NMBZ HOLDINGS LIMITED
ANNUAL REPORT
31 DECEMBER
2020
CONTENTS
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Financial Summary
Group Profile
Chairman’s Statement
Report of the Directors
Statement of Directors’ Responsibility
Report of the Independent Auditors
Statements of Comprehensive Income
Statements of Financial Position
Statements of Changes in Equity
Statements of Cash Flows
Significant Accounting Policies
Notes to the Financial Statements
Historical Five Year Financial Summary
Sustainability report
Notice to Members
Explanations regarding the Notice of the Annual General Meeting
Shareholders’ Analysis
Shareholders’ Information
Secretary and Registered Office
2
Bill
Payments
Internal
Transfers
3
4
5 - 8
9 - 14
15 - 17
18 - 22
23 - 24
25 - 26
27 - 28
29 - 30
31 - 44
45 - 105
106 - 108
109 - 121
122 - 123
124 - 125
126 - 128
129
130
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
FINANCIAL SUMMARY
Inflation adjusted
Historical Cost
31 December 31 December
2019
Audited
Restated
2020
Audited
31 December 31 December
2019
Audited
2020
Audited
ZWL
ZWL
ZWL
ZWL
Total income
2 278 895 874 3 278 415 691
2 760 886 768
464 285 244
Operating profit before impairment charge and
loss on net monetary position
861 655 493 1 967 489 095
1 856 058 489
341 453 654
Total comprehensive income
1 030 289 817 1 151 854 267
2 704 776 561
473 463 396
Basic earnings per share (cents)
210.12
96.49
448.72
73.13
Total deposits
6 262 750 864 5 343 012 221
6 262 750 864 1 191 079 845
Total gross loans and advances
2 451 989 687 2 391 455 787
2 451 989 687
533 110 289
Total shareholders’ funds and
shareholders’ liabilities
Enquiries:
NMBZ HOLDINGS LIMITED
4 194 973 015 3 211 913 897
3 388 155 345
579 169 046
Benefit P Washaya, Chief Executive Officer, NMBZ Holdings Limited
benefitw@nmbz.co.zw
Gerald Gore, Deputy Chief Executive Officer, NMBZ Holdings Limited
geraldg@nmbz.co.zw
Benson Ndachena, Chief Finance Officer, NMBZ Holdings Limited
bensonn@nmbz.co.zw
Website:
Email:
Telephone:
http://www.nmbz.co.zw
enquiries@nmbz.co.zw
+263 8688003347
3
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
GROUP PROFILE
The NMBZ Holdings Limited Group (the Group) comprises the company (NMBZ Holdings Limited) and the wholly owned banking
subsidiary, NMB Bank Limited (the Bank).
The Bank was established in 1993 as a merchant bank incorporated under the Companies and Other Business Entities Act (Chapter
24:31) of Zimbabwe and is now registered as a commercial bank in terms of the Banking Act (Chapter 24:20) of Zimbabwe. It operates
through a branch network in Harare, Bulawayo, Masvingo, Mutare, Gweru, Bindura and Chinhoyi. The Bank’s branch and agency
network is constantly growing to service customers and meet demands in suitable and convenient locations. Set out below are the
Bank’s branch locations:
Avondale - 20 King George Road, Avondale, Harare
Bindura - Mwatuka Complex, Bindura
Borrowdale - Shops 37 & 38, Sam Levy’s Village, Borrowdale, Harare
Borrowdale Excellence Centre - NMB Head Office, 19207 Liberation Legacy Way, Borrowdale, Harare
Bulawayo - NMB Centre, Corner George Silundika Street/Leopold Takawira Street, Bulawayo
Chinhoyi - 469 Magamba Way, Chinhoyi
Gweru - 36 Robert Mugabe Road, Gweru
Head Office - NMB Head Office, 19207 Liberation Legacy Way Borrowdale, Harare
Joina City - Shop 105A, First floor, Joina City Corner Jason Moyo / Innez Terrace, Harare
Masvingo - Stand no. 377 Robert Mugabe Way, Masvingo
Msasa -77 Amby Drive, Harare
Mutare - Embassy Building, Corner Aerodrome Road/Second Street, Mutare
Southerton - 7 - 9 Plymouth Road, Harare
The Bank’s Automated Teller Machine (ATM) network, covers the following locations:
•
•
•
Avondale - Harare
Borrowdale - Harare
Bulawayo
• Card Centre - Harare
• Chinhoyi
•
Eastgate - Harare
• Gweru
•
Joina City - Harare
• Masvingo
• Msasa - Harare
• Mutare
•
Southerton - Harare
4
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT CHAIRMAN'S STATEMENT
for year ended 31 December 2020
INTRODUCTION
The 2020 operating environment was largely dogged by the devastating
effects arising out of the outbreak of the COVID-19 pandemic which
ravaged global economies. In response to the COVID-19 pandemic,
the Government of Zimbabwe like many other Governments imposed
lockdown measures of varying extents in an effort to curtail the spread
of the deadly Corona virus. A number of policy pronouncements were
made by the Government of Zimbabwe in response to the pandemic
and these affected the operations of the Group during the period under
review. Globally, the focus on COVID-19 has shifted to vaccination
with notable strides having been made on that front by a number of
countries. We remain hopeful that the vaccination programmes will
yield the desired results which should go a long way in alleviating this
global crisis.
Focusing on the local economy, the first half of the year under
review was characterised by hyper-inflation and incessant economic
instability emanating from the deterioration of the country’s foreign
exchange rate. However, the introduction of the RBZ administered
Foreign Exchange Auction System on 23 June 2020 appears to have
significantly contained the rapid oscillations that were characterising
the country’s foreign exchange rate. Significant trades have been
recorded on this platform from its inception and there has been notable
stability in the foreign exchange regime ever since the auction system
was introduced. This culminated in economic stability largely prevailing
in the second half of the year with the annual inflation rate closing the
year at 348.6% down from a peak of 837.5% recorded in July 2020.
Our hopes remain pinned on the sustainability of this stability which will
certainly foster economic growth into the foreseeable future.
The Bank’s digital strategy was launched at the most opportune time as
it has been quite instrumental in driving business within the COVID-19
induced circumstances. The Bank has recorded significant growth,
expansion and improvements on its digital platforms and this has
resulted in enhanced service delivery. Furthermore, in response to the
prevailing hyperinflationary environment, the Group adopted a number
of value preservation strategies in order to ensure that shareholders’
value is not eroded. These measures culminated in the Group’s
remarkable financial performance in spite of the difficult operating
environment.
The key inflation adjusted financial highlights of the Group as at 31
December 2020 are depicted below:
Shareholders' funds and
shareholders' liabilities
(ZWL$000's)
6,000,000
4,000,000
2,000,000
-
3,211,914
4,194,973
%
1
3
Total assets (ZWL$000's)
10,957,162
9,372,349
%
7
1
11,500,000
11,000,000
10,500,000
10,000,000
9,500,000
9,000,000
8,500,000
2019
2020
2019
2020
Total deposits (ZWL$000's)
6,500,000
6,000,000
6,262,751
5,500,000
5,343,012
5,000,000
4,500,000
%
7
1
Basic earnings per share (EPS)
(ZWL cents)
150.00
100.00
50.00
-
210.12
96.49
%
8
1
1
2019
2020
2019
2020
SUSTAINABILITY REPORTING
With the prevailing Covid-19 pandemic, we continue to build value
adding relationships with our staff and all stakeholders as well as in the
communities which we operate in. The Board upholds high standards of
management and corporate governance, which we believe are key to
delivering sustainable shareholder value and contribute to the Group’s
long term success. It is our responsibility as the Board to ensure that
management, not only delivers on short term objectives, but promotes
the long term growth of the Group. We have fostered and are buttressing
our culture of responsible business practices by paying more attention
to sustainability issues.
Since our inception in 1993, we have opened up opportunities for our
customers, communities, and the broader society. We endeavor to build
a future that prioritises resilience, social mobility and the environment
as well as economic growth. We have a long standing partnership with
the community and the Government in general through our involvement
in a diverse range of social and economic activities that serve broad
community audiences. Our aim is to continuously strengthen our
performance and create our sustainability strategy anchored on financial
inclusion, education, water, housing, construction, health and climate.
To this end, the Group through its Banking subsidiary remains committed
to financing the education sector, health, property & construction as
well as supporting the SMEs, the youths, the disadvantaged, vulnerable
groups in addition to supporting various environmental conservation
initiatives. Through advancing affordable loans, support was extended
to both educational institutions and students in pursuit of supporting the
education sector. The Bank also provided support in the construction
and maintenance of roads, dams and houses across the nation.
Furthermore, the Bank extended funding to local authorities in a bid
to ensure the provision of clean water and other critical amenities to
residents. In order to assist in clearing the national housing backlog,
the Bank also continued to advance mortgage facilities for residential
accommodation. In addition, pursuant to its initiative to support industry
and commerce, the Bank continues to advance mortgage facilities to its
Corporate clients and SMEs towards the construction and acquisition of
commercial properties.
The Group complied with all environmental management and other
related laws, regulations and best practices. Financing to both
corporates and SMEs were done entirely in accordance with the Banking
subsidiary’s Statement of Commitment to Responsible Financing and
Exclusion List.
CORPORATE SOCIAL INVESTMENTS
During the period under review, the Group channelled its Corporate
Social Investments towards education, environment conservation as
well as the support of disadvantaged and vulnerable groups. Donations
towards education were to the Ministry of Education Mashonaland West
Provincial Wellness Launch and Matabeleland North Athletics team
NASH/NAPH and the University of Zimbabwe COVID-19 Awareness
Campaign. We sponsored the TM/PnP Charity Golf tournament
where funds raised were channelled towards the Meikles Foundation,
which seeks to promote sustainable development through initiatives
that seek to protect wildlife and the environment as well as achieve
community welfare and education. Donations were also made to
KidzCan for treatment of children living with cancer, commemoration
of World Hearing Day, commemoration of the World Kidney Day and to
Chambuta Children’s Home.
The Group, in conjunction with other banks also channelled its
Corporate Social Investments towards the fight against COVID-19
under the Bankers Association of Zimbabwe.
5
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT CHAIRMAN'S STATEMENT (Cont’d)
for year ended 31 December 2020
CORPORATE DEVELOPMENTS
The Bank’s strategy remains firmly focused on the enhancement of its digital offerings to ensure seamless service delivery to the Bank’s existing and
future clients via its exciting and refreshing digital touch points. This strategy resonates very well with the ‘new normal’, where physical interactions
have to be kept at a minimum in line with the World Health Organisation (WHO) guidelines on fighting the novel COVID-19 pandemic.
The Bank continues with its financial inclusion drive and has intensified the opening of a number of low cost accounts via our NMBLite product. The
Bank is also quite excited by its recently launched self-account opening portal which offers an amazing and easy self on-boarding experience to
the Bank’s future customers. The portal is going through further refinements which will provide even more exciting insights and convenience to the
Bank’s valued customers.
During the period under review, we successfully migrated our Head Office to the new home along Borrowdale road offering a refreshing environment
for our staff and stakeholders. To enhance the customer experience, the Bank’s Excellence branch previously located at the Borrowdale, Sam Levy’s
Village, was also moved to the new Head Office much to the delight of our valued customers.
OUTLOOK AND STRATEGY
The containment of the COVID-19 pandemic continues to be an imperative for a global and local economic rebound in the short to medium term.
We are confident that the measures adopted by the Government of Zimbabwe and the imminent vaccination of the population with the COVID-19
vaccine, coupled with the collective efforts of all corporate and citizens will continue to minimise the spread of the virus and its total elimination in
the foreseeable future.
We are encouraged by the exchange rate stability which has been prevailing in the second half of the period under review and remain hopeful that
the stability will continue prevailing in order to create a conducive operating environment for business and the attraction of capital which will go a long
way in ensuring economic growth and stability in the foreseeable future.
The Group’s banking subsidiary will continue to enhance its digital offerings to continuously improve the customer experience which will also
contribute towards the Bank’s desire to broaden its market segments and grow its deposit base.
In pursuit of the revised capitalisation levels announced by the Central Bank, the Group has been pursuing a number of value-preservation strategies
to ensure the preservation and growth of the Bank’s regulatory capital.
GROUP RESULTS
Hyperinflationary reporting
Following the liberalisation of the exchange rate on 22 February 2019, there has been a significant depreciation in the exchange rate of the local
currency unit which in turn resulted in the economy plunging into hyper-inflation. In light of this background, the Directors assessed the impact of
International Accounting Standard (IAS) 29 “Financial Reporting in Hyperinflationary Economies” and noted that the conditions required to apply IAS
29 had materialized in the Group’s operating environment during the previous reporting period. Furthermore, the Public Accountants and Auditors
Board (PAAB) issued a pronouncement on 11 October 2019 indicating that the economy had become hyper-inflationary. The Directors have thus
prepared the accompanying financial statements using the hyperinflationary accounting basis to achieve fair presentation at the reporting date of
31 December 2020. Unless indicated otherwise, the results commentary below will be primarily on the Group’s hyper-inflationary adjusted financial
statements at the reporting date.
Financial performance
The profit before taxation was ZWL705 414 282 (2019 – ZWL691 317 803) during the period under review and this gave rise to total comprehensive
income of ZWL1 030 289 817 (2019 – ZWL1 151 854 266) after total other comprehensive income of ZWL181 026 875. The Group achieved a basic
earnings per share of 210.12 cents (2019 – 96.49 cents).
Operating expenses amounted to ZWL1 274 247 625 and these were up 18% from a prior year amount of ZWL1 079 026 942. The increase in
operating expenditure was mainly due to staff rationalisation costs and COVID-19 related expenditure to ensure the safety of the Bank’s customers
and staff as well as to ensure adherence to the COVID-19 protocol set by the World Health Organisation.
Impairment losses on financial assets measured at amortised cost amounted to ZWL127 974 740 for the current period from a prior year amount of
ZWL49 562 276 and the increase was mainly due to the increase in the Banking subsidiary’s assets measured at amortised cost during the period
under review. The bank has continued with its drive to reduce non-performing loans (NPLs) and the ratio stood at 0.44% as at 31 December 2020.
This was lower than the 31 December 2019 ratio of 1.37% and below the Bank’s and regulatory target of 5% as at 31 December 2020. The decrease
in the NPL ratio was largely due to aggressive collections and stricter credit underwriting standards.
6
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT CHAIRMAN'S STATEMENT (Cont’d)
for year ended 31 December 2020
GROUP RESULTS (continued)
Financial position
The Group’s total assets increased by 17% from ZWL9 372 348 955 as at 31 December 2019 to ZWL10 957 161 610 as at 31 December 2020
mainly due to a 125% increase in investment securities, a 60% increase in investment properties and an increase of 25% in property and equipment.
These increases were partly offset by a 32% decrease in intangible assets and an 11% decrease in cash and cash equivalents.
Investment properties increased from ZWL1 031 154 579 as at 31 December 2019 to ZWL1 653 496 476 as at 31 December 2020 due to additions
and improvements made on the Bank’s property portfolio in line with the value preservation strategies adopted by the Group to curtail the devastating
effects of the prevailing hyperinflationary environment.
