BancABC preliminary group results for the year ended 31 December 2015

1. Consolidated statement of financial position
as at 31 December
BWP‘000s 2015 2014
ASSETS
Cash and short term funds 3 006 546 3 235 887
Financial assets held for trading 2 134 397 1 378 618
Financial assets designated at fair value 231 129 206 849
Derivative financial assets 21 236 595
Loans and advances 13 205 421 11 226 116
Investment securities 65 235 72 032
Prepayments and other receivables 430 796 266 988
Current tax assets 51 799 77 967
Investment in associates 27 772 15 110
Property and equipment 697 236 761 995
Investment property 134 403 25 678
Other intangible assets 145 664 103 393
Deferred tax assets 158 703 154 124
TOTAL ASSETS 20 310 337 17 525 352
EQUITY AND LIABILITIES
Liabilities
Deposits 15 569 139 14 142 110
Derivative financial liabilities 58 248 59 804
Creditors and accruals 592 327 266 170
Current tax liabilities 3 578 6 505
Deferred tax liability 32 150 27 435
Borrowed funds 2 756 202 2 070 282
Total liabilities 19 011 644 16 572 306
Stated capital 1 448 704 781 025
Foreign currency translation reserve (567 474) (145 358)
Non distributable reserves 549 657 290 325
Distributable reserves (79 640) 73 195
Equity attributable to ordinary shareholders 1 351 247 999 187
Non-controlling interests (52 554) (46 141)
Total equity 1 298 693 953 046
TOTAL EQUITY AND LIABILITIES 20 310 337 17 525 352
Loan commitments and other financial facilities 1 159 355 1 477 501
Consolidated statement of financial position
as at 31 December
USD’000s Notes 2015 2014
ASSETS
Cash and short term funds 267 963 340 415
Financial assets held for trading 190 231 145 031
Financial assets designated at fair value 20 600 21 760
Derivative financial assets 1 893 63
Loans and advances 5 1 176 954 1 180 987
Investment securities 5 814 7 578
Prepayments and other receivables 38 395 28 087
Current tax assets 4 615 8 202
Investment in associates 2 475 1 590
Property and equipment 62 142 80 162
Investment property 11 979 2 701
Other intangible assets 12 983 10 877
Deferred tax assets 14 145 16 214
TOTAL ASSETS 1 810 189 1 843 667
EQUITY AND LIABILITIES
Liabilities
Deposits 1 387 624 1 487 750
Derivative financial liabilities 5 191 6 292
Creditors and accruals 52 791 28 001
Current tax liabilities 319 684
Deferred tax liability 2 865 2 886
Borrowed funds 6 245 651 217 794
Total liabilities 1 694 441 1 743 407
Stated capital 129 118 82 164
Foreign currency translation reserve (50 577) (15 326)
Non distributable reserves 49 314 30 573
Distributable reserves (7 423) 7 700
Equity attributable to ordinary shareholders 120 432 105 111
Non-controlling interests (4 684) (4 851)
Total equity 115 748 100 260
TOTAL EQUITY AND LIABILITIES 1 810 189 1 843 667
Loan commitments and other financial facilities 7 103 329 131 685
1. Audit opinion
These financial results have been extracted from the audited group financial statements,
which have received an unqualified audit opinion.
2. Stated capital
During the year, Atlas Mara Ltd converted part of its loan to ABC Holdings Limited,
worth $50 million into equity. This increased stated capital to $129.1 million and the
number of issued shares to 419,229,374. The shares rank pari pasu with all other issued
ordinary shares.
