CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
In millions of Malawi Kwacha
GROUP COMPANY
Unaudited Unaudited Audited Una...
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FMB Malawi HY 2013 financial results

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FMB Malawi Listed on the Malawi Stock Exchange has released its Half Year Results. Check out
insights into this company in their results which appears below.
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FMB Malawi HY 2013 financial results

  1. 1. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME In millions of Malawi Kwacha GROUP COMPANY Unaudited Unaudited Audited Unaudited Unaudited Audited 30-Jun-13 30-Jun-12 31-Dec-12 30-Jun-13 30-Jun-12 31-Dec-12 INCOME Interest Income 5 106 2 360 5 800 4 039 1 698 4 423 Interest Paid (1 530) (574) (1 498) (803) (319) (868) Net interest income 3 576 1 786 4 302 3 236 1 379 3 555 Non Interest Income 4 063 2 181 4 696 4 031 2 431 4 936 Total Operating Income 7 639 3 967 8 998 7 267 3 810 8 491 EXPENDITURE Total Operating Expenditure (2 641) (1 674) (4 171) (2 533) (1 571) (3 954) Profit Before Impairment Losses 4 998 2 294 4 827 4 734 2 239 4 537 Impairment Losses (322) (206) (447) (244) (161) (303) Operating Profit 4 676 2 088 4 380 4 490 2 078 4 234 Share of Profit from Associate 96 72 164 - - - Profit Before Income Tax Expense 4 772 2 160 4 544 4 490 2 078 4 234 Income Tax Expense (1 214) (460) (1 128) (1 157) (438) (1 063) Profit for the Period 3 558 1 700 3 416 3 333 1 640 3 171 Other Comprehensive Income for the Period (20) 1 071 1 033 Total Comprehensive Income for the Period 3 558 1 680 4 487 3 333 1 640 4 204 Profit Attributable to: Equity Holders of the Bank 3 558 1 700 3 416 Profit for the Period 3 558 1 700 3 416 Earnings Per Share (tambala) 152 73 146 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION In millions of Malawi Kwacha GROUP COMPANY Unaudited Unaudited Audited Unaudited Unaudited Audited 30-Jun-13 30-Jun-12 31-Dec-12 30-Jun-13 30-Jun-12 31-Dec-12 LIABILITIES AND EQUITY Liabilities Amounts due to Depositors 35 208 32 128 36 390 30 582 28 402 32 388 Other Payables 8 346 7 449 4 527 8 269 7 311 4 380 Total Liabilities 43 544 39 577 40 917 38 851 35 713 36 768 Equity Share Capital 117 117 117 117 117 117 Share Premium 1 565 1 565 1 565 1 565 1 565 1 565 Revaluation Reserve 3 442 2 044 3 443 3 207 1 867 3 207 Loan Loss Reserve 320 50 240 206 17 206 Other Non Distributable Reserves 350 350 350 - - - Retained Earnings 9 637 6 015 6 392 8 505 5 214 5 406 Total Equity 15 431 10 141 12 107 13 600 8 780 10 501 Total Equity and Liabilities 58 985 49 718 53 024 52 451 44 493 47 269 ASSETS Cash and Cash Equivalents 13 374 12 355 15 963 12 677 11 239 15 594 Money Market Investments 5 088 3 840 2 878 4 215 3 840 2 675 Equity Investments 2 964 2 452 2 488 2 964 2 452 2 488 Investment in Subsidiaries - - - 76 76 76 Investment in Associate 1 164 967 1 068 904 896 904 Advances and Loans to Customers (net) 21 502 19 708 20 326 21 690 21 346 20 567 Finance Leases 4 954 5 780 5 355 - - - Deferred Tax Asset - 25 - - 25 - Property, Plant and Equipment 4 548 2 704 4 312 4 388 2 627 4 149 Other Receivables 5 391 1 887 634 5 537 1 992 816 Total Assets 58 985 49 718 53 024 52 451 44 493 47 269 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY ATTRIBUTABLE TO PARENT OWNERS In millions of Malawi Kwacha GROUP COMPANY Unaudited Unaudited Audited Unaudited Unaudited Audited 30-Jun-13 30-Jun-12 31-Dec-12 30-Jun-13 30-Jun-12 31-Dec-12 As at the Beginning of the Period 12 107 8 600 9 339 10 501 7 277 7 277 Net Profit for the Period 3 558 1 699 2 678 3 333 1 641 3 171 Other Comprehensive Income - (20) 1 071 - - 1 033 Comp. Income Attributable to Owners 15 665 10 279 13 088 13 834 8 918 11 482 Dividends Paid (234) (138) (981) (234) (138) (981) Balance at the End of the Period 15 431 10 141 12 107 13 600 8 780 10 501 CONSOLIDATED STATEMENTS OF CASH FLOWS In millions of Malawi Kwacha GROUP COMPANY Unaudited Unaudited Audited Unaudited Unaudited Audited 30-Jun-13 30-Jun-12 31-Dec-12 30-Jun-13 30-Jun-12 31-Dec-12 Operating Activities Interest and Fees