Investment securities (Treasury Bills and Bonds) increased from ZWL480 731 899 as at 31 December 2019 to ZWL1 081 820 457 as at 31
December 2020 mainly due to the acquisition of Treasury bills and Bonds. Nevertheless, the bank has set maximum limits for investment securities
in order to ensure that most of the funds are channeled towards the productive sectors of the economy.
Total deposits increased by 17% from ZWL5 343 012 221 restated as at 31 December 2019 to ZWL6 262 750 864 as at 31 December 2020 as a
result of the Bank’s aggressive deposit mobilization efforts in pursuit of the broadening of the Bank’s target market segments.
The Bank’s liquidity ratio closed the period at 67.68% (2019 – 60.72%) and this was above the statutory requirement of a minimum of 30%.
Capital
The banking subsidiary’s capital adequacy ratio stood at 52.56% (Historical – 43.78%) as at 31 December 2020 (31 December 2019 – 48.46%;
Historical - 39.49%). The ratio was above the statutory minimum of 12%. Our capitalisation level is adequate to cover all risks and supports the
underwriting of new business.
The Group’s shareholders’ funds and shareholders’ liabilities have increased by 31% from ZWL3 211 913 897 restated as at 31 December 2019 to
ZWL4 194 973 015 as at 31 December 2020 largely as a result of the current year’s total comprehensive income.
The Bank’s regulatory capital as at 31 December 2020 was ZWL2 186 036 634 and is above the minimum required regulatory capital of ZWL25
million. The bank remains confident that its plan to meet the revised minimum capital of the ZWL equivalent of USD30 million for a Tier 1 bank by
31 December 2021 is achievable.
FUNCTIONAL CURRENCY
As announced in the Group’s financial statements for the year ended 31 December 2019, we continue to closely monitor the developments in the
economic and monetary landscape. On 22 February 2019, the Reserve Bank of Zimbabwe (RBZ) issued an Exchange Control Directive, RU 28 of
2019 which established an Interbank foreign exchange market to formalize the buying and selling of foreign currency through the Banks and Bureaux
de change. To operationalize this, the RBZ denominated the existing RTGS balances as RTGS dollars and initial trades between the RTGS dollar
and the US$ were pegged at USD/RTGS$1:2.5. On the same date, Statutory Instrument 33 (SI 33) of 2019 was also issued and it specified that
all assets and liabilities that were in USD immediately before 22 February 2019 were deemed to have been valued in RTGS$ at a rate of USD/
RTGS$1:1.
On 24 June 2019, through Statutory Instrument 142 (SI 142) of 2019, the Government of Zimbabwe discontinued the multicurrency regime which
had been in place since February 2009 and also introduced the Zimbabwe Dollar (ZWL), which was designated as the country’s sole legal tender to
be used for all local transactions and other purposes.
On 26 March 2020, the Reserve Bank of Zimbabwe in a press statement announced various interventions in response to the financial vulnerabilities
caused by the COVID-19 pandemic. One of the measures announced therein was the authorization of the use of free-funds in paying for goods
and services, in terms of Statutory Instrument (SI) 85 of 2020. On 24 July 2020, the Government of Zimbabwe issued Statutory Instrument (SI) 185
of 2020, which granted permission to display, quote or offer prices for all goods and services in both Zimbabwe dollars and foreign currency at the
interbank exchange rate.
On 23 June 2020, the Reserve Bank of Zimbabwe introduced the Foreign Exchange Auction System, effectively abandoning the fixed foreign
currency exchange rate regime which had been prevailing for the greater part of 2020. Significant trades have been recorded on the platform and
significant movements in the exchange rate have been resultantly recorded.
The Directors, having assessed all these developments, concluded that the Group’s functional currency remains the Zimbabwe dollar having
changed from USD to RTGS dollars on 22 February 2019, which subsequently changed to Zimbabwe Dollars (ZWL) following the issuance of SI
142 of 2019 on 24 June 2019.
7
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT CHAIRMAN'S STATEMENT (Cont’d)
for year ended 31 December 2020
LEGACY DEBTS
The banking subsidiary owed USD13 840 412 to various lines of credit providers as at 31 December 2020. The Bank registered these foreign debts
with the Reserve Bank of Zimbabwe (RBZ) as required by the regulatory directives. During the previous financial period, the Bank transferred to
the RBZ the ZWL equivalent of the foreign debts at a rate of USD/ZWL1:1. The RBZ has indicated that they will be issuing a USD denominated
instrument for these debts and consequently these debts and the RBZ deposits have been accounted for at the closing exchange rate of USD/ZWL
1:81.3486 at 31 December 2020. This effectively values the original credit lines at a rate of 1:1 on a netted off basis. The RBZ approved the line of
credit balances amounting to USD13 840 412.
DIVIDEND
The Board has resolved not to declare a dividend as the Group is focusing on achieving the minimum regulatory capital requirement of the ZWL
equivalent of USD30 million for a Tier 1 bank by 31 December 2021 for its banking subsidiary.
DIRECTORATE
Mr Givemore Taputaira was appointed to the Board of NMBZ Holdings Limited and NMB Bank Limited on 2 January 2020. The directors of both
NMBZ Holdings Limited and NMB Bank Limited boards are as follows: Mr Benedict A. Chikwanha (Board Chairman), Mr Benefit P. Washaya (Chief
Executive Officer), Mr Benson Ndachena (Chief Finance Officer), Mr Charles Chikaura (Independent Non-Executive Director and Deputy Chairman),
Mr James de la Fargue (Non-Executive Director), Ms Jean Maguranyanga (Independent Non-Executive Director), Mr Julius Tichelaar (Non-Executive
Director), Ms Sabinah Chitehwe (Independent Non-Executive Director), Ms Christine Glover (Non-Executive Director) and Mr Givemore Taputaira
(Independent Non-Executive Director).
APPRECIATION
I wish to express my heartfelt gratitude to all our clients, shareholders, regulatory authorities and all other valued stakeholders for their continued
support during these unprecedented times of the global health pandemic. To my fellow Board members, management and staff, I extend my
appreciation for their hard work, diligence, commitment and focus which has underpinned the achievement of these commendable results.
May I take this opportunity to encourage all our stakeholders to stay safe and continue practicing the WHO guidelines in order to minimize the spread
of the deadly corona virus.
MR. B. A. CHIKWANHA
CHAIRMAN
10 March 2021
8
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT REPORT OF THE DIRECTORS
for year ended 31 December 2020
We have pleasure in presenting to shareholders our report and the audited financial statements of the Group for the year ended 31 December 2020
1.
SHARE CAPITAL
The authorised and issued share capital of the Company are as follows:-
1.1
1.2
Authorised: 600 000 000 ordinary shares of ZWL0,00028 each.
Issued and fully paid: 404 171 689 ordinary shares of ZWL0,00028 each.
No share options were exercised during the year.
2.
GROUP ACTIVITIES AND RESULTS
The Group’s total comprehensive income was ZWL1 030 289 817 for the year ended 31 December 2020 (2019 – ZWL1 151 854 266).
3.
CAPITAL ADEQUACY
As at 31 December 2020, the Bank's regulatory capital adequacy ratio was 52.56% (Historical – 43.78%) (2019 – 48.46%).
4.
DIRECTORATE
4.1
Board of Directors
During the year ended 31 December 2020, Mr G.Taputaira was appointed to the board. There were no resignations.
Mr. B. A. Chikwanha
Mr. B. P. Washaya
Mr. B. Ndachena
Mr. J. de la Fargue
Ms. C. Glover
Mr. J. Tichelaar
Ms. J. Maguranyanga
Mr. C. Chikaura
Ms. S. Chitehwe
Mr. G. Taputaira
Independent Non-Executive Director (Chairman)
Chief Executive Officer
Chief Finance Officer
Non-Executive Director (representing African Century)
Non-Executive Director (representing Arise)
Non-Executive Director (representing AfricInvest)
Independent Non-Executive Director
Independent Non-Executive Director (Deputy Chairman)
Independent Non-Executive Director
Independent Non-Executive Director
In accordance with the Articles of Association, one third of the Directors will retire by rotation at the forthcoming Annual General Meeting
(AGM). Those retiring Directors, being eligible, offer themselves for re-election.
4.2
Directors’ Interests
As at 31 December 2020, the Directors of the Group (NMBZ Holdings Limited and the Bank) held the following direct and indirect
beneficial interests in the shares of the Company:-
31 December
31 December
2020
Shares
20 800
600
10 289
-
-
-
2019
Shares
20 800
600
9 931
-
-
-
Mr. B. A. Chikwanha*
Ms. J. Maguranyanga
Mr. B. P. Washaya**
Mr. J. de la Fargue***
Ms. C. Glover****
Mr. J. Tichelaar *****
Mr. B. Ndachena******
83 521
80 448
Mr. C. Chikaura
Ms. S. Chitehwe
Mr. G. Taputaira
-
-
4 540
-
-
-
----------------
-----------------
119 750
111 779
==========
==========
* Mr. B. A. Chikwanha is the Chairman of the board of Directors of NMBZ Holdings Limited and NMB Bank Limited.
** Mr. B. P. Washaya is the Chief Executive Officer of NMBZ Holdings Limited and NMB Bank Limited
9
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
REPORT OF THE DIRECTORS (Cont’d)
for year ended 31 December 2020
4.2
Directors’ Interests (Continued)
***Mr. J. de la Fargue represents African Century Financial Investments Limited (76 426 874 shares) on the board of Directors of NMBZ
Holdings Limited and NMB Bank Limited.
**** Ms. C. Glover represents Arise (71 632 001 shares) on the board of Directors of NMBZ Holdings Limited and NMB Bank Limited.
*****Mr J. Tichelaar represents AfricInvest (36 702 487 shares) on the board of Directors of NMBZ Holdings Limited and NMB Bank
Limited.
****** Mr. B. Ndachena is the Chief Finance Officer of NMBZ Holdings Limited and NMB Bank Limited.
4.3
Directors’ attendance at meetings
4.3.1
Board of Directors
Name
Mr. B A Chikwanha
Mr C. Chikaura
Ms. J. Maguranyanga
Mr.J. Tichelaar
Mr J de la Fargue
Ms. C. Glover
Mr. G. Taputaira
Ms. S. Chitehwe
Mr. B.P. Washaya
Mr. B. Ndachena
4.3.2
Audit Committee
Name
Ms. S. Chitehwe
Mr. C. Chikaura
Ms. J. Maguranyanga
Mr. G. Taputaira
4.3.3
Risk and Compliance Management Committee
Name
Mr. C. Chikaura
Mr. J. de la Fargue
Ms. C. Glover
Mr. B. A. Chikwanha*
Mr. G. Taputaira
Ms. J. Maguranyanga**
Meetings Held
Meetings Attended
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
Meetings Held
Meetings Attended
4
4
4
4
4
4
4
4
Meetings Held
Meetings Attended
4
4
4
1
4
3
4
3
4
1
4
3
*Mr. B.A. Chikwanha resigned from the Committee on 10th March 2020.
**Ms. J Maguranyanga was appointed to the Committee on 5th May 2020.
10
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT REPORT OF THE DIRECTORS (Cont’d)
for year ended 31 December 2020
4.3.4
Asset and Liability Management (ALCO) & Finance Committee
Name
Mr. C. Chikaura
Ms. S. Chitehwe
Mr. J. de la Fargue
Mr. J. Tichelaar
Ms. C. Glover
Mr. B. P. Washaya
Mr. B. Ndachena
Mr. G. Gore
4.3.5
Loans Review Committee
Name
Ms. J. Maguranyanga
Ms. C. Glover
Ms. S. Chitehwe
Mr. J. Tichelaar
Mr G. Taputaira
Meetings Held
Meetings Attended
4
4
4
4
4
4
4
4
4
4
3
4
4
4
4
4
Meetings Held
Meetings Attended
4
4
4
4
4
4
4
4
3
4
4.3.6
Human Resources, Remuneration and Nominations Committee
Name
Ms. J. Maguranyanga*
Mr. B. A. Chikwanha
Mr. J. Tichelaar
Mr. C. Chikaura*
Mr. J. de la Fargue*
Meetings Held
Meetings Attended
6
4
4
6
6
6
4
4
6
6
*Ms. J. Maguranyanga, Mr. C Chikaura and Mr. J. de la Fargue form the Remuneration Sub-Committee, which met twice during the year.
4.3.7
Credit Committee
Name
Mr. B. A. Chikwanha
Mr. B. P. Washaya
Mr. J. de la Fargue
Mr. C. Chikaura
4.3.8
Head Office Project Sub-Committee*
Name
Ms. S. Chitehwe
Mr. C. Chikaura
Mr. J. de la Fargue
Mr. B. Ndachena
*The Head Office Project Sub-Committee was dissolved on 31st December 2020
Meetings Held
Meetings Attended
4
4
4
4
4
4
4
4
Meetings Held
Meetings Attended
9
9
9
9
9
8
9
9
11
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT REPORT OF THE DIRECTORS (Cont’d)
for year ended 31 December 2020
4.3.9
IT & Digital Banking Committee*
Name
Mr. G. Taputaira
Mr. B. A. Chikwanha
Ms. C. Glover
Ms. S. Chitehwe
Mr. J. Tichelaar
Mr. B. P.Washaya
Meetings Held
Meetings Attended
3
3
3
3
3
3
3
3
3
3
3
3
*The IT & Digital Banking Committee was constituted on 29th April 2020
5.
CORPORATE GOVERNANCE
The Group adheres to international best practice with regards to corporate governance. In particular, the Group emulates corporate
governance principles set out in the Combined Code of the United Kingdom, the King IV report of South Africa, the National Code on
Corporate Governance Zimbabwe and the Reserve Bank of Zimbabwe (RBZ) Corporate Governance Guideline No. 01-2004/BSD. The
Board has set up the Audit Committee, Human Resources, Remuneration and Nominations Committee, ALCO & Finance Committee,
Credit Committee, Loans Review Committee, IT and Digital Banking Committee and the Risk & Compliance Management Committee
to assist in the discharge of its duties and responsibilities. Board and Director evaluations are carried out an annual basis, wherein the
effectiveness of the Board is reviewed, including its gender and skills mix. The Board also adheres to the Bank’s Code of Ethics and
Environmental and Social Risk Management Framework.
5.1
The Board of Directors
The NMBZ Holdings Limited and NMB Bank Limited boards comprise of ten Directors each. The boards of the holding company and the
Bank are identical. The Group obtained regulatory approval to have one board for NMBZ Holdings Limited and the banking subsidiary.
The boards comprise, of two executive and eight non-executive Directors. Of the eight non-executive Directors, five are independent non-
executive Directors. The Chairpersons of the board and all the board committees are independent non-executive Directors. Furthermore,
the independence of the independent non-executive Directors is reviewed on an annual basis. The boards and the board committees
meet at least four times a year.
5.2
Audit Committee
The committee oversees the Group's financial reporting process, monitoring the integrity and appropriateness of the Group's
financial statements; evaluating the adequacy of the Group's financial and operational processes, compliance, internal
controls and risk management processes and the selection, compensation, independence and performance of the Group's
external and internal auditors. The committee also provides independent oversight of the effectiveness of the Group’s
assurance functions and services, with particular focus on combined assurance arrangements. The committee meets at
least four times a year. The committee meets regularly with the internal and external auditors. Both the internal and external
auditors have unrestricted access to the audit committee to ensure their independence and objectivity.