3. Non-interest income
USD’000s 2015 2014
Net gains/(losses) on financial instruments designated at fair
value through profit or loss 447 (6 010)
Gains/(losses) on derivatives 51 (902)
Dividends received 53 1 082
Net fee and commission income 56 173 57 303
Forex trading income and currency revaluation 15 475 11 964
Gains on disposal of investment property – 143
Re-measurement of investment properties 3 036 (619)
Rental and other income 1 346 6 353
76 581 69 314
Notes to the statement of profit or loss and
statement of financial position
Consolidated statement of changes in equity
for the year ended 31 December
USD ‘000s
Stated
capital
Foreign
currency
translation
reserve
Capital
reserves
Available
for sale
reserve
Distributable
reserves Total
Non–
controlling
interest
Total
equity
Balance as at 1 January 2014 82 164 (15 164) 25 287 (62) 62 921 155 146 67 155 213
Loss for the year – – – – (48 648) (48 648) (4 833) (53 481)
Other comprehensive income: – (162) (16) 75 – (103) (85) (188)
Exchange differences on translating foreign operations – 2 918 – – – 2 918 (85) 2 833
Net loss on hedge of net investment in foreign operations – (3 080) – – – (3 080) – (3 080)
Share of reserves in associate companies – – (16) – – (16) – (16)
Movement in available for sale reserves: – – 75 – 75 – 75
– Arising in current year – – – 75 75 – 75
– Realised through profit and loss – – – – – – – –
TOTAL COMPREHENSIVE INCOME – (162) (16) 75 (48 648) (48 751) (4 918) (53 669)
Transfers within equity
Movement in general credit risk reserve – – 5 137 – (5 137) – – –
Movement in statutory reserves – – 152 – (152) – – –
Total transfers within equity – – 5 289 – (5 289) – – –
Transactions with owners – – – – – – – –
Dividends paid – – – – (1 284) (1 284) – (1 284)
Net proceeds from shares issued – – – – – – – –
Total transactions with owners – – – – (1 284) (1 284) – (1 284)
Balance as at 31 December 2014 82 164 (15 326) 30 560 13 7 700 105 111 (4 851) 100 260
Profit/(loss) for the year – – – – (572) (572) 1 109 537
Other comprehensive income: (3 046) (35 251) 3 418 312 460 (34 107) (942) (35 049)
Exchange differences on translating foreign operations (3 046) (31 755) – – – (34 801) (1 089) (35 890)
Net loss on hedge of net investment in foreign operations – (3 496) – – – (3 496) – (3 496)
Revaluation of property net of deferred tax – – 3 397 – – 3 397 – 3 397
Share of reserves in associate companies – – – 312 – 312 147 459
Movement in available for sale reserves: – – 21 – 460 481 – 481
– Arising in current year – – 21 – – 21 – 21
– Realised through profit and loss – – – – 460 460 – 460
TOTAL COMPREHENSIVE INCOME (3 046) (35 251) 3 418 312 (112) (34 679) 167 (34 512)
Transfers within equity
Movement in general credit risk reserve – – 15 011 – (15 011) – – –
Movement in statutory reserves – – – – – – – –
Total transfers within equity – – 15 011 – (15 011) – – –
Transactions with owners
Dividends paid – – – – – – – –
Net proceeds from shares issued 50 000 – – – – 50 000 – 50 000
Total transactions with owners 50 000 – – – – 50 000 – 50 000
Balance as at 31 December 2015 129 118 (50 577) 48 989 325 (7 423) 120 432 (4 684) 115 748
Directors: JA Claassen (South African), RE Credo (British), SA Fakie (South African), BM Gibbs (American), LT Gwata (Zimbabwean),
DC Khama (Motswana), Dr. B Mudavanhu (Zimbabwean)*, SR Pfende (Zimbabwean)*, MM Schneiders (Dutch), JF Vitalo (American)
* Executive
www.bancabc.com
4. Operating expenses
USD’000s 2015 2014
Administrative expenses 79 844 64 852
Property lease rentals 4 966 5 389
Staff costs 52 306 53 335
Auditor’s remuneration 1 207 1 163
Depreciation 7 947 9 005
Amortisation charge 3 411 4 474
Directors’ remuneration 1 571 9 847
151 252 148 065
5. Loans and advances
USD’000s 2015 2014
Mortgage lending 49 962 49 624
Instalment finance 37 450 68 331
Corporate lending 594 125 556 641
Commercial and property finance 21 949 11 995
Consumer lending 567 548 591 651
Gross loans and advances 1 271 034 1 278 242
Less: impairments (note 5.1) (94 080) (97 255)
Net loans and advances 1 176 954 1 180 987
5.1 Impairment Analysis
Specific impairments 73 428 81 981
Portfolio impairments 20 652 15 274
94 080 97 255
6. Borrowed funds
USD’000s 2015 2014
BIFM Capital Investment Fund One (Pty) Ltd 22 528 26 990
Afrexim Bank 89 689 85 495
Africa Agriculture and Trade Investment Fund S.A. 24 869 24 752
Norsad Finance Limited 10 672 12 068
Atlas Mara Limited 50 126 20 009