Received 8 655 4 114 9 906 7 532 3 428 8 510 Interest paid (1 600) (592) (1 463) (818) (312) (833) Cash Paid to Suppliers and Employees (2 344) (2 588) (3 617) (2 232) (1 639) (3 494) 4 711 934 4 825 4 482 1 477 4 183 (Decrease)/Increase in Customer Balances (3 154) (11 178) (972) (4 016) 5 598 7 438 Cash Generated From Operations 1 557 (10 245) 3 854 466 7 075 11 621 Income Taxes Paid (986) (120) (883) (897) (228) (695) Cash Flows From Operating Activities 570 (10 365) 2 971 (431) 6 847 10 926 Investing Activities Acquisition of Property and Equipment (473) - (646) (470) (199) (642) Gross Dividend Received 125 71 70 125 221 220 (Purchases)/Maturities of Money Market Investments (5 902) 8 876 667 (5 233) 934 (325) Sale/(Purchase) of Shares in Listed Companies - (28) (58) - (28) (58) Cash Outflows Applied to Investing Activities (6 251) 8 920 34 (5 578) 928 (805) Financing Activities Proceeds from Subordinated Debt Issuance 3 326 - - 3 326 - - Dividend Paid (234) (138) (981) (234) (138) (981) Cash Flows from Financing Activities 3 092 (138) (981) 3 092 (138) (981) Net Movement in Cash and Cash Equivalents (2 588) (1 583) 2 023 (2 916) 7 637 9 140 Cash and Cash Equivalents at 1st January 15 962 13 939 13 939 15 593 6 453 6 453 Cash and Cash Equivalents at 30th June 13 374 12 355 15 962 12 677 14 090 15 593 Impairment Losses/Non Performing Credit Facilities And Provisions For Losses By Industry In thousands of Malawi Kwacha 30-Jun-13 30-Jun-12 Outstanding Amount Impairment Losses Specific Provision Outstanding Amount Impairment Losses Specific Provision Agriculture 3 445 873 32 054 36 297 2 656 091 9 942 32 923 Manufacturing 5 092 977 3 056 6 633 4 382 383 2 866 12 314 Mining 40 006 27 27 28 830 - 622 Construction 2 973 303 28 189 43 544 3 259 470 4 649 16 351 Energy/Electricity/Gas /Water 41 964 3 314 3 643 209 860 25 771 26 591 Transport & Communication 2 705 348 20 704 25 126 3 190 428 21 230 36 704 Financial Services 2 047 413 21 510 21 510 1 264 438 1 199 1 199 Wholesale and Retail 4 160 741 440 700 458 597 4 587 033 43 733 191 308 Individuals/Households 1 505 408 49 071 141 102 1 005 036 15 941 155 383 Real Estate 92 208 244 361 70 427 371 514 Tourism 552 563 5 523 5 523 622 514 936 6 206 Others 491 057 10 820 18 902 565 269 34 267 15 356 Total 23 148 861 615 212 761 265 21 841 779 160 905 495 471 Credit Concentrations In thousands of Malawi Kwacha Sector of Borrower 30-Jun-13 % of Core Capital 30-Jun-12 % of Core Capital Construction 2 863 481 37% 2 202 299 52% Wholesale and Retail 2 146 493 28% 2 055 539 48% Loans to Directors, Senior Management and Other Related Parties In thousands of Malawi Kwacha 30-Jun-13 30-Jun-12 Corporate Bodies Directly or Indirectly Related to Directors *: Balance at the Beginning of the Period 2 018 774 1 116 183 Loans granted during the half year period 856 492 927 413 Repayments (926 790) (234 589) Balance at the end of the Period 1 948 476 1 809 007 Subsidiary Companies: Balance at the Beginning of the Period - 39 682 Loans granted during the half year period 73 963 960 318 Repayments - (16 062) Balance at the end of the Period 73 963 983 938 Senior Management: Balance at the Beginning of the Period 226 615 162 301 Loans granted during the half year period 185 880 49 818 Repayments (59 220) (46 149) Balance at the end of the Period 353 275 165 970 * There were no loans to Directors in their individual capacities. All loans to bodies directly or indirectly linked to Directors were made on arm’s length commercial terms. Investment In Subsidiaries/Associates Subsidiary Number of Shares ('000) Percentage Holding 30 June 13 (MK'000) 30 Jun 2012 (MK'000) Leasing and Finance Company of Malawi Limited 18 343 100,00% 65 911 65 911 Capital Bank Limited 31 588 38,60% 903 854 895 984 FMB Forex Bureau Limited 10 000 100,00% 10 000 10 000 FMB Pensions Limited 1 000 100,00% - - Deposit Rates 30 June 2013 (MK'000) 30 June 2012 (MK'000) Savings Accounts 13,00% 7,00% Fast Accounts (Balances above K5,000) 8,00% 6,25% Call Accounts 7 day call 9,50% 7,00% 30 day call 13,00% 8,00% Fixed Deposits 1 Month 14,00% 7,50% 2 Months 17,00% 8,00% 3 Months 20,00% 