Membership:
Chairperson-Independent Non-Executive Director
Ms. S. Chitehwe
Ms. J. Maguranyanga
Independent Non-Executive Director
Mr. C. Chikaura Independent Non-Executive Director
Independent Non-Executive Director
Mr. G. Taputaira
The external auditors, Chief Finance Officer and Internal Auditor are invitees and resource persons at every meeting. The
Committee is satisfied that it has fulfilled its responsibilities in accordance with its terms of reference for the reporting period.
5.3
Human Resources, Remuneration and Nominations Committee
The committee is responsible for setting the Group’s remuneration philosophy and reviews the overall remuneration structures
of the Group, including all material remuneration proposals and packages for Executive Directors and senior personnel. The
committee is also responsible for the nomination, election and appointment of board members.
Membership:
Ms. J. Maguranyanga
Mr. J. de la Fargue
Mr. J. Tichelaar
Mr. C. Chikaura
Mr. B. A. Chikwanha
Chairperson - Independent Non-Executive Director
Non-Executive Director
Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
The Chief Executive Officer, Deputy Chief Executive Officer and Head of Human Capital are invitees and resource persons
at every meeting. The Committee is satisfied that it has fulfilled its responsibilities in accordance with its terms of reference
for the reporting period
12
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
REPORT OF THE DIRECTORS (Cont’d)
for year ended 31 December 2020
5.4
Loans Review Committee
The Loans Review Committee assesses compliance of the loan book with the lending policy and the Banking Regulations.
The Committee conducts loan reviews independent of any person or committee responsible for sanctioning credit.
Membership:
Ms. J. Maguranyanga Chairperson-Independent Non-Executive Director
Ms. S. Chitehwe
Mr G. Taputaira
Mr. J. Tichelaar
Independent Non-Executive Director
Independent Non-Executive Director
Non-Executive Director
Non-Executive Director
Ms. C. Glover
The Deputy Chief Executive Officer and Chief Risk Officer are invitees and resource persons at every meeting. The Committee
is satisfied that it has fulfilled its responsibilities in accordance with its terms of reference for the reporting period.
5.5
Credit Committee
The Credit Committee’s main responsibilities are to consider loan applications beyond the discretionary limits of the
Management Credit Committee and to direct the formulation of, review and monitor the credit principles and policies of the
Group.
Membership:
Mr. B. A. Chikwanha Chairperson - Independent Non-Executive Director
Mr. B. P. Washaya Chief Executive Officer
Non-Executive Director
Mr. J. de la Fargue
Independent Non-Executive Director
Mr. C. Chikaura
The Chief Banking Officer, Business Development Executive and Head of Credit Management are invitees and resource
persons at every meeting. The Committee is satisfied that it has fulfilled its responsibilities in accordance with its terms of
reference for the reporting period.
5.6
Asset and Liability Management & Finance Committee (ALCO & Finance Committee)
The ALCO & Finance Committee is responsible for deriving the most appropriate strategy for the Group in terms of the mix of
assets and liabilities given its expectations of the future and the potential consequences of interest-rate movements, liquidity
constraints, foreign exchange exposure and capital adequacy. In addition, the Committee monitors the business and financial
strategies of the Company and keeps track of financial performance vis a vis the budget.
Membership:
Mr. C. Chikaura
Mr. J de la Fargue
Ms. C. Glover
Mr. J. Tichelaar
Ms. S. Chitehwe
Mr. B. P. Washaya
Mr. B. Ndachena
Mr. G. Gore
Chairperson-Independent Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Independent Non-Executive Director
Chief Executive Officer
Chief Finance Officer
Deputy Chief Executive Officer
The Chief Risk Officer and Head of Treasury are invitees and resource persons at every meeting. The Committee is satisfied
that it has fulfilled its responsibilities in accordance with its terms of reference for the reporting period.
5.7
Risk and Compliance Management Committee
The Risk and Compliance Management Committee oversees the quality, integrity and reliability of the Group’s risk
management systems and reviews all group-wide risks.
Membership:
Mr. C. Chikaura Chairperson-Independent Non-Executive Director
Ms. C. Glover
Mr. J. de la Fargue
Ms. J. Maguranyanga
Mr. G. Taputaira
Non-Executive Director
Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
The Chief Executive Officer, Deputy Chief Executive Officer, Chief Risk Officer and Head of Compliance Management
are invitees and resource persons at every meeting. The Committee is satisfied that it has fulfilled its responsibilities in
accordance with its terms of reference for the reporting period.
13
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
REPORT OF THE DIRECTORS (Cont’d)
for year ended 31 December 2020
5.8
IT & Digital Banking Committee
The IT & Digital Banking Committee provides governance and oversight on the technology-related investments, operations,
strategies of the Bank and their alignment with the Bank’s Strategy. It also oversees the Bank’s technology risk management
and security framework and its effectiveness (in conjunction with the Risk & Compliance Committee).
Membership:
Mr. G. Taputaira
Mr. B. A. Chikwanha
Ms. S. Chitehwe
Ms. C. Glover
Mr. J. Tichelaar
Mr. B. P. Washaya
Mr. G. Gore
Chairperson – Independent Non-Executive Directors
Independent Non-Executive Director
Independent Non-Executive Director
Non-Executive Director
Non-Executive Director
Chief Executive Officer
Deputy Chief Executive Officer
The Chief Technology Officer, Chief Risk Officer and Head Digital Banking are invitees and resource persons at every
meeting. The Committee is satisfied that it has fulfilled its responsibilities in accordance with its terms of reference for the
reporting period
5.9
Professional Advice
The non-executive Directors have access to independent professional advice at the Group's expense.
6.
AUDITORS
At the forthcoming Annual General Meeting, the shareholder will be asked to authorise the Directors to approve the auditors’
remuneration for the year ended 31 December 2020 and to appoint auditors of the Group for the ensuing year.
By order of the Board
Miss S I Pashapa
Company Secretary
Harare
10 March 2021
14
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
STATEMENT OF DIRECTORS’ RESPONSIBILITY
for year ended 31 December 2020
1.
RESPONSIBILITY
The Directors of the Group are mandated by the Companies and Other Business Entities Act (Chapter 24:31) of Zimbabwe
to maintain adequate accounting records and to prepare consolidated and separate financial statements that present a true
and fair view of the state of affairs of the Group and Company at the end of each financial year. The information contained in
these consolidated and separate financial statements has been prepared on a going concern basis and is in accordance with
the provisions of the Companies and Other Business Entities Act (Chapter 24:31) of Zimbabwe, the Banking Act (Chapter
24:20) of Zimbabwe and International Financial Reporting Standards (IFRSs).
2.
CORPORATE GOVERNANCE
In its operations, the Group is guided by principles of corporate governance derived from the King III Report of South Africa,
the National Code on Corporate Governance, the United Kingdom Combined Code and the Reserve Bank of Zimbabwe
Corporate Governance Guideline No. 01-2004/BSD. The Directors of the Group are cognisant of their responsibility to
exercise the duty of care and act in good faith in order to safeguard all stakeholders’ interests.
3.
BOARD OF DIRECTORS
Board appointments are made in a manner that ensures an adequate mix of skills and expertise on the board. The majority
of the Group’s non-executive Directors are independent and thus provide the necessary checks and balances on the board
and ensure that the interests of all stakeholders are taken into account in the decision making process. The Chairman of the
board is an independent non-executive Director. The board is assisted by various committees in executing its responsibilities.
The board meets at least quarterly to assess risk, review financial performance, and provide guidance to management on
operational and policy issues.
The board conducts an annual evaluation to assess its effectiveness and develop remedial action plans to address
weaknesses noted from the evaluation. The evaluation involves an assessment of collective board performance, the
chairperson’s performance and individual Directors’ performance.
4.
INTERNAL FINANCIAL CONTROLS
The board is responsible for ensuring that effective internal control systems are implemented within the Group. The Group
maintains internal controls and systems designed to provide reasonable assurance of the integrity and reliability of its
records, safeguard the assets of the group and prevent and detect fraud and errors. The Audit Committee in conjunction
with the external and internal auditors of the Group reviews and assesses the internal control systems of the Group in key
risk areas.
5. STATEMENT OF COMPLIANCE
The financial statements are prepared with the aim of complying fully with International Financial Reporting Standards
(IFRSs) and have been prepared in the manner required by the Companies and Other Business Entities Act (Chapter 24:31)
of Zimbabwe and the Banking Act (Chapter 24:20) of Zimbabwe.
The Directors have been able to achieve full compliance with IFRSs in previous reporting periods up to 31 December 2017.
However, the 31 December 2020 and the comparative period as well as the 31 December 2018 financial reporting period
could only achieve partial compliance to the IFRS reporting framework due to developments detailed below.
The IFRS Conceptual Framework states that to achieve fair presentation to the financial statements, companies should
consider the underlying economic substance of the transaction over and above the legal form. International Accounting
Standard (IAS 21) “The Effects of Changes in Foreign Exchange Rates” requires the Directors to determine the functional
currency of the reporting entity in preparing the entity’s financial statements. In arriving at this conclusion, the entity
is required to apply certain parameters which the Directors duly applied in their judgement. Furthermore, IAS 21 also
requires the reporting entity to make certain judgements in determining the appropriate exchange rates to apply for certain
transactions conducted in currencies other than the functional currency of the reporting entity.
As explained in Note 2.4.7, “Determination of the functional currency”, it is our opinion that following the Monetary Policy
pronouncements of 1 October 2018 and 20 February 2019, as well as the issuance of Exchange Control Directive RU 28
of 2019 on 22 February 2019, the country’s functional currency appeared to have changed from the United States Dollar in
terms of the IAS 21 considerations. However, the Government of Zimbabwe issued Statutory Instrument (SI 33) of 2019
on 22 February 2019, which prescribes the rate of USD1:RTGS$1 in accounting for all transactions and events before the
effective date of the statutory instrument.
Furthermore, it is our interpretation that the SI 33 of 2019 issued in terms of the Presidential Powers Temporary Measures
Act [Chapter 10:20], ranks supreme to any contrary legislation including quasi-legislations, which therefore implies that in
preparing the financial statements, we sought to comply with the provisions of SI 33 of 2019 ahead of the IAS 21 requirements.
15
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT STATEMENT OF DIRECTORS’ RESPONSIBILITY (Cont’d)
for year ended 31 December 2020
5. STATEMENT OF COMPLIANCE (Cont’d)
This, in our opinion resulted in non-compliance with IAS 21 and that non-compliance had a significant impact on the true and
fair presentation of the Group’s financial position and would therefore urge users of the financial statements to exercise due
caution.
The consolidated and separate financial statements were approved by the Board of Directors on 10 March 2021.
The consolidated financial statements are prepared with the aim of complying fully with International Financial Reporting
Standards (IFRSs) and have been prepared in the manner required by the Companies and Other Business Entities Act
(Chapter 24:31) of Zimbabwe and the Banking Act (Chapter 24:20) of Zimbabwe.
5.
GOING CONCERN
The Directors have assessed the ability of the Group and its subsidiary to continue operating as a going concern and believe
that the preparation of these financial statements on a going concern is still appropriate.
6.
INTERNAL AUDIT
The internal audit function has formally defined objectives, authority, and responsibilities enshrined in the Internal Audit
Charter, which principles are consistent with those of the Institute of Internal Auditors. The function is guided by the Internal
Audit Manual and the Reserve Bank of Zimbabwe’s Guideline on Minimum Internal Audit Standards in Banking Institutions, in
conducting its activities. The internal audit function is independent of business lines and has unrestricted access to the Audit
Committee. The internal audit functions include evaluating the effectiveness of the risk management systems, reviewing the
systems of internal control including internal financial controls and the conduct of the Group’s operations.
7.
REMUNERATION
The Human Resources, Remuneration and Nominations Committee determines the remuneration policy for the Group. The
remuneration policy is designed to reward performance and retain highly skilled individuals. Accordingly, a discretionary
performance related bonus is offered in addition to a basic salary package.
8.
EMPLOYEE PARTICIPATION AND DEVELOPMENT
The Group encourages active participation by its employees in its ownership. In line with this commitment, managerial
employees have in the past participated in the Group’s share option scheme. The Group is working on operationalising a
new share option scheme for staff members approved in the 2012 Annual General Meeting. The Group is also committed to
enhancing the skills of staff and sponsors attendance of courses at reputable local and international institutions.
9.
SOCIAL RESPONSIBILITY
The Group recognises its responsibility in the society within which it operates. The Group’s social investments were
channelled into the country’s educational system, the disadvantaged, vulnerable groups, protection of the environment,
wildlife conservation, the arts and various sporting disciplines. In light of the priority being given to the Group’s social
responsibility and sustainability issues, the Group has enhanced its disclosures to include a report on sustainability in line
with best practices.
10.
REGULATION
The banking subsidiary of the Group is subject to regulation and supervision by the Reserve Bank of Zimbabwe, which
conducts the functions of the Registrar of Banking Institutions and is also the supervisor of banking institutions. Where
appropriate, the Group participates in industry-consultative meetings and discussion groups aimed at enhancing the business
environment.
11.
ETHICS
As a Group, we aim to ensure that we adhere to the highest standards of responsible business practice. In that regard,
the Group’s values include integrity and excellence. The Group’s employees are thus expected to adhere to the highest
standards of personal integrity and professional conduct. The Group monitors its staff conduct through the code of conduct
and ensures through its anti-money-laundering policies that it does not conduct business with entities whose activities are
unethical.
16
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
STATEMENT OF DIRECTORS’ RESPONSIBILITY (Cont’d)
for year ended 31 December 2020
12.
FINANCIAL STATEMENTS
The Group’s Directors are responsible for the preparation and fair presentation of these consolidated financial statements
in accordance with International Financial Reporting Standards (IFRS) and in the manner required by the Companies and
Other Business Entities Act (Chapter 24:31) of Zimbabwe and the Banking Act (Chapter 24:20) of Zimbabwe and for such
internal control as the Directors determine necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
Preparation of the Group financial statements
These Group financial statements have been prepared under the supervision of Mr Benson Ndachena, a Chartered
Accountant (Zimbabwe), PAAB registration number 00327.
Approval of the Group financial statements
The consolidated financial statements of the Group appearing on pages 23 to 105 were approved by the Board of Directors
on 10 March 2021 and are signed on their behalf by:
………………………………….
Mr. B. A. Chikwanha
Group Chairman
………………………………
Mr. B. P. Washaya
Group Chief Executive Officer
Date: 10 March 2021
Date: 10 March 2021
17
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
Ernst & Young
Chartered Accountants (Zimbabwe)
Registered Public Auditors
Angwa City
Cnr Julius Nyerere Way /
Kwame Nkrumah Avenue
P O Box 62 or 702
Harare
Zimbabwe
Tel: +263 4 750905-14 or 750979-83
Fax: +263 4 750707 or 773842
Email: admin@zw.ey.com
www.ey.com
Independent Auditor’s Report
To the Shareholders of NMBZ Holdings Limited
Report on the Audit of the consolidated and separate inflation adjusted financial statements
Adverse Opinion
We have audited the consolidated and separate inflation adjusted financial statements of NMBZ Holdings
Limited and its subsidiaries (the Group), as set out on pages 27 to 148, which comprise the consolidated
and separate inflation adjusted consolidated and separate statement of financial position as at 31
December 2020, and the related inflation adjusted consolidated statement of profit or loss and other
comprehensive income, the inflation adjusted consolidated statement of changes in equity and the inflation
adjusted statement of cash flows for the year then ended, and notes to the inflation adjusted consolidated
financial statements, including a summary of significant accounting policies and other explanatory notes.
