December 2022 would have been ZW$22 420 980 875 (unaudited historical cost: ZW$57 586 912 255) and ZW$17 245 756 852 (unaudited historical cost: ZW$20 073 925 697) respectively.
12.3.4 Identifiable assets acquired and liabilities assumed
The following table summarises the recognized amounts of acquired assets and liabilities assumed at the date of acquisition.
Inflation adjusted | Unaudited Historical cost | |||
31 Dec 2022 | 31 Dec 2021 | 31 Dec 2022 | 31 Dec 2021 | |
ZW$ | ZW$ | ZW$ | ZW$ | |
Total identifiable assets acquired | ||||
Cash and cash equivalent | 4 103 662 573 | - | 4 103 662 573 | - |
Financial assets held at fair value | ||||
through profit or loss | 527 553 502 | - | 527 553 502 | - |
Trade and other receivables | 1 552 821 095 | - | 1 428 258 932 | - |
Investment properties | 66 865 248 000 | - | 66 865 248 000 | - |
Property and equipment | 200 650 158 | - | 28 350 455 | - |
Total assets | 73 249 935 328 | - | 72 953 073 462 | - |
Inflation adjusted | Unaudited Historical cost | ||||
31 Dec 2022 | 31 Dec 2021 | 31 Dec 2022 | 31 Dec 2021 | ||
ZW$ | ZW$ | ZW$ | ZW$ | ||
13. INTEREST AND RELATED INCOME | |||||
Interest income comprises interest on: | |||||
Advances | 20 755 097 945 | 10 517 323 666 | 15 062 846 497 | 2 559 285 218 | |
Mortgages | 564 018 510 | 594 527 462 | 392 141 847 | 73 661 917 | |
Overdraft accounts | 2 398 076 860 | 1 147 698 840 | 1 882 432 643 | 266 097 023 | |
Financial assets at amortised cost | 70 555 869 | 242 542 769 | 57 834 549 | 57 834 549 | |
Treasury bill at FVTPL | 233 552 422 | 802 859 519 | 193 316 382 | 193 316 382 | |
Treasury bills at FVTOCI | 43 058 475 | 148 017 761 | 33 368 088 | 33 368 088 | |
Cash and short-term funds | 272 186 636 | 37 028 308 | 212 470 826 | 7 058 565 | |
Loans to other banks | 218 663 825 | - | 155 262 740 | 60 274 | |
Other | 1 000 352 194 | 84 604 310 | 1 081 920 066 | 18 313 571 | |
Total interest income | 25 555 562 736 | 13 574 602 635 | 19 071 593 638 | 3 208 995 587 | |
14. INTEREST AND RELATED EXPENSE | |||||
Interest expenses comprise interest on: | |||||
Retail deposits | 132 435 404 | 162 310 117 | 74 310 602 | 37 804 747 | |
Fixed deposits | 3 310 470 821 | 1 414 874 451 | 2 345 098 711 | 340 754 046 | |
Finance cost on operating lease liabilities | 409 713 988 | 236 909 950 | 309 586 388 | 19 538 243 | |
Other interest payable categories | 1 653 434 330 | 401 270 479 | 1 301 168 784 | 129 041 445 | |
Total interest expenses | 5 506 054 543 | 2 215 364 997 | 4 030 164 485 | 527 138 481 | |
Net interest income | 20 049 508 193 | 11 359 237 638 | 15 041 429 153 | 2 681 857 106 | |
15. LOAN IMPAIRMENTS | |||||
Loans and advances | (6 630 862 791) | (156 108 091) | (4 872 123 095) | (446 763 806) | |
Insurance debtors | (258 550 590) | 30 243 898 | (146 359 328) | 8 797 972 | |
Loans and other advances | (6 889 413 381) | (125 864 193) | (5 018 482 423) | (437 965 834) | |
Other financial assets | (24 177 119) | (1 881 629 784) | 6 523 746 | (11 578 240) | |
Guarantees | (349 434 489) | (131 205 840) | (276 864 188) | (37 445 505) | |
Loan commitments | (48 049 379) | (5 351 661) | (24 546 942) | (957 780) | |
Net recoveries against loans | |||||
previously written off | 276 281 492 | 8 358 800 | 234 068 861 | 1 901 320 | |
(7 034 792 876) | (2 135 692 678) | (5 079 300 946) | (486 046 039) | ||
16. OPERATING EXPENSES | |||||
Commission and fees | 623 056 588 | 428 053 065 | 434 980 446 | 111 626 169 | |
Staff expenses | 20 971 396 356 | 9 707 622 339 | 16 017 723 437 | 2 352 515 911 | |
Communication expenses | 673 675 160 | 691 238 648 | 508 782 146 | 164 115 525 | |