9,00% 6 Months 26,00% 12,00% Above 6 Months Negotiable Negotiable Current Account (Balances above K250,000) 1,00% 0,75% Base Lending Rate 30 June 2013 (MK'000) 30 June 2012 (MK'000) Base Lending Rate (Local Currency Loans) 41,00% 22,75% Maximum Applicable Range (Percentage Points) 55,00 36,75 Base Lending Rate (Foreign Currency Loans) 0,00 0,00 Maximum Applicable Range (Percentage Points) 9,50 9,50 Bank rate 25,00% 21,00% Director’s Remuneration, Bonuses and Management Fees 30 June 2013 (MK'000) 30 June 2012 (MK'000) Director's Remuneration 50 747 24 882 Total Bonuses Paid by licenced Institution ** 165 000 90 000 Management fees - - **Total Bonuses represent an amount accrued during the first half of the year Review of operations Through careful balance sheet management, including curtailment of expansion of our credit portfolio, the bank avoided the need to compete aggressively in a generally illiquid market for high cost deposits yet maintained an acceptable credit deposit ratio of 75%. Included in other assets at period end is approximately K4 billion in connection with the acquisition of the operations of International Commercial Bank in Malawi, Mozambique and Zambia. These entities will be consolidated in the group accounts with effect from 1 July 2013. The group continues to deploy a significant proportion of its asset base in liquid low risk money market investments and cash equivalents totaling some K18.5billion which equates to over 30% of total group assets and more than 50% of customer deposits. Monetary policy remained contractionary throughout the period resulting in higher yields being available on all domestic monetary assets including low risk instruments and this has led to a marked improvement in the overall net interest margin earned by the group. Strong growth was achieved in all categories of non interest income with major contributing factors being increased foreign exchange trading volumes and continuing gains on our equityinvestment portfolio in a firming equity market. Operating expenditure for the period has been contained at a level comparable to that of the last six months of 2012. As a result, our cost to income ratio has been further reduced to 35% for the period under review. The general economic environment remained challenging and the level of impairment provisions against our advances portfolio is prudent though somewhat higher than anticipated. We are, however, confident that our efforts to rehabilitate or recover non performing accounts will see future reversals of provisions made on largely technical grounds. Outlook A declining rate of inflation and improving market liquidity should, assuming no unforeseen external shocks to the economy, lead to an easing of interest rates over the second half of the year. The end of the tobacco marketing season will see reduced availability of foreign exchange from the private sector and it remains to be seen whether the monetary authorities are prepared to deplete official foreign exchange reserves to meet unfulfilled market demand. We, therefore, expect interest margins to narrow and foreign exchange trading volumes to contract somewhat in the second half of the year. However, the market appears to be stabilizing after absorbing the impact of major macroeconomic policy shifts and this presents us with the opportunity for renewed balance sheet growth within our risk tolerance levels. Overall, we anticipate continuing robust group performance in the second half of the year. Dividend The Directors have declared a first interim dividend of MK934.5million or 40 tambala per share (2012: 35 tambala) payable on Friday , 23rd August 2013 to shareholders whose names appear in the register at the close of business on Friday, 16th August 2013. The register will be closed from Monday, 19th August 2013 to Wednesday 21st August 2013 both days inclusive. Dheeraj Dikshit Managing Director Lucas M. Kondowe General Manager - Finance John M. O’Neill Director Your friendly bank Summary of Unaudited Consolidated Results for the 6 months ended 30 June 2013.

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