23 to 105
In our opinion, because of the significance of the matters discussed in the Basis for Adverse Opinion section
of our report, the accompanying inflation adjusted financial statements do not present fairly the financial
positions of the Group as at 31 December 2020, and their financial performance and their cash flows for
the year then ended in accordance with International Financial Reporting Standards (IFRSs) and Companies
and Other Business Entities Act (Chapter 24:31) and the Banking Act (Chapter 24:20).
Basis for Adverse Opinion
Non-compliance with International Financial Reporting Standards IAS 21- The Effects of Changes in
Foreign Exchange Rates in Prior Period and Inappropriate Application of IAS 8- Accounting Policies,
Changes in Accounting Estimates and Errors
Non-compliance with IAS 8
As explained in note 2.4.7 to the inflation adjusted consolidated financial statements, the Group changed
its functional and reporting currency from United States Dollar (US$) to Zimbabwe Dollars (ZWL) on 22
February 2019 in compliance with Statutory Instrument 33 of 2019.
We however believe that the change occurred on 1 October 2018 in terms of IAS21 given the significant
monetary and exchange control policy changes witnessed in Zimbabwe from 2016 through to 2019.
Our audit report for the year ended 31 December 2019 was therefore modified as management
prospectively applied the change in functional currency from USD to ZWL from 23 February 2019, which
we disagreed with. The correct approach would have been a retrospective restatement as a prior period
error in terms of International Financial Reporting Standards – IAS 8 – Accounting Polices, Changes in
Accounting Estimates and Errors.
A member firm of the Ernst & Young Global Limited
18
22
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
Ernst & Young
Chartered Accountants (Zimbabwe)
Registered Public Auditors
Angwa City
Cnr Julius Nyerere Way /
Kwame Nkrumah Avenue
P O Box 62 or 702
Harare
Zimbabwe
Tel: +263 4 750905-14 or 750979-83
Fax: +263 4 750707 or 773842
Email: admin@zw.ey.com
www.ey.com
The matter continues to impact the following balances on the inflation adjusted consolidated Statement of
Independent Auditor’s Report
Financial Position as they still comprise of amounts from opening balances: ZWL1 768 277 432 included in
Property and equipment of ZWL1 588 179 384, Intangible assets of ZWL35 509 627, Retained earnings of
To the Shareholders of NMBZ Holdings Limited
ZWL1 482 983 888 and Revaluation reserves of ZWL487 104 622. The impact on the inflation adjusted
consolidated statements of profit or loss and other comprehensive income, changes in equity and cashflows
Report on the Audit of the consolidated and separate inflation adjusted financial statements
has not been discussed here due to further matters below which result in further misstatement.
ZWL20 106 575 included in Fee and commission income of ZWL 1 131 552 573
Inflation adjusted consolidated Statement of Profit or Loss and Other Comprehensive Income:
Adverse Opinion
On date of change in functional currency, management translated elements on the financial statements
using different exchange rates which resulted in a misbalance which was recorded directly in equity as a
We have audited the consolidated and separate inflation adjusted financial statements of NMBZ Holdings
functional currency translation reserve of ZWL 287 529 426. This is not in line with the requirements of
Limited and its subsidiaries (the Group), as set out on pages 27 to 148, which comprise the consolidated
IFRS.
and separate inflation adjusted consolidated and separate statement of financial position as at 31
December 2020, and the related inflation adjusted consolidated statement of profit or loss and other
Exchange rates used in the current year
comprehensive income, the inflation adjusted consolidated statement of changes in equity and the inflation
adjusted statement of cash flows for the year then ended, and notes to the inflation adjusted consolidated
In the current year, the Group translated foreign denominated transactions and balances to ZWL using the
financial statements, including a summary of significant accounting policies and other explanatory notes.
interbank exchange rates for the period 1 January 2020 to 23 June 2020, prior to introduction of the
Foreign Exchange Auction Trading System. As in the prior year, we concluded that the interbank exchange
In our opinion, because of the significance of the matters discussed in the Basis for Adverse Opinion section
rates did not meet the definition of a spot exchange rate as per IAS 21, as they were not available for
of our report, the accompanying inflation adjusted financial statements do not present fairly the financial
immediate delivery. Consequently, the following financial statement elements are materially misstated in
positions of the Group as at 31 December 2020, and their financial performance and their cash flows for
the current year in addition to those noted on matter 1 above:
the year then ended in accordance with International Financial Reporting Standards (IFRSs) and Companies
and Other Business Entities Act (Chapter 24:31) and the Banking Act (Chapter 24:20).
•
Basis for Adverse Opinion
o
Non-compliance with International Financial Reporting Standards IAS 21- The Effects of Changes in
o
Foreign Exchange Rates in Prior Period and Inappropriate Application of IAS 8- Accounting Policies,
Changes in Accounting Estimates and Errors
o
Non-compliance with IAS 8
The impact can however not be quantified due to the lack of records on appropriate rates and
As explained in note 2.4.7 to the inflation adjusted consolidated financial statements, the Group changed
impracticability given the volume of transactions. Our prior year audit report was also modified due to this
its functional and reporting currency from United States Dollar (US$) to Zimbabwe Dollars (ZWL) on 22
matter.
February 2019 in compliance with Statutory Instrument 33 of 2019.
Valuation of investment properties, freehold land and buildings
We however believe that the change occurred on 1 October 2018 in terms of IAS21 given the significant
monetary and exchange control policy changes witnessed in Zimbabwe from 2016 through to 2019.
The Group’s investment properties and freehold land and buildings are carried at ZWL1,653,496,3476
1,653,496,476
(2019: ZWL1,031,154,579) and ZWL 2 218 171 535 (2019: ZWL1 768 277 432) respectively as at 31
Our audit report for the year ended 31 December 2019 was therefore modified as management
December 2020 as described on Note 23 and Note 25. The implicit investment method was applied for
prospectively applied the change in functional currency from USD to ZWL from 23 February 2019, which
Industrial and commercial properties and key inputs into the calculations include rentals per square meter
we disagreed with. The correct approach would have been a retrospective restatement as a prior period
and capitalisation rates. Residential properties and vacant stands were valued in terms of the market
error in terms of International Financial Reporting Standards – IAS 8 – Accounting Polices, Changes in
comparable approach. In both cases, the valuation was performed based on USD denominated inputs and
Accounting Estimates and Errors.
converted to ZWL as the presentation currency using the closing weighted average auction rate.
Management further applied a discount factor to the resultant value based on actual rental yields as
described on Note 23.
ZWL23 575 425 included in operating costs ZWL 1 274 247 625
Net exchange gains/losses of ZWL128 836 005
A member firm of the Ernst & Young Global Limited
We have concerns over the appropriateness of using a foreign currency for the valuation and then applying
a conversion rate to a USD valuation to calculate ZWL property values as this may not be an accurate
reflection of the current market dynamics where there is a disparity between exchange rates. With respect
to the implicit investment approach, the USD estimated rentals may not be an appropriate proxy for the
ZWL amounts in which rentals are settled.
22
While historical USD amounts based on similar transactions have been used as a starting point in
determining comparable values on the market comparable approach, it is noted that market participants
take into account different risk factors in determining an appropriate value in ZWL terms which are not
necessarily limited to the exchange rate.
19
23
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
Ernst & Young
Chartered Accountants (Zimbabwe)
Registered Public Auditors
Angwa City
Cnr Julius Nyerere Way /
Kwame Nkrumah Avenue
P O Box 62 or 702
Harare
Zimbabwe
Tel: +263 4 750905-14 or 750979-83
Fax: +263 4 750707 or 773842
Email: admin@zw.ey.com
www.ey.com
Consequently, property values may be materially misstated, and we are unable to determine what
Independent Auditor’s Report
adjustments may be necessary to correctly account for these amounts. Our prior year audit report was also
modified due to this matter.
To the Shareholders of NMBZ Holdings Limited
Accounting for blocked funds
Report on the Audit of the consolidated and separate inflation adjusted financial statements
Included in Loans, advances and other assets of ZWL3 992 648 603 (2019: ZWL 3 824 449 644) on Note
Adverse Opinion
20.5 to the inflation adjusted consolidated financial statements for the year ended 31 December 2020 are
local balances denominated in the Bank’s functional currency. Of this, local balances amounting to ZWL13
We have audited the consolidated and separate inflation adjusted financial statements of NMBZ Holdings
840 412 which are held with the central bank have been treated as foreign currency and translated at the
Limited and its subsidiaries (the Group), as set out on pages 27 to 148, which comprise the consolidated
foreign auction exchange rate of 31 December 2020 in contravention of IAS 21 which defines ‘foreign
and separate inflation adjusted consolidated and separate statement of financial position as at 31
currency’ as a currency other than the functional currency of the entity resulting in an overstatement of the
December 2020, and the related inflation adjusted consolidated statement of profit or loss and other
balance. Our prior year audit report was also modified due to this matter.
comprehensive income, the inflation adjusted consolidated statement of changes in equity and the inflation
adjusted statement of cash flows for the year then ended, and notes to the inflation adjusted consolidated
Our opinion on the current period’s inflation adjusted consolidated financial statements is also modified
financial statements, including a summary of significant accounting policies and other explanatory notes.
because of the possible effects of the above matter on the comparability of the current period’s figures and
In our opinion, because of the significance of the matters discussed in the Basis for Adverse Opinion section
the corresponding figures.
of our report, the accompanying inflation adjusted financial statements do not present fairly the financial
Application of IAS29 - Financial Reporting in Hyperinflationary Economies
positions of the Group as at 31 December 2020, and their financial performance and their cash flows for
the year then ended in accordance with International Financial Reporting Standards (IFRSs) and Companies
Furthermore, notwithstanding that IAS 29 has been applied correctly, it is noted that its application was
and Other Business Entities Act (Chapter 24:31) and the Banking Act (Chapter 24:20).
based on prior and current periods’ financial information which was not in compliance with IAS 21 / IAS 8
Basis for Adverse Opinion
as described above. Had the correct base numbers and start date been used, Property and equipment stated
at ZWL2 218 171 535, intangible assets (ZWL 35 509 627), Deferred tax liabilities stated at
Non-compliance with International Financial Reporting Standards IAS 21- The Effects of Changes in
ZWL291 040 065 and all reserves on the inflation adjusted consolidated Statement of Financial Position
Foreign Exchange Rates in Prior Period and Inappropriate Application of IAS 8- Accounting Policies,
and all amounts on the inflation adjusted consolidated statement of comprehensive income except for
Changes in Accounting Estimates and Errors
interest income, interest expense, impairment losses and taxation would have been materially different.
Non-compliance with IAS 8
Overall Consequential Impacts
As explained in note 2.4.7 to the inflation adjusted consolidated financial statements, the Group changed
As no restatements have been recorded in current year per IAS8 to correct the above matters, our audit
its functional and reporting currency from United States Dollar (US$) to Zimbabwe Dollars (ZWL) on 22
report on the inflation adjusted consolidated financial statements for the year ended 31 December 2020 is
February 2019 in compliance with Statutory Instrument 33 of 2019.
modified for the following reasons;
We however believe that the change occurred on 1 October 2018 in terms of IAS21 given the significant
monetary and exchange control policy changes witnessed in Zimbabwe from 2016 through to 2019.
• All corresponding numbers remain misstated on the inflation adjusted consolidated Statement of
Financial Position (except for investment securities and share capital), Cash Flows Profit or Loss
Our audit report for the year ended 31 December 2019 was therefore modified as management
and Changes in Equity, this also impacts comparability of the current period’s figures,
prospectively applied the change in functional currency from USD to ZWL from 23 February 2019, which
we disagreed with. The correct approach would have been a retrospective restatement as a prior period
error in terms of International Financial Reporting Standards – IAS 8 – Accounting Polices, Changes in
Accounting Estimates and Errors.
• As opening balances enter into the determination of cash flows and performance, our audit report
is modified in respect of the impact of these matters on the inflation adjusted consolidated
Statement of Cash Flows, inflation adjusted consolidated Statement of Profit or Loss and inflation
adjusted consolidated Statement of Changes in Equity.
The effects of the above departures from IFRS are material and pervasive to the inflation adjusted
consolidated financial statements.
A member firm of the Ernst & Young Global Limited
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Inflation
adjusted consolidated financial statements section of our report. We are independent of the Company in
accordance with the International Code of Ethics for Professional Accountants (including International
Independence Standards) (IESBA Code) together with the ethical requirements that are relevant to our audit
of the financial statements in Zimbabwe, and we have fulfilled our ethical responsibilities in accordance with
these requirements and IESBA Code. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our adverse opinion.
22
20
24
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
Ernst & Young
Chartered Accountants (Zimbabwe)
Registered Public Auditors
Angwa City
Cnr Julius Nyerere Way /
Kwame Nkrumah Avenue
P O Box 62 or 702
Harare
Zimbabwe
Tel: +263 4 750905-14 or 750979-83
Fax: +263 4 750707 or 773842
Email: admin@zw.ey.com
www.ey.com
Key Audit Matters
Independent Auditor’s Report
Except for the matters described in the Basis for Adverse Opinion section, we have determined that there
are no key audit matters to communicate in our report.
To the Shareholders of NMBZ Holdings Limited
Other information
Report on the Audit of the consolidated and separate inflation adjusted financial statements
The directors are responsible for the other information. The other information comprises the Chairman’s
Adverse Opinion
Statement and the Directors’ Report and the Statement of Corporate Governance and Responsibility but
does not include the inflation adjusted consolidated financial statements and our auditor’s report thereon.
We have audited the consolidated and separate inflation adjusted financial statements of NMBZ Holdings
Our opinion on the inflation adjusted consolidated financial statements does not cover the other information
Limited and its subsidiaries (the Group), as set out on pages 27 to 148, which comprise the consolidated
and we do not express an audit opinion or any form of assurance conclusion thereon.
and separate inflation adjusted consolidated and separate statement of financial position as at 31
In connection with our audit of the inflation adjusted consolidated financial statements, our responsibility is
December 2020, and the related inflation adjusted consolidated statement of profit or loss and other
to read the other information and, in doing so, consider whether the other information is materially
comprehensive income, the inflation adjusted consolidated statement of changes in equity and the inflation
inconsistent with the inflation adjusted consolidated financial statements or our knowledge obtained in the
adjusted statement of cash flows for the year then ended, and notes to the inflation adjusted consolidated
audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we
financial statements, including a summary of significant accounting policies and other explanatory notes.
conclude that there is a material misstatement of this other information, we are required to report that fact.