National Development Bank of Botswana Limited 2 304 4 559
Other 45 463 43 921
245 651 217 794
6. Borrowed funds (continued)
USD’000s 2015 2014
Fair value
BIFM Capital Investment Fund One (Pty) Ltd 27 651 31 539
Afrexim Bank 89 812 86 777
Africa Agriculture and Trade Investment Fund S.A. 25 382 27 594
Norsad Finance Limited 11 471 13 882
Atlas Mara Limited 50 126 20 010
National Development Bank of Botswana Limited 2 312 4 543
Other 45 460 43 969
252 214 228 314
Maturity analysis
On demand to one month 196 4 064
One to three months 1 268 1 418
Three months to one year 105 593 93 152
Over one year 138 594 119 160
245 651 217 794
7. Loan commitments and other financial facilities
USD’000s 2015 2014
Guarantees 52 271 82 041
Letters of credit, loan commitments and similar
contingent liabilities 51 058 49 644
103 329 131 685
Maturity analysis
Less than one year 88 681 122 312
Between one and five years 14 648 9 373
103 329 131 685
8. Exchange Rates
Closing Average Closing Average
Dec 15 Dec 15 Dec 14 Dec 14
Botswana pula 11.22 10.13 9.51 9.00
Tanzanian shilling 2 158.65 2 038.06 1 739.17 1 672.40
Zambian kwacha 10.98 8.62 6.40 6.23
Mozambican metical 47.03 39.04 33.58 31.52
South African rand 15.54 12.77 11.56 10.87
Notes to the statement of profit or loss and statement of financial position (continued)
Summary
The group is pleased to announce a significant turn-around in operational performance,
recording an attributable loss of US$0.6 million; a significant improvement from the reported
loss of US$48.6 million in 2014.
Statement of financial position
The statement of financial position remained stable at US$1.8 billion, compared with December
2014. Loans and deposits declined marginally to US$1.18 billion and US$1.39 billion respectively,
with currency depreciation across the markets BancABC operates in, contributing to this
marginal decline.
Net interest income
Net interest income of US$95.8 million is lower than the US$102.1 million in 2014, due to
marginal decline in loans and advances as well as currency depreciation.
Non-interest income
Non-interest income of US$76.6 million was up 10.5% compared to 2014, largely driven by
strong forex trading revenue, as well as growth in fee and commission revenues that has
largely resulted from retail asset growth.
Consolidated statement of comprehensive income
for the year ended 31 December
BWP‘000s 2015 2014
Result for the year 5 458 (481 368)
Other comprehensive income, net of tax
Other comprehensive income to be reclassified
to profit or loss in subsequent periods: (389 463) (1 691)
Exchange differences on translating foreign operations (363 570) 25 504
Net loss on hedge of net investment in foreign operations (35 416) (27 724)
Share of reserves in associate companies 4 650 (143)
Movement in available-for-sale reserves 4 873 672
Other comprehensive income not to be reclassified
to profit or loss in subsequent periods: 34 415 –
Revaluation of property (net of tax) 34 415 –
Total comprehensive income for the year (349 590) (483 059)
Total comprehensive income attributable to:
Ordinary shareholders (351 287) (438 810)
Non-controlling interest 1 697 (44 249)
(349 590) (483 059)
Consolidated statement of profit or loss
for the year ended 31 December
BWP‘000s 2015 2014
Interest and similar income 2 213 542 2 098 307
Interest and similar expense (1 242 946) (1 179 504)
Net interest income 970 596 918 803
Provision for credit losses (115 701) (650 196)
Net interest income after provision for credit losses 854 895 268 607
Non-interest income 775 770 623 890
Total operating income 1 630 665 892 497
Operating expenses (1 532 186) (1 332 716)
Net income from operations 98 479 (440 219)
Net income from associates 1 074 (559)
Result before tax 99 553 (440 778)
Income tax expense (94 095) (40 590)
Result for the year 5 458 (481 368)
Attributable to:
Ordinary shareholders (5 790) (437 880)
Non-controlling interests 11 248 (43 488)
Result for the year 5 458 (481 368)
Consolidated statement of profit or loss
for the year ended 31 December
USD’000s Notes 2015 2014
Interest and similar income 218 513 233 122
Interest and similar expense (122 700) (131 043)
Net interest income 95 813 102 079
Provision for credit losses (11 422) (72 237)
Net interest income after provision for credit losses 84 391 29 842
Non-interest income 3 76 581 69 314
Total operating income 160 972 99 156
Operating expenses 4 (151 252) (148 065)
Net income from operations 9 720 (48 909)
Net income from associates 106 (62)