National Social Security Authority expenses | 222 877 728 | 70 337 258 | 167 823 949 | 16 843 785 | |
Pension fund expenses | 549 450 372 | 291 276 799 | 395 456 825 | 68 713 153 | |
Computers and information | |||||
technology expenses | 3 951 373 759 | 2 774 421 565 | 2 513 113 652 | 499 736 091 | |
Occupation expenses | 1 352 617 997 | 815 758 032 | 866 960 037 | 176 885 656 | |
Transport expenses | 488 639 405 | 188 167 003 | 352 583 329 | 41 540 688 | |
Travelling expenses | 557 151 751 | 248 820 195 | 426 878 502 | 60 272 419 | |
Depreciation of property and equipment | 2 965 449 535 | 7 674 728 226 | 1 913 860 456 | 405 813 279 | |
Amortisation of intangible assets | 213 755 015 | 174 910 560 | 8 171 322 | 1 644 934 | |
Depreciation of right of use asset | 118 693 024 | 253 012 034 | 79 470 830 | 57 037 263 | |
Impairment of property and equipment | 4 694 277 563 | 7 698 111 | 12 487 605 | 39 608 | |
Impairment of intangible assets | 102 802 673 | - | 2 192 314 | - | |
Administration expenses | 2 070 049 732 | 4 018 490 566 | 5 480 399 017 | 1 281 530 852 | |
Amortisation of valuation discount | |||||
on the long term borrowings | (1 265 604) | (3 579 919) | (847 384) | (807 032) | |
Directors fees | 430 888 902 | 313 464 756 | 330 943 316 | 73 617 572 | |
Auditors' remuneration | 722 692 330 | 271 011 401 | 473 617 064 | 59 321 828 | |
40 707 582 286 | 27 925 430 639 | 29 984 596 863 | 5 370 447 701 | ||
17. INCOME TAX EXPENSE | |||||
Current income tax | 3 162 688 581 | 2 754 379 873 | 3 153 231 923 | 800 027 822 | |
Deferred tax expense/(credit) | (2 170 606 855) | (1 090 884 858) | 482 622 291 | 483 108 710 | |
Discountinued operations | - | (5 036 636) | - | (853 510) | |
992 081 726 | 1 658 458 379 | 3 635 854 214 | 1 282 283 022 |
18. EARNINGS PER SHARE |
Total liabilities assumed
Trade and other receivables
Current tax liabilities
Deferred tax liabilities
Long term borrowings
Total liabilities
Total identifiable net assets at acquisition
Less: Non-controlling interests
Less: Fair value of pre-existing interest in Mash
Less: Bargain purchase arising at acquisition
Consideration transferred
Less: Cash and cash equivalents in subsidiary acquired
Cash inflow on acquisition
1 582 840 233 | - | 1 458 070 983 | - |
84 078 769 | - | 84 078 769 | - |
3 274 411 747 | - | 3 166 003 392 | - |
2 069 329 004 | - | 2 069 329 004 | - |
7 010 659 753 | - | 6 777 482 148 | - |
66 239 275 575 | - 66 175 591 314 | - | |
(40 525 999 485) | - (40 487 036 675) | - | |
(13 790 206 487) | - (13 776 948 203) | - | |
(8 320 504 601) | - | (8 464 659 071) | - |
3 602 565 002 | - | 3 446 947 365 | - |
(4 103 662 573) | - | (4 103 662 573) | - |
(501 097 571) | - | (656 715 208) | - |
Basic earnings per share (ZW cents) |
The inflation adjusted calculation of basic earnings per share for the year ended 31 December 2022 of ZW18 672 cents |
(2021: ZW3 336 cents) is based on the attributable profit after tax of ZW$29 412 466 242 (2021: ZW$5 254 516 620) |
and weighted average number of shares of 157 522 902 (2021:157 522 902). |
The unaudited historical cost calculation of basic earnings per share for the year ended 31 December 2022 of ZW32 |
933 cents (2021:ZW3 142 cents) is based on the attributable profit after tax of ZW$51 877 535 187 (2021:ZW$4 949 |
147 878) and weighted average number of shares of 157 522 902 (2021:157 522 902). |
There were no dilutive instruments for the year. |
ZBFH 0143
5
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ZB Financial Holdings Ltd. published this content on 21 April 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 April 2023 06:49:01 UTC.