As described in the Basis for Adverse Opinion section above, the Group did not comply with the requirements
In our opinion, because of the significance of the matters discussed in the Basis for Adverse Opinion section
of IAS 21 – Effects of Changes in Foreign Exchange Rates and IAS 8 Accounting Policies, Changes in
of our report, the accompanying inflation adjusted financial statements do not present fairly the financial
Accounting Estimates and Errors and we disagreed with the valuation of properties and the accounting
positions of the Group as at 31 December 2020, and their financial performance and their cash flows for
treatment of blocked funds as well as the application of IAS 29 - Financial Reporting in Hyperinflationary
the year then ended in accordance with International Financial Reporting Standards (IFRSs) and Companies
Economies on incorrect base numbers. We have concluded that the other information is materially misstated
and Other Business Entities Act (Chapter 24:31) and the Banking Act (Chapter 24:20).
for the same reasons.
Basis for Adverse Opinion
Responsibilities of the Directors for the Inflation adjusted Consolidated Financial Statements
Non-compliance with International Financial Reporting Standards IAS 21- The Effects of Changes in
The directors are responsible for the preparation and fair presentation of the inflation adjusted consolidated
Foreign Exchange Rates in Prior Period and Inappropriate Application of IAS 8- Accounting Policies,
financial statements in accordance with International Financial Reporting Standards and the requirements
Changes in Accounting Estimates and Errors
of the Companies and Other Business Entities Act (Chapter 24:31) and the Banking Act (Chapter 24:20),
and for such internal control as the directors determine is necessary to enable the preparation of inflation
Non-compliance with IAS 8
adjusted consolidated financial statements that are free from material misstatement, whether due to fraud
or error.
As explained in note 2.4.7 to the inflation adjusted consolidated financial statements, the Group changed
its functional and reporting currency from United States Dollar (US$) to Zimbabwe Dollars (ZWL) on 22
In preparing the inflation adjusted consolidated financial statements, the directors are responsible for
February 2019 in compliance with Statutory Instrument 33 of 2019.
assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the directors either intend to liquidate
We however believe that the change occurred on 1 October 2018 in terms of IAS21 given the significant
the Group or to cease operations, or have no realistic alternative but to do so.
monetary and exchange control policy changes witnessed in Zimbabwe from 2016 through to 2019.
Auditor’s Responsibilities for the Audit of the Inflation adjusted Consolidated Financial Statements
Our audit report for the year ended 31 December 2019 was therefore modified as management
prospectively applied the change in functional currency from USD to ZWL from 23 February 2019, which
Our objectives are to obtain reasonable assurance about whether the inflation adjusted consolidated
financial statements as a whole are free from material misstatement, whether due to fraud or error, and to
we disagreed with. The correct approach would have been a retrospective restatement as a prior period
issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is
error in terms of International Financial Reporting Standards – IAS 8 – Accounting Polices, Changes in
not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement
Accounting Estimates and Errors.
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken based
on these inflations adjusted consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional
A member firm of the Ernst & Young Global Limited
skepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the inflation adjusted consolidated financial
statements, whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is enough and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may
intentional omissions,
misrepresentations, or the override of internal control.
involve collusion, forgery,
22
25
21
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
Ernst & Young
Chartered Accountants (Zimbabwe)
Registered Public Auditors
Angwa City
Cnr Julius Nyerere Way /
Kwame Nkrumah Avenue
P O Box 62 or 702
Harare
Zimbabwe
Tel: +263 4 750905-14 or 750979-83
Fax: +263 4 750707 or 773842
Email: admin@zw.ey.com
www.ey.com
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
Independent Auditor’s Report
To the Shareholders of NMBZ Holdings Limited
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Report on the Audit of the consolidated and separate inflation adjusted financial statements
Adverse Opinion
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the inflation adjusted consolidated financial statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the Group to cease to continue as a going concern.
We have audited the consolidated and separate inflation adjusted financial statements of NMBZ Holdings
Limited and its subsidiaries (the Group), as set out on pages 27 to 148, which comprise the consolidated
and separate inflation adjusted consolidated and separate statement of financial position as at 31
December 2020, and the related inflation adjusted consolidated statement of profit or loss and other
comprehensive income, the inflation adjusted consolidated statement of changes in equity and the inflation
adjusted statement of cash flows for the year then ended, and notes to the inflation adjusted consolidated
financial statements, including a summary of significant accounting policies and other explanatory notes.
• Evaluate the overall presentation, structure and content of the inflation adjusted consolidated
financial statements, including the disclosures, and whether the inflation adjusted financial
statements represent the underlying transactions and events in a manner that achieves fair
presentation.
In our opinion, because of the significance of the matters discussed in the Basis for Adverse Opinion section
of our report, the accompanying inflation adjusted financial statements do not present fairly the financial
positions of the Group as at 31 December 2020, and their financial performance and their cash flows for
the year then ended in accordance with International Financial Reporting Standards (IFRSs) and Companies
and Other Business Entities Act (Chapter 24:31) and the Banking Act (Chapter 24:20).
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the inflation adjusted consolidated
financial statements. We are responsible for the direction, supervision and performance of the
Group audit. We remain solely responsible for our audit opinion.
Non-compliance with International Financial Reporting Standards IAS 21- The Effects of Changes in
Foreign Exchange Rates in Prior Period and Inappropriate Application of IAS 8- Accounting Policies,
We communicate with the directors regarding, among other matters, the planned scope and timing of the
Changes in Accounting Estimates and Errors
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
Non-compliance with IAS 8
Basis for Adverse Opinion
We also provide the directors with a statement that we have complied with relevant ethical requirements
As explained in note 2.4.7 to the inflation adjusted consolidated financial statements, the Group changed
regarding independence, and to communicate with them all relationships and other matters that may
its functional and reporting currency from United States Dollar (US$) to Zimbabwe Dollars (ZWL) on 22
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate
February 2019 in compliance with Statutory Instrument 33 of 2019.
threats or safeguards applied.
We however believe that the change occurred on 1 October 2018 in terms of IAS21 given the significant
From the matters communicated with the directors, we determine those matters that were of most
monetary and exchange control policy changes witnessed in Zimbabwe from 2016 through to 2019.
significance in the audit of the inflation adjusted consolidated financial statements of the current period and
Our audit report for the year ended 31 December 2019 was therefore modified as management
are therefore the key audit matters. We describe these matters in our auditor’s report unless law or
prospectively applied the change in functional currency from USD to ZWL from 23 February 2019, which
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
we disagreed with. The correct approach would have been a retrospective restatement as a prior period
determine that a matter should not be communicated in our report because the adverse consequences of
error in terms of International Financial Reporting Standards – IAS 8 – Accounting Polices, Changes in
doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Accounting Estimates and Errors.
The engagement partner on the audit resulting in this independent auditor’s report is Walter Mupanguri
(PAAB Practising Certificate Number 367)
A member firm of the Ernst & Young Global Limited
Ernst & Young
Chartered Accountants (Zimbabwe)
Registered Public Audit
Auditors
Harare
Date: 29 March 2021
22
22
26
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
STATEMENTS OF COMPREHENSIVE INCOME
for year ended 31 December 2020
Inflation Adjusted
GROUP
COMPANY
Note
4
5
6.1
6.2
7
20.3
8.1
31 Dec
2020
ZWL
760 901 869
(142 992 756)
--------------------
617 909 113
1 131 552 573
128 836 005
--------------------
1 878 297 691
257 605 427
--------------------
2 135 903 118
(1 274 247 625)
--------------------
31 Dec
2019
ZWL
Restated
808 407 006
(231 899 654)
-------------------
576 507 352
821 825 071
1 143 047 353
-------------------
2 541 379 776
505 136 261
-------------------
3 046 516 037
(1 079 026 942)
-------------------
31 Dec
2020
ZWL
-
-
-------------------
-
-
-
-------------------
-
-
-------------------
-
2 672 327
-------------------
31 Dec
2019
ZWL
Restated
-
-
------------------
-
-
-
------------------
-
89 430 085
------------------
89 430 085
(294 545)
------------------
861 655 493
1 967 489 095
2 672 327
89 135 540
(127 974 740)
(28 266 471)
--------------------
705 414 282
143 848 660
--------------------
849 262 942
(49 562 276)
(1 226 609 016)
-------------------
691 317 803
(314 097 585)
-------------------
377 220 218
-
39 608 059
-------------------
42 280 386
(47 064)
-------------------
42 233 322
-
304 465 013
------------------
393 600 553
(60 640)
------------------
393 539 913
6.3
181 026 875
487 104 622
-
-
6.3
9.3
9.3
9.3
-
--------------------
1 030 289 817
===========
287 529 426
-------------------
1 151 854 266
===========
-
-------------------
42 233 322
===========
-
------------------
393 539 913
===========
210.12
198.37
208.41
96.49
90.92
95.21
Interest income
Interest expense
Net interest income
Fee and commission income
Net foreign exchange gains
Revenue
Other income
Operating income
Operating expenditure
Operating income before impairment charge
and loss on net monetary position
Impairment losses on financial assets
measured at amortised cost
(Loss)/gain on net monetary position
Profit before taxation
Taxation credit/(charge)
Profit for the period
Other comprehensive income
Items that will not be reclassified to profit or loss
Revaluation of land and buildings, net of tax
Items that may be reclassified to profit or loss
Translation gain on change in financial currency,
net of tax
Total comprehensive income for the year
Earnings per share (ZWL cents)
- Basic
- Diluted
- Headline
23
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
STATEMENTS OF COMPREHENSIVE INCOME (Cont’d)
for year ended 31 December 2020
Historical*
GROUP
COMPANY
31 Dec
2020
ZWL
31 Dec
2019
ZWL
31 Dec
2020
ZWL
31 Dec
2019
ZWL
501 216 271
(90 638 279)
--------------------
410 577 992
815 541 357
217 274 144
---------------------
1 443 393 493
1 226 846 996
---------------------
2 670 240 489
(814 190 000)
---------------------
1 856 050 489
70 557 190
(16 894 088)
-------------------
53 663 102
87 242 303
99 863 112
--------------------
240 768 517
206 622 639
--------------------
447 391 156
(105 937 502)
--------------------
341 453 654
-
-
-------------------
-
-
-
--------------------
-
-
--------------------
-
62 563
--------------------
62 563
-
-
------------------
-
-
-
------------------
-
3 772 370
------------------
3 772 370
(12 425)
-------------------
3 759 945
(127 974 740)
---------------------
1 728 075 749
85 514 320
--------------------
1 813 590 069
(11 048 567)
--------------------
330 405 087
(44 504 548)
--------------------
285 900 539
-
--------------------
62 563
-
-------------------
62 563
-
-------------------
3 759 945
9 152
-----------------
3 769 097
Note
4
5
6.1
6.2
7
8.1
6.3
891 186 492
175 943 209
-
-
6.3
9.3
9.3
9.3
-
-------------------
2 704 776 561
===========
11 619 648
-------------------
473 463 396
===========
-
-------------------
62 563
-
-------------------
3 769 097
=========== ===========
448.72
423.62
443.72
73.13
67.52
72.73
Interest income
Interest expense
Net interest income
Fee and commission income
Net foreign exchange gains
Revenue
Other income
Operating income
Operating expenditure
Operating income before impairment charge
Impairment losses on financial assets measured
at amortised cost
Profit before taxation
Taxation credit/(charge)
Profit for the period
Other comprehensive income
Items that will not be reclassified to profit or loss
Revaluation of land and buildings, net of tax
Items that may be reclassified to profit or loss
Translation gain on change in functional
currency, net of tax
Total comprehensive income for the year
Earnings per share (ZWL cents)
- Basic
- Diluted
- Headlines
*The historical cost information has been shown as supplementary information for the benefit of users. These are not required in terms of
International Accounting Standard (IAS) 29 “Financial Reporting in Hyperinflationary Economies”. The auditors have not expressed an opinion
on the historical cost information.
24
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
STATEMENTS OF FINANCIAL POSITION
as at 31 December 2020
SHAREHOLDERS’ FUNDS
Share capital
Capital reserves
Functional currency translation reserve
Revaluation reserves
Retained earnings
Total equity
Redeemable ordinary shares
Subordinated term loan
Total shareholders’ funds and
shareholders’ liabilities
LIABILITIES
Deposits and other liabilities
Deferred tax liabilities
Current tax liabilities
Total shareholders’ funds and liabilities
ASSETS
Cash and cash equivalents
Current tax assets
Investment securities
Loans, advances and other assets
Trade and other investments
Group companies
Investment properties
Intangible assets
Property and equipment
Deferred tax assets
Total assets
Note
10.2.1
11
11
12
13
14
16.1
18
8.3
19
8.3
17.1
20
21
22.1
23
24
25
18
GROUP
COMPANY
Inflation adjusted
31 Dec
2020
ZWL
31 Dec
2019
ZWL
Restated
31 Dec
2020
ZWL
31 Dec
2019
ZWL
Restated
3 574 680
3 574 680
759 195 015
756 522 688
287 529 426
287 529 426
487 104 622
668 131 497
2 332 246 830
1 482 983 888
-------------------- ---------------------
3 020 387 631
4 048 005 121
64 305 875
14 335 253
127 220 391
132 632 641
-------------------- ---------------------
3 574 680
756 522 688
-
-
516 136 635
-------------------
1 276 234 003
14 335 253
-
3 574 680
759 195 015
-
-
473 903 313
-------------------
1 236 673 008
64 305 875
-
------------------- --------------------
4 194 973 015
--------------------
3 211 913 897
--------------------
1 290 569 256 1 300 978 883
-------------------- --------------------
6 413 943 465
291 040 065
57 205 065
5 652 133 875
505 497 805
2 803 378
--------------------- ---------------------
10 957 161 610 9 372 348 955
============ ============
1 857 750
414 135
-
-
-
-
--------------------- ---------------------
1 290 983 391 1 302 836 633
============ ============
1 964 637 240
-
1 081 820 457
3 992 648 603
10 877 672
-
1 653 496 476
35 509 627
2 218 171 535
-
2 208 405 864
-
480 731 899
3 824 449 644
7 231 788
-
1 031 154 579
52 097 749
1 768 277 432
-
--------------------- ---------------------
10 957 161 610 9 372 348 955
============ ============
13 635
75 518
-
2 531 106
-
1 288 349 628
-
-
-
13 504
---------------------
61 165
338 772
-
14 026 500
-
1 288 349 628
-
-
-
60 568
-------------------
1 290 983 391 1 302 836 633
============ ===========
----------------------------
MR. B. A. CHIKWANHA
---------------------------
MR. B. P. WASHAYA
10 March 2021
Directors
------------------------
MISS. S. PASHAPA
Company Secretary
10 March 2021
25
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
STATEMENTS OF FINANCIAL POSITION (Cont’d)
as at 31 December 2020
SHAREHOLDERS’ FUNDS
Share capital
Capital reserves
Functional currency translation reserve
Revaluation reserves
Retained earnings
Total equity
Redeemable ordinary shares
Subordinated term loan
Total shareholders’ funds and
shareholders’ liabilities
LIABILITIES
Deposits and other liabilities
Deferred tax liabilities
Current tax liabilities
Total shareholders’ funds and liabilities
ASSETS
Cash and cash equivalents
Current tax assets
Investment securities
Loans, advances and other assets
Trade and other investments
Group companies
Investment properties
Intangible assets
Property and equipment
Deferred tax assets
Total assets
Note
10.2.1
11
11
12
13
14
15
16.1
18
8.3
19
8.3
17.1
20
21
22.1
23
24
25
18
GROUP
COMPANY
Historical*
31 Dec
2020
ZWL
31 Dec
2019
ZWL
31 Dec
2020
ZWL
31 Dec
2019
ZWL
84 116
19 121 607
11 619 648
1 067 266 442
2 143 095 638
--------------------
3 241 187 451
14 335 253
132 632 641
84 116
19 184 170
11 619 648
176 079 950
329 505 569
-------------------
536 473 453
14 335 253
28 360 340
-------------------- ---------------------
84 116
19 121 607
-
-
169 661
--------------------
19 375 384
14 335 253
-
84 116
19 184 170
-
-
107 098
--------------------
19 375 384
14 335 253
-
------------------- --------------------
3 388 155 345
--------------------
579 169 046
--------------------
33 710 637
33 710 637
-------------------- --------------------
6 413 943 465
174 727 794
57 205 065
-------------------
1 268 146 016
97 653 191
624 937
-------------------
414 135
-
-
-------------------
414 135
-
-
-------------------
10 034 031 669 1 945 593 190
============ ============
34 124 772
34 124 772
============ ============
1 964 637 240
-
1 081 820 457
3 730 886 733
10 877 672
-
1 653 496 476
4 133 707
1 588 179 384
-
492 304 267
-
107 166 155
817 960 242
1 612 131
-
229 867 982
1 397 186
295 285 227
-
--------------------- ---------------------
10 034 031 669
1 945 593 190
============ ============
13 635
75 518
-
2 531 106
-
31 491 009
-
-
-
13 504
---------------------
34 124 772
13 635
75 518
-
2 531 106
-
31 491 009
-
-
-
13 504
-------------------
34 124 772
============ ===========
*The historical cost information has been shown as supplementary information for the benefit of users. These are not required in terms of
International Accounting Standard (IAS) 29 “Financial Reporting in Hyperinflationary Economies”. The auditors have not expressed an
opinion on the historical cost information.