Result before tax 9 826 (48 971)
Income tax expense (9 289) (4 510)
Result for the year 537 (53 481)
Attributable to:
Ordinary shareholders (572) (48 648)
Non-controlling interests 1 109 (4 833)
Result for the year 537 (53 481)
Consolidated statement of comprehensive income
for the year ended 31 December
USD‘000s 2015 2014
Result for the year 537 (53 481)
Other comprehensive income, net of tax
Other comprehensive income to be reclassified to
profit or loss in subsequent periods: (38 446) (188)
Exchange differences on translating foreign operations (35 890) 2 833
Net loss on hedge of net investment in foreign operations (3 496) (3 080)
Share of reserves in associate companies 459 (16)
Movement in available-for-sale reserves 481 75
Other comprehensive income not to be reclassified to
profit or loss in subsequent periods: 3 397 –
Revaluation of property (net of tax) 3 397 –
Total comprehensive income for the year (34 512) (53 669)
Total comprehensive income attributable to:
Ordinary shareholders (34 679) (48 751)
Non-controlling interest 167 (4 918)
(34 512) (53 669)
Consolidated statement of cash flows
for the year ended 31 December
USD‘000s 2015 2014
CASH FLOWS FROM OPERATING ACTIVITIES (67 851) 54 664
Cash generated from operating activities 30 693 37 103
Result before tax 9 826 (48 971)
Adjusted for: –
Provision for credit losses 11 422 72 237
Depreciation and amortisation 11 358 13 479
Dividends receivable – (1 082)
Net unrealised (gains)/losses on derivative financial instruments (51) 902
Re-measurement of investment property (3 036) 619
Net gains on financial instruments at FV through
profit or loss (447) –
Loss from associates – 62
Loss on held to maturity instruments 1 621 –
Profit on disposal of property and equipment – (143)
Tax paid (6 667) (13 664)
Net cash inflow from operating activities before
changes in operating funds 24 026 23 439
Net (decrease)/increase in operating funds (91 877) 31 225
Decrease in operating assets (279 734) (156 290)
Increase in operating liabilities 187 857 187 515
CASH FLOWS FROM INVESTING ACTIVITIES (10 922) (6 630)
Purchase of property and equipment (6 271) (6 316)
Purchase of intangible assets (6 548) (1 547)
Dividends received 53 1 082
Proceeds on disposal of property and equipment 1 844 151
CASH FLOWS FROM FINANCING ACTIVITIES 83 971 28 185
Increase in borrowed funds 83 971 29 469
Dividend paid – (1 284)
Increase in cash and cash equivalents 5 198 76 219
Cash and cash equivalents at the beginning of the year 340 415 274 944
Exchange adjustment on opening balance (77 650) (10 748)
Cash and cash equivalents at the end of the year 267 963 340 415
Cash and cash equivalents 192 732 247 525
Statutory reserves 75 231 92 890
Cash and short term funds 267 963 340 415
Credit impairments
The impairment charge of US$11.4 million in 2015 was substantially lower than the
US$72.2 million in 2014, mainly due to significant asset recoveries in Zimbabwe and
Tanzania.
Asset quality
The group remains focused on improving the quality of the loan book. Total non-
performing loans declined marginally to US$198 million in 2015 (2014: US$202 million). The
adequacy of provisioning for all risks within the loan book is considered sufficient given
the assessment of risk in the asset book.
Capitalisation
As at December 2015, all individual subsidiaries reported a capitalised position compliant
with regulatory requirements.
Change in functional currency
Owing to the change in the underlying business following the acquisition of ABC
Holdings Limited by Atlas Mara Limited, with effect from 1 July 2015 the group changed
its functional currency from Botswana pula, to United States dollar.
The group will continue to present some financial information in dual presentation
currencies (the other currency being Botswana Pula).
Outlook
While challenging, the first year of the acquisition has been met with considered success,
and the group continues its focus on the execution of key initiatives that will continue to
support improved performance.
Acknowledgment
We express our appreciation for the continued support of our customers, investors, the
Board, management and staff, and regulators in the markets in which we operate.
J A Claassen B Mudavanhu (Dr)
Group Chairman Group Chief Executive Officer (Acting)
29 March 2016 29 March 2016
Reshaping African Banking
www.bancabc.com
PRELIMINARY GROUP RESULTS
FOR THE YEAR ENDED 31 DECEMBER 2015
ABC HOLDINGS LIMITED