----------------------------
MR. B. A. CHIKWANHA
---------------------------
MR. B. P. WASHAYA
10 March 2021
26
Directors
------------------------
MISS. S. PASHAPA
Company Secretary
10 March 2021
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
STATEMENT OF CHANGES IN EQUITY
for year ended 31 December 2020
GROUP
Inflation Adjusted
Functional
Currency
Share Translation
Reserve
ZWL
Premium
ZWL
Share
Capital
ZWL
3 486 812
-
728 690 606
-
-
87 868
-
-
27 832 082
-
-
-
-
-
-
Share
Option Revaluation
Reserve
ZWL
Reserve
ZWL
Retained
Earnings
ZWL
Total
ZWL
2 672 327
-
- 1 133 683 620 1 868 533 365
377 220 218
-
377 220 218
-
-
-
487 104 622
-
-
-
(27 919 950)
487 104 622
27 919 950
(27 919 950)
-
-------------
----------------
- 287 529 426
----------------
-
---------------
-
----------------
-
-----------------
287 529 426
-----------------
3 574 680
-
756 522 688
-
287 529 426
-
2 672 327
-
487 104 622 1 482 983 888 3 020 387 631
849 262 942
849 262 942
-
-
-
-------------
-
-
-----------------
-
-
----------------
-
(2 672 327)
----------------
181 026 875
-
-
-
----------------- ------------------
181 026 875
(2 672 327)
------------------
3 574 680
========
756 522 688 287 529 426
========== ==========
- 668 131 497 2 332 246 830 4 048 005 121
========= ========== =========== ===========
Balances at 1 January 2019
Profit for the year
Revaluation of land and buildings,
net of tax
Share issue – scrip dividend
Dividends paid
Translation gain on change
in functional currency,
net of tax
Restated balances at
1 January 2020
Profit for the year
Revaluation of land and buildings,
net of tax
Unwinding of share option reserve
Balances at
31 December 2020
GROUP
Historical Cost*
Functional
Currency
Share Translation
Reserve
ZWL
Premium
ZWL
Share
Capital
ZWL
80 975
-
16 463 734
-
-
-
-
-
-
-
3 141
-
------------
84 116
-
2 657 873
-
----------------
19 121 607
11 619 648
-
-
----------------
11 619 648
Share
Option Revaluation
Reserve
ZWL
Reserve
ZWL
Retained
Earnings
ZWL
Total
ZWL
62 563
-
136 741
47 377 400
285 900 539
64 121 413
285 900 539
-
175 943 209
-
175 943 209
-
-
-
-------------
-
-
(3 772 370)
-----------------
62 563 176 079 950 329 505 569
-
-
-
----------------
11 619 648
2 661 014
(3 772 370)
----------------
536 473 453
-
-
-
-
-
-
(62 563)
-
-
(62 563)
-
- 1 813 590 069 1 813 590 069
-
------------
84 116
=======
-
-----------------
19 121 607
==========
-
-----------------
11 619 648
=========
-
--------------
891 186 492
-
----------------- ------------------
891 186 492
------------------
- 1 067 266 442 2 143 095 638 3 241 187 451
======== =========== ========== ===========
Balances at 1 January 2019
Profit for the year
Revaluation of land
and buildings, net of tax
Translation gain on change
in functional currency,
net of tax
Share issue – scrip dividend
Dividends paid
Balances at 31 December 2019
Unwinding of share option reserve
Profit for the year
Revaluation of land and buildings,
net of tax
Balances at 31 December 2020
*The historical cost information has been shown as supplementary information for the benefit of users. These are not required in terms of
International Accounting Standard (IAS) 29 “Financial Reporting in Hyperinflationary Economies”. The auditors have not expressed an
opinion on the historical cost information.
27
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
STATEMENT OF CHANGES IN EQUITY
for year ended 31 December 2020
COMPANY
Inflation Adjusted
Balances at 1 January 2019
Profit for the year
Share issue – scrip dividend
Dividends paid
Balances at 31 December 2019
Total comprehensive income for the year
Unwinding of share option reserve
Balances at 31 December 2020
Share
Capital
ZWL
Share
Premium
ZWL
Share
Option Revaluation
Reserve
ZWL
Reserve
ZWL
Retained
Earnings
ZWL
Total
ZWL
3 486 812
-
87 868
-
-------------
3 574 680
728 690 606
-
27 832 082
-
----------------
756 522 688
2 672 327
-
-
-
----------------
2 672 327
-
-
-
-
----------------
-
843 133 095
108 283 350
393 539 913
393 539 913
27 919 950
-
(27 919 950)
(27 919 950)
-----------------
-----------------
473 903 313 1 236 673 008
-
-
-
-
--------------
-----------------
3 574 680 756 522 688
======== ==========
-
-
----------------
-
(2 672 327)
----------------
-
42 233 322
(2 672 327)
------------------
- 516 136 635 1 276 234 003
========= ========== =========== ===========
42 233 322
-
-----------------
COMPANY
Historical Cost*
Functional
Currency
Share Translation
Reserve
ZWL
Premium
ZWL
Share
Capital
ZWL
Share
Option Revaluation
Reserve
ZWL
Reserve
ZWL
Retained
Earnings
ZWL
Total
ZWL
80 975
-
16 463 734
-
-
-
62 563
-
-
-
110 372
3 769 097
16 717 644
3 769 097
-
3 141
-
------------
84 116
-
-
------------
84 116
=======
-
2 657 873
-
----------------
19 121 607
-
-
-----------------
19 121 607
==========
-
-
-
----------------
62 563
(62 563)
-
----------------
-
=========
-
-
-
-------------
-
-
-
----------------
-
-
2 661 014
(3 772 371)
----------------
19 375 384
(62 563)
62 563
----------------
19 375 384
======== =========== ========== ===========
-
-
(3 772 371)
-----------------
107 098
-
62 563
----------------
169 661
-
-
-
----------------
-
-
-
---------------
-
Balances at 1 January 2019
Profit for the year
Revaluation of land and buildings,
net of tax
Share issue – scrip dividend
Dividends paid
Balances at 31 December 2019
Unwinding of share option reserve
Profit for the year
Balances at 31 December 2020
*The historical cost information has been shown as supplementary information for the benefit of users. These are not required in terms of
International Accounting Standard (IAS) 29 “Financial Reporting in Hyperinflationary Economies”. The auditors have not expressed an
opinion on the historical cost information.
28
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
STATEMENT OF CASHFLOWS
for year ended 31 December 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation
Non-cash items:
- Depreciation(excluding right of use assets) (note 7)
- Depreciation –Right of use assets (note 7)
- Amortisation of intangible assets (note 7)
- Impairment losses on financial assets measured
at amortised costs
- Investment properties fair value gains (note 23)
- Trade and other investments fair value gains
adjustment (note 21)
- Profit on disposal of property and equipment
- Loss/(profit) on disposal of investment properties
- Interest capitalised on subordinated loan (note 14)
- Dividend received
- Unrealised foreign exchange gain
- Unwinding of share option reserve
Inflation Adjusted
GROUP COMPANY
31 Dec
2020
ZWL
31 Dec
2019
ZWL
Restated
31 Dec
2020
ZWL
31 Dec
2019
ZWL
705 414 282
691 317 803
42 280 386
393 539 913
69 161 843
11 116 446
24 416 805
69 204 253
13 854 547
28 513 215
127 974 740
(228 646 579)
49 562 276
(419 983 776)
-
-
-
-
-
-
-
-
-
-
(3 645 884)
(7 881 999)
2 198 385
-
-
(204 729 321)
-
---------------------
(4 097 075)
-
(2 620 407)
16 955 691
-
(414 431 455)
-
-------------------
-
-
-
-
-
-
(2 672 327)
--------------------
-
-
-
-
(89 430 085)
-
-
-------------------
Operating cash flows before changes in operating
assets and liabilities
Changes in operating assets and liabilities
Increase/(decrease) in deposits and other liabilities
2 911 107 623
(Increase)/decrease in loans, advances and other assets (2 755 618 219)
---------------------
650 868 122
---------------------
Net cash generated/(used) from operations
495 378 718
28 275 072
39 608 059
304 109 828
(8 413 499 169)
4 407 969 090
-------------------
(3 977 255 007)
-------------------
(51 103 453)
11 495 394
--------------------
-
--------------------
(12 660 389)
(354 956 149)
--------------------
(63 506 711)
--------------------
TAXATION
Tax on dividends paid
Corporate tax paid
Net cash (outflow)/inflow from operations
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of intangible assets (note 24)
Disposal/(Acquisition) of investment securities
Proceeds on disposal of property and equipment
Acquisition of property and equipment (note 25)
Proceeds on disposal of investment properties
Acquisition of investment properties (note 23)
Dividends received
Net cash generated/(used) in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of interest on subordinated term loan (note 14)
Repayment of lease liabilities (note 16.4)
Cash dividend paid
Share issue costs – scrip dividend
Net cash outflow from financing activities
Net decrease in cash and cash equivalents
Net foreign exchange and monetary adjustments on
cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at the end of the year
-
(85 059 033)
---------------------
565 809 089
---------------------
(5 565 825)
(65 138 185)
---------------------
(4 047 959 017)
---------------------
-
-
--------------------
-
--------------------
(5 565 826)
-
--------------------
(69 072 537)
--------------------
(7 828 681)
(974 654 302)
10 309 948
(255 160 354)
15 381 940
(411 275 642)
-
---------------------
(1 623 227 091)
---------------------
(2 857 048)
2 786 293 086
-
(158 457 976)
26 415 943
(8 698 276)
-
--------------------
2 642 695 729
--------------------
-
-
-
-
-
-
-
--------------------
-
---------------------
-
-
-
-
-
-
89 430 086
--------------------
20 357 549
--------------------
(3 602 420)
-
(18 782 170)
(30 928 423)
(19 739 519)
-
(618 030)
-
-------------------
---------------------
(42 742 139)
(30 928 423)
---------------------
-------------------
(1 088 346 425) (1 448 005 427)
-
-
-
-
--------------------
-
--------------------
-
-
-
(19 739 518)
(618 031)
--------------------
(20 357 549)
--------------------
-
844 577 801
2 208 405 864
---------------------
1 964 637 240
============
523 370 450
3 133 040 841
-------------------
2 208 405 864
===========
(47 530)
61 165
--------------------
13 635
===========
318 759
379 924
-------------------
61 165
===========
Additional information on operational cashflows on interest
Interest received
Interest paid (including interest on lease liabilities)
729 123 038
(116 012 408)
757 446 936
(215 571 870)
-
-
-
-
29
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
STATEMENT OF CHANGES IN EQUITY
for year ended 31 December 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation
Non-cash items:
- Depreciation (excluding right of use assets) (note 7)
- Depreciation – Right of use assets (note 7)
- Amortisation of intangible assets (note 7)
- Impairment losses on financial assets measured
at amortised costs
- Investment properties fair value adjustment (note 23)
- Trade and other investments fair value adjustment
- Profit on disposal of property and equipment
- Profit on disposal of investment properties
- Interest capitalised on subordinated loan (note 14)
- Impairment reversal on land and building
- Unrealised foreign exchange gain
- Dividends received
- Unwinding of share option reserve
Historical Cost*
GROUP COMPANY
31 Dec
2020
ZWL
31 Dec
2019
ZWL
31 Dec
2020
ZWL
31 Dec
2019
ZWL
1 728 075 749
330 405 087
62 563
3 759 945
22 310 284
8 579 715
915 580
2 307 360
1 310 867
733 909
-
-
-
-
-
-
127 974 740
(1 182 737 157)
(9 265 541)
(7 091 399)
(10 867 431)
-
-
(204 729 321)
-
-
11 048 567
(194 387 322)
(1 499 630)
-
(584 149)
1 151 954
(40 600)
(92 386 267)
-
-
---------------------- ----------------------
-
-
-
-
-
-
-
-
-
(62 563)
----------------------
-
-
-
-
-
-
-
-
(3 772 371)
-
----------------------
Operating cash flows before changes in operating
assets and liabilities
Changes in operating assets and liabilities
Increase/(decrease) in deposits and other liabilities
2 911 107 622
(Increase)/decrease in loans, advances and other assets (1 356 425 376)
---------------------
2 027 847 465
---------------------
Net cash generated/(used) from operations
473 165 219
58 059 776
-
(12 426)
552 444 546
(326 882 932)
-------------------
283 621 390
-------------------
-
-
--------------------
-
--------------------
(118 344)
(2 530 243)
--------------------
(2 661 013)
--------------------
TAXATION
Tax on dividends paid
Corporate tax paid
Net cash (outflow)/inflow from operations
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of intangible assets (note 24)
(Acquisition)/disposal/of investment securities
Proceeds on disposal of property and equipment
Acquisition of property and equipment (note 25)
Proceeds on disposal of investment properties
Acquisition of investment properties (note 23)
Dividends received
Net cash generated/(used) in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of interest on subordinated term loan
Repayment of lease liabilities
Cash dividend paid
Share issue costs – scrip dividend
Net cash outflow from financing activities
Net increase in cash and cash equivalents
Net foreign exchange and monetary adjustments on
cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at the end of the year
-
(73 473 484)
---------------------
1 954 373 981
---------------------
(247 740)
(9 079 118)
---------------------
274 294 532
---------------------
-
-
--------------------
-
--------------------
(247 740)
-
--------------------
(2 908 753)
--------------------
(3 652 103)
(974 654 302)
7 122 008
(110 752 486)
15 381 940
(245 405 846)
-
---------------------
(1 311 960 789)
---------------------
-
(14 658 020)
-
-
---------------------
(14 658 020)
---------------------
627 755 172
(94 320)
10 083 280
-
(24 308 497)
5 888 719
(351 515)
-
--------------------
(8 782 333)
--------------------
(180 450)
(1 276 043)
(832 659)
(30 958)
-------------------
(2 320 110)
-------------------
263 192 089
-
-
-
-
-
-
-
--------------------
-
---------------------
-
-
-
-
-
-
3 772 371
--------------------
3 772 371
--------------------
-
-
-
-
--------------------
-
--------------------
-
-
-
(832 659)
(30 958)
--------------------
(863 617)
--------------------
-
844 577 801
492 304 267
---------------------
1 964 637 240
============
116 671 266
112 440 912
-------------------
492 304 267
===========
-
13 635
--------------------
13 635
===========
-
13 635
-------------------
13 635
===========
Additional information on operational cashflows on interest
Interest received
Interest paid (including interest on lease liabilities)
469 437 446
(63 657 930)
65 548 752
(15 089 895)
-
-
-
-
*The historical cost information has been shown as supplementary information for the benefit of users. These are not required in terms of
International Accounting Standard (IAS) 29 “Financial Reporting in Hyperinflationary Economies”. The auditors have not expressed an
opinion on the historical cost information.
30
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
SIGNIFICANT ACCOUNTING POLICIES
for year ended 31 December 2020
BUSINESS COMBINATIONS
Business combinations are accounted for using the acquisition method as at the acquisition date – i.e. when control is
transferred to the Group. The consideration transferred in the acquisition is generally measured at fair value, as are the
identifiable net assets acquired.
Subsidiaries
Subsidiaries are those investees controlled by the Group. The Group controls an investee if it is exposed to, or has rights
to variable returns from its involvement with the investee and has the ability to affect those returns through its power over
the subsidiary. The financial statements of subsidiaries are included in the consolidated financial statements, using the
acquisition method, from the date that control effectively commences until the date that control effectively ceases.
In the holding company’s separate financial statements, investment in subsidiaries are accounted for at cost.
Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profit or loss
immediately. Transaction costs are expensed as incurred, except if they are related to the issue of debt or equity securities.
Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration
is classified as equity, then it is not re-measured and settlement is accounted for within equity. Otherwise subsequent
changes in the fair value of the contingent consideration are recognised in profit or loss.
Loss of control
When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related
non-controlling interests (NCI) and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any
interest retained in the former subsidiary is measured at fair value when control is lost.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial statements. Unrealised losses are eliminated in the same way as
unrealised gains, but only to the extent that there is no evidence of impairment.
FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currencies are translated into Zimbabwe Dollars (ZWL), which is the respective functional currency
of Group entities at the spot exchange rates at the date of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated into the functional
currency at the spot exchange rate at that date. The foreign currency gain or loss on monetary items is the difference
between the amortised cost in the functional currency at the beginning of the year, adjusted for effective interest and
payments during the year, and the amortised cost in the foreign currency translated at the spot exchange rate at the end
of the year.
Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional
currency at the spot exchange rate at the date on which the fair value is determined. Non-monetary items that are measured
based on historical cost in a foreign currency are translated using the spot exchange rate at the date of the transaction.
Foreign currency differences arising on translation are generally recognised in profit or loss.
TAXATION
Income tax
Income tax expenses comprise current, capital gains and deferred tax. Income tax is recognised in profit or loss except to
the extent that it relates to items recognised directly in equity or in other comprehensive income.
Current tax
Current tax comprises expected tax payable or receivable on the taxable income or loss for the year and any adjustment
to the tax payable or receivable in respect of previous years. It is measured using rates enacted or substantively enacted
at the reporting date in the country where the Group operates and generates taxable income and any adjustment to tax
payable in respect of previous years.
Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from
or paid to the taxation authorities.
31
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
for year ended 31 December 2020
TAXATION (cont’d)
Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:
•
•
•
temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit or loss;
temporary differences related to investments in subsidiaries to the extent that it is probable that they will not
reverse in the foreseeable future; and
taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the
extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets are
reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will
be realised. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they
reverse, using tax rates enacted or substantively enacted at the reporting date.
The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Group expects,
at the reporting date, to recover or settle the carrying amount of its assets and liabilities. For this purpose, the carrying
amount of investment property measured at fair value is presumed to be recovered through sale, and the Group has not
rebutted this presumption.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets,
and they relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they
intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
Additional taxes that arise from the distribution of dividends by the Bank are recognised at the same time as the liability to
pay the related dividend is recognised. These amounts are generally recognised in profit or loss because they generally
relate to income arising from transactions that were originally recognised in profit or loss.
FINANCIAL INSTRUMENTS
Measurement Methods
Amortised cost and effective interest rates
The amortised cost is the amount at which the financial asset or financial liability is measured at initial recognition minus
the principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference
between that initial amount and the maturity amount and, for financial assets, an adjustment for any loss allowance.
The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected
life of the financial asset or financial liability to the gross carrying amount of a financial asset (i.e. its amortised cost before
any impairment allowance) or to the amortised cost of a financial liability. The calculation does not consider expected credit
losses and includes transaction costs, premiums or discounts and fees and points paid or received that are integral to the
effective interest rate, such as origination fees. For purchased or originated credit-impaired (‘POCI’) financial assets –
assets that are credit-impaired at initial recognition - the Bank calculates the credit-adjusted effective interest rate, which
is calculated based on the amortised cost of the financial asset instead of its gross carrying amount and incorporates the
impact of expected credit losses in estimated future cash flows.
When the Bank revises the estimates of future cash flows, the carrying amount of the respective financial assets or
financial liability is adjusted to reflect the new estimate discounted using the original effective interest rate. Any changes are
recognised in profit or loss.
Interest Income
Interest income is calculated by applying the effective interest rate to the gross carrying amount of financial assets, except
for:
a)
b)
Purchased or originated credit-impaired (POCI) financial assets, for which the original credit-adjusted
effective interest rate is applied to the amortised cost of the financial asset.
Financial assets that are not ‘POCI’ but have subsequently become credit-impaired (or ‘stage 3’), for
which interest revenue is calculated by applying the effective interest rate to their amortised cost (i.e net
of the expected credit loss provision)
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions of the
instrument. Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Bank
commits to purchase or sell the asset.
32
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
for year ended 31 December 2020
FINANCIAL INSTRUMENTS (continued)
Initial recognition and measurement
At initial recognition, the Bank measures a financial asset or financial liability at its fair value plus or minus, in the case
of a financial asset or financial liability not at fair value through profit or loss; transaction costs that are incremental and
directly attributable to the acquisition or issuance of the financial asset or financial liability respectively, such as fees and
commissions. Transaction costs of financial assets and financial liabilities carried at fair value through profit or loss are
expensed in profit or loss. Immediately after initial recognition, an expected credit loss allowance (ECL) is recognised for
financial assets measured at amortised cost and investments in debt instruments measured at FVOCI, which results in an
accounting loss being recognised in profit or loss when an asset is newly originated.
When the fair value of financial assets and liabilities differs from the transaction price on initial recognition, the entity
recognises the difference as follows:
a). When the fair value is evidenced by a quoted price in an active market for an identical asset or liability (i.e. a
Level 1 input) or based on a valuation technique that uses only data from observable markets, the difference is
recognised as a gain or loss.
b).
In all other cases, the difference is deferred and the timing of recognition of deferred day one profit or loss is
determined individually. It is either amortised over the life of the instrument, deferred until the instrument’s fair
value can be determined using market observable inputs, or realised through settlement.
Financial Assets
(i)
Classification and subsequent measurement
From 1 January 2018, the Group has applied IFRS 9 and classifies its financial assets in the following measurement
categories:
•
•
•
Fair value through profit or loss (FVPL);
Fair value through other comprehensive income (FVOCI); or
Amortised cost.
The classification requirements for debt and equity instruments are described below:
Debt instruments
Debt instruments are those instruments that meet the definition of a financial liability from the issuer’s perspective, such
as loans, government and corporate bonds and trade receivables purchased from clients in factoring arrangements without
recourse.
Classification and subsequent measurement of debt instruments depend on:
•
•
the Bank’s business model for managing the asset; and
the cash flow characteristics of the asset.
Based on these factors, the Bank classifies its debt instruments into one of the following three measurement categories:
•
•
•
Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent
solely payments of principal and interest (‘SPPI’), and that are not designated at FVPL, are measured at
amortised cost. The carrying amount of these assets is adjusted by any expected credit loss allowance.
Interest income from these financial assets is included in interest and similar income using the effective
interest rate method.
Fair value through other comprehensive income (FVOCI): Financial assets that are held for collection of
contractual cash flows and for selling the assets, where the assets’ cash flows represent solely payments
of principle and interest and that are not designated at FVPL, are measured at fair value through other
comprehensive income (FVOCI). Movements in the carrying amount are taken through OCI, except for the
recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses on the
instrument’s amortised cost which are recognised in profit or loss. When the financial asset is derecognised,
the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and
recognised in “Net Investment Income’. Interest income from these financial assets is included in ‘Interest
Income’ using the effective interest rate method.
Fair value through profit or loss: Assets that do not meet the criteria for amortised cost or FVOCI are measured
at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at
fair value through profit or loss and is not part of a hedging relationship is recognised in profit or loss and
presented in the profit or loss statement within ‘Net Trading Income” in the period in which it arises, unless
it arises from debt instruments that were designated at fair value or which are not held for trading, in which
case they are presented separately in ‘Net Investment Income’. Interest income from these financial assets is
included in “Interest income” using the effective interest rate method.
33
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
for year ended 31 December 2020
FINANCIAL INSTRUMENTS (continued)
Debt instruments (continued)
Business model: the business model reflects how the Bank manages the assets in order to generate cash flows. That is,
whether the Bank’s objective is solely to collect the contractual cash flows from the assets or is to collect both the contractual
cash flows and cash flows arising from the sale of assets. If neither of these is applicable (e.g. financial assets are held for
trading purposes), then the financial assets are classified as part of ‘other’ business model and measured at FVPL. Factors
considered by the Bank in determining the business model for a group of assets include past experience on how the cash
flows for these assets were collected, how the asset’s performance is evaluated and reported to key management personnel,
how risks are assessed and managed and how managers are compensated. Securities held for trading are held principally
for the purpose of selling in the near term or are part of a portfolio of financial instruments that are managed together and
for which there is evidence of a recent actual pattern of short-term profit-taking. These securities are classified in the ‘other’
business model and measured at FVPL.
Where the business model is to hold assets to collect contractual cash flows or to collect contractual cash flows and sell,
the Bank assesses whether financial instruments’ cash flows represent solely payments of principal and interest (the “SPPI”
test). In making this assessment, the Bank considers whether the contractual cash flows are consistent with a basic lending
arrangement i.e. interest includes only consideration for the time value of money, credit risk, other basic lending risks and a
profit margin that is consistent with a basic lending arrangement. Where the contractual terms introduce exposure to risk or
volatility that are inconsistent with a basic lending arrangement, the related financial asset is classified and measured at fair
value through profit or loss.
The Bank reclassifies debt investments when and only when its business model for managing those assets changes. The
reclassification takes place from the start of the first reporting period following the change. Such changes are expected to be
very infrequent and none occurred during the period.
Equity instruments
Equity instruments are instruments that meet the definition of equity from the issuer’s perspective; that is, instruments that
do not contain a contractual obligation to pay and that evidence a residual interest in the issuer’s net assets. Examples of
equity instruments include basic ordinary shares.
The Bank subsequently measures all equity investments at fair value through profit or loss, except where the Bank’s
management has elected, at initial recognition, to irrevocably designate an equity investment at fair value through other
comprehensive income. The Bank policy is to designate equity investments as FVOCI when those investments are held for
purposes other than to generate investment returns. When this election is used, fair value gains and losses are recognised
in OCI and are not subsequently reclassified to profit or loss, including on disposal. Impairment losses (and reversal of
impairment losses) are not reported separately from other changes in fair value. Dividends, when representing a return on
such investments, continue to be recognised in profit or loss as other income when the Bank’s right to receive payments is
established.
Gains and losses on equity investments at FVPL are included in the ‘Other Income’ line in the statement of profit or loss.
(ii)
Impairment
The Bank recognises loss allowances for Expected Credit Losses (ECLs) on the following financial instruments that are not
measured at Fair Value through Profit or Loss (FVTPL):
•
•
•
•
•
•
loans and advances to banks;
loans and advances to customers;
debt investment securities;
lease receivables;
loan commitments issued; and
financial guarantee contracts issued.
No impairment loss is recognised on equity investments.
With the exception of POCI financial assets (which are considered separately below), ECLs are measured through a loss
allowance at an amount equal to:
•
•
12-month ECL, i.e. lifetime ECL that result from those default events on the financial instrument that are
possible within 12 months after the reporting date, (referred to as Stage 1); or
Full lifetime ECL, i.e. lifetime ECL that result from all possible default events over the life of the financial
instrument, (referred to as Stage 2 and Stage 3).
A loss allowance for full lifetime ECL is required for a financial instrument if the credit risk on that financial instrument has
increased significantly since initial recognition. For all other financial instruments, ECLs are measured at an amount equal
to the 12-month ECL.
34
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
for year ended 31 December 2020
FINANCIAL INSTRUMENTS (continued)
Expected Credit Losses
ECLs are a probability-weighted estimate of the present value of credit losses. These are measured as the present value of
the difference between the cash flows due to the Bank under the contract and the cash flows that the Bank expects to receive
arising from the weighting of multiple future economic scenarios, discounted at the asset’s EIR.
For undrawn loan commitments, the ECL is the difference between the present value of the difference between the contractual
cash flows that are due to the Bank if the holder of the commitment draws down the loan and the cash flows that the Bank
expects to receive if the loan is drawn down; and
For financial guarantee contracts, the ECL is the difference between the expected payments to reimburse the holder of the
guaranteed debt instrument less any amounts that the Bank expects to receive from the holder, the debtor or any other party.
The Bank measures ECL on an individual basis, or on a collective basis for portfolios of loans that share similar economic
risk characteristics. The measurement of the loss allowance is based on the present value of the asset’s expected cash flows
using the asset’s original EIR, regardless of whether it is measured on an individual basis or a collective basis.
Credit-impaired financial assets
A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash
flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired include observable data about
the following events:
significant financial difficulty of the issuer or the borrower;
a).
b). a breach of contract, such as a default or past due event;
c).
the lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty,
having granted to the borrower a concession(s) that the lender(s) would not otherwise consider;
it becoming probable that the borrower will enter bankruptcy or other financial reorganisation;
the disappearance of an active market for that financial asset because of financial difficulties; or
the purchase or origination of a financial asset at a deep discount that reflects the incurred credit losses.
d).
e).
f).
It may not be possible to identify a single discrete event—instead, the combined effect of several events may have caused
financial assets to become credit-impaired.
Purchased or originated credit-impaired (POCI) financial assets
For POCI the Bank only recognises the cumulative changes in lifetime expected credit losses since initial recognition. At
each reporting date, the Bank recognises in profit or loss the amount of the change in lifetime expected credit losses as
an impairment gain or loss. The Bank recognises favourable changes in lifetime expected credit losses as an impairment
gain, even if the lifetime expected credit losses are less than the amount of expected credit losses that were included in the
estimated cash flows on initial recognition.
The Bank assesses on a forward-looking basis the expected credit losses (‘ECL’) associated with its debt instrument assets
carried at amortised cost and FVOCI and with the exposure arising from loan commitments and financial guarantee contracts.
The Bank recognises a loss allowance for such losses at each reporting date. The measurement of ECL reflects:
•
•
•
An unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes;
The time value of money; and
Reasonable and supportable information that is available without undue cost or effort at the reporting date about
past events, current conditions and forecasts of future economic conditions.
For loan commitments and financial guarantee contracts, the loss allowance is recognised in other liabilities. The Bank
keeps track of the changes in the loss allowance for financial assets separately from those for loan commitments and
financial guarantee contracts. However, if a financial instrument includes both a loan (i.e. financial asset) and an undrawn
commitment (i.e. loan commitment) component and the Bank does not separately identify the expected credit losses on
the loan commitment component from those on the financial asset component, the expected credit losses on the loan
commitment is recognised together with the loss allowance for the financial asset. To the extent that the combined expected
credit losses exceed the gross carrying amount of the financial asset, the expected credit losses is recognised in other
liabilities.
35
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
for year ended 31 December 2020
FINANCIAL INSTRUMENTS (continued)
Definition of default
Critical to the determination of ECL is the definition of default. The definition of default is used in measuring the amount of
ECL and in the determination of whether the loss allowance is based on 12-month or lifetime ECL, as default is a component
of the probability of default (PD) which affects both the measurement of ECLs and the identification of a significant increase
in credit risk.
The Bank considers the following as constituting an event of default:
•
•
The borrower is past due more than 90 days on any material credit obligation to the Bank or;
The borrower is unlikely to pay its credit obligations to the Bank in full.
The definition of default is appropriately tailored to reflect different characteristics of different types of assets. Overdrafts are
considered as being past due once the customer has breached an advised limit or has been advised of a limit smaller than
the current amount outstanding.
When assessing if the borrower is unlikely to pay its credit obligation, the Bank takes into account both qualitative and
quantitative indicators. The information assessed depends on the type of the asset, for example in corporate lending a
qualitative indicator used is the breach of covenants, which is not relevant for retail lending. Quantitative indicators, such as
overdue status and non-payment on another obligation of the same counterparty are key inputs in this analysis. The Bank
uses a variety of sources of information to assess default which are either developed internally or obtained from external
sources.
Significant increase in credit risk
The Bank monitors all financial assets, undrawn loan commitments and financial guarantee contracts that are subject to the
impairment requirements to assess whether there has been a significant increase in credit risk since initial recognition. If
there has been a significant increase in credit risk the Bank will measure the loss allowance based on lifetime rather than
12-month ECL. The Bank’s accounting policy is not to use the practical expedient that financial assets with ‘low’ credit risk at
the reporting date are deemed not to have had a significant increase in credit risk. As a result the Bank monitors all financial
assets, undrawn loan commitments and financial guarantee contracts that are subject to impairment for significant increase
in credit risk.
In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the Bank
compares the risk of a default occurring on the financial instrument at the reporting date based on the remaining maturity of
the instrument with the risk of a default occurring that was anticipated for the remaining maturity at the current reporting date
when the financial instrument was first recognised. In making this assessment, the Bank considers both quantitative and
qualitative information that is reasonable and supportable, including historical experience and forward-looking information
that is available without undue cost or effort, based on the Bank’s historical experience and expert credit assessment
including forward-looking information.
Multiple economic scenarios form the basis of determining the probability of default at initial recognition and at subsequent
reporting dates. Different economic scenarios will lead to a different probability of default. It is the weighting of these different
scenarios that forms the basis of a weighted average probability of default that is used to determine whether credit risk has
significantly increased.
For corporate lending, forward-looking information includes the future prospects of the industries in which the Bank’s lenders
operate, obtained from economic expert reports, financial analysts, governmental bodies and other similar organisations,
as well as consideration of various internal and external sources of actual and forecast economic information. For the
retail portfolio, forward looking information includes the same economic forecasts as the corporate portfolio with additional
forecasts of local economic indicators, particularly for regions with a concentration to certain industries, as well as internally
generated information of customer payment behaviour. The Bank allocates its counterparties to a relevant internal credit risk
grade depending on their credit quality. The quantitative information is a primary indicator of significant increase in credit risk
and is based on the change in lifetime PD by comparing:
•
•
the remaining lifetime PD at the reporting date; with
the remaining lifetime PD for this point in time that was estimated based on facts and circumstances at the time
of initial recognition of the exposure.
The PDs used are forward looking and the Bank uses the same methodologies and data used to measure the loss allowance
for ECL.
The qualitative factors that indicate significant increase in credit risk are reflected in PD models on a timely basis. However,
the Bank still considers separately additional qualitative factors to assess if credit risk has increased significantly. For
corporate lending there is particular focus on assets that are included on the Bank’s ‘watch list’ and for the retail portfolio the
Bank considers the expectation of forbearance and payment holidays, credit scores and any other changes in the borrower’s
circumstances which are likely to adversely affect one’s ability to meet contractual obligations.
36
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
for year ended 31 December 2020
FINANCIAL INSTRUMENTS (continued)
Significant increase in credit risk (continued)
Given that a significant increase in credit risk since initial recognition is a relative measure, a given change, in absolute
terms, in the PD will be more significant for a financial instrument with a lower initial PD than compared to a financial
instrument with a higher PD.
The Bank assumes that when an asset becomes 30 days past due, the Bank considers that a significant increase in
credit risk has occurred and the asset is in stage 2 of the impairment model, i.e. the loss allowance is measured as the
lifetime ECL.
(iii)
Modification of loans
The Bank sometimes renegotiates or otherwise modifies the contractual cash flows of loans to customers. When this
happens, the Bank assesses whether or not the new terms are substantially different to the original terms. The Bank does
this by considering, among others, the following factors:
•
If the borrower is in financial difficulty, whether the modification merely reduces the contractual cash flows
to amounts the borrower is expected to be able to pay.
• Whether any substantial new terms are introduced, such as a profit share/equity-based return that
•
•
•
substantially affects the risk profile of the loan.
Significant extension of the loan term when the borrower is not in financial difficulty. Significant change in
the interest rate.
Change in the currency the loan is denominated in.
Insertion of collateral, other security or credit enhancements that significantly affect the credit risk associated
with the loan.
If the terms are substantially different, the Bank derecognises the original financial asset and recognises a ‘new’ asset
at fair value and recalculates the new effective interest rate for the asset. The date of renegotiation is consequently
considered to be the date of initial recognition for impairment calculation purposes, including for the purpose of
determining whether a significant increase in credit risk has occurred. However, the Bank also assesses whether the new
financial asset recognised is deemed to be credit-impaired at initial recognition, especially in circumstances where the
renegotiation was driven by the debtor being unable to make the originally agreed payments. Differences in the carrying
amount are also recognised in profit or loss as a gain or loss on derecognition.
If the terms are not substantially different, the renegotiation or modification does not result in derecognition, and the
Bank recalculates the gross carrying amount based on the revised cash flows of the financial asset and recognises a
modification gain or loss in profit or loss. The new gross carrying amount is recalculated by discounting the modified cash
flows at the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-
impaired financial assets).
(iv)
Derecognition other than on a modification
Financial assets, or a portion thereof, are derecognised when the contractual rights to receive the cash flows from the
assets have expired, or when they have been transferred and either
•
•
the Bank transfers substantially all the risks and rewards of ownership, or
the Bank neither transfers nor retains substantially all the risks and rewards of ownership and the Bank has
not retained control.
The Bank enters into transactions where it retains the contractual rights to receive cash flows to other entities and
transfers substantially all of the risks and rewards. These transactions are accounted for as ‘pass through’ transfers that
result in derecognition if the Bank:
(i)
(ii)
(iii)
Has no obligation to make payments unless it collects equivalent amounts from the assets;
Is prohibited from selling or pledging the assets; and
Has an obligation to remit any cash it collects from the assets without material delay.
Collateral (shares and bonds) furnished by the Bank under standard repurchase agreements and securities lending and
borrowing transactions are not derecognised because the Bank retains substantially all the risks and rewards on the
basis of the predetermined repurchase price, and the criteria for derecognition are therefore not met. This also applies to
certain securitisation transactions in which the Bank retains a subordinated residual interest.
37
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
for year ended 31 December 2020
FINANCIAL INSTRUMENTS (continued)
Financial Liabilities
Classification and subsequent measurement
In both the current and prior period, financial liabilities are classified as subsequently measured at amortised cost, except for:
Financial liabilities at fair value through profit or loss: this classification is applied to financial liabilities held for trading (e.g.
short positions in the trading booking) and other financial liabilities designated as such at initial recognition. Gains or losses
on financial liabilities designated at fair value through profit or loss are presented partially in other comprehensive income
(the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability,
which is determined as the amount that is not attributable to changes in market conditions that give rise to market risk) and
partially profit or loss (the remaining amount of change in the fair value of the liability). This is unless such a presentation
would create, or enlarge, an accounting mismatch, in which case the gains and losses attributable to changes in the credit
risk of the liability are also presented in profit or loss;
Financial liabilities arising from the transfer of financial assets which did not qualify for derecognition, whereby a financial
liability is recognised for the consideration received for the transfer. In subsequent periods, the Bank recognises any expense
incurred on the financial liability.
Derecognition
Financial liabilities are derecognised when they are extinguished (i.e. when the obligation specified in the contract is
discharged, cancelled or expires).
The exchange between the Bank and its original lenders of debt instruments with substantially different terms, as well as
substantial modifications of the terms of existing financial liabilities, are accounted for as an extinguishment of the original
financial liability and the recognition of a new financial liability. The terms are substantially different if the discounted present
value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the
original effective interest rate, is at least 10% different from the discounted present value of the remaining cash flows of the
original financial liability. In addition, other qualitative factors, such as the currency that the instrument is denominated in,
changes in the type of interest rate, new conversion features attached to the instrument and change in covenants are also
taken into consideration. If an exchange of debt instruments or modification of terms is accounted for as an extinguishment,
any costs or fees incurred are recognised as part of the gain or loss on the extinguishment. If the exchange or modification
is not accounted for as an extinguishment, any costs or fees incurred adjust the carrying amount of the liability and are
amortised over the remaining term of the modified liability.
Financial guarantee contracts and loan commitments
Financial guarantee contracts are contracts that require the issuer to make specified payments to reimburse the holder
for a loss it incurs because a specified debtor fails to make payments when due, in accordance with the terms of a debt
instrument. Such financial guarantees are given to banks, financial institutions and others on behalf of customers to secure
loans, overdrafts and other banking facilities.
Financial guarantee contracts are initially measured at fair value and subsequently measured at the higher of:
•
•
The amount of the loss allowance; and
The premium received on initial recognition less income recognised in accordance with the principles of IFRS
15.
Loan commitments provided by the Bank are measured as the amount of the loss allowance. The Bank has not provided
any commitment to provide loans at below-market interest rate, or that can be settled net in cash or by delivering or issuing
another financial instrument.
For loan commitments and financial guarantee contracts, the loss allowance is recognised in other liabilities. However,
for contracts that include both a loan and an undrawn commitment and the Bank cannot separately identify the expected
credit losses on the undrawn commitment component from those on the loan component, the expected credit losses on the
undrawn commitment are recognised together with the loss allowance for the loan. To the extent that the combined expected
credit losses exceed the gross carrying amount of the loan, the expected credit losses are recognised in other liabilities.
Critical accounting estimates and judgements
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the
actual results. Management also needs to exercise judgement in applying the Bank’s accounting policies.
Note 2.4 (Use of estimates and judgements) provides an overview of the areas that involve a higher degree of judgement or
complexity, and major sources of estimation uncertainty that have a significant risk of resulting in a material adjustment within
the next financial year. Detailed information about each of these estimates and judgements is included in the related notes
together with information about the basis of calculation for each affected line item in the financial statements.
38
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
for year ended 31 December 2020
FINANCIAL INSTRUMENTS (continued)
Measurement of the expected credit loss allowance
The measurement of the expected credit loss allowance for financial assets measured at amortised cost and FVOCI is an
area that requires the use of complex models and significant assumptions about future economic conditions and credit
behaviour (e.g. the likelihood of customers defaulting and the resulting losses). A number of significant judgements are also
required in applying the accounting requirements for measuring ECL, such as:
•
•
•
•
Determining criteria for significant increase in credit risk;
Choosing appropriate models and assumptions for the measurement of ECL;
Establishing the number and relative weightings of forward-looking scenarios for each type of product/market
and the associated ECL; and
Establishing groups of similar financial assets for the purposes of measuring ECL.
The Bank evaluates ECLs for 7 portfolios of audited corporates with overdraft limits, audited corporates without overdraft
limits, unaudited corporates with overdraft limits, unaudited corporates without overdraft limits, SMEs with limits, SMEs
without limits and Retail loans.
The guiding principle of the Expected Credit Loss evaluation is to reflect the general pattern of deterioration or improvement
in the credit quality of financial instruments and allocate commensurate loss provisions. Under the general approach, there
are two measurement bases:
•
•
12-month ECLs (Stage 1 ECLs) that is evaluated for all financial instruments with no significant deterioration
in credit quality since initial recognition.
Lifetime ECLs (Stages 2 and 3 ECLs) that is evaluated for financial instruments for which significant increase
in credit risk or default has occurred on an individual or collective basis.
Probability of Default (PD)
The Bank defines Probability of Default as the likelihood that a borrower will fail to meet their contractual obligations in
the future. The Bank’s PD models have been built using historical credit default experience, present credit information as
well as forward looking factors which affect the capacity of borrowers to meet their contractual obligations. The Bank used
the logistic regression approach to construct PD models for Corporate, SME, Retail and Treasury Bills portfolios while the
Merton model was adopted for Interbank Placements. The PD models are used at entity level to evaluate 12 - month PDs
for Day 1 losses and for financial instruments with no significant deterioration in credit risk since initial recognition, whilst
lifetime PD is used for financial instruments for which significant increase in credit risk or default has occurred. 12 - month
PDs are derived using borrower present risk characteristics while lifetime PDs are derived using a combination of 12 - month
PDs, present borrower behaviour and forward looking macroeconomic factors.
Exposure at Default (EAD)
The Bank defines Exposure at Default as an estimation of the extent to which the Bank will be exposed to a counterparty in
the event of a default. The Bank’s EAD models have been built using historical experience of debt instruments that defaulted.
The Bank used the linear regression approach to construct EAD models for Corporate, SME and Retail portfolios. For TBs
and Interbank Placements, the Bank took a conservative approach of considering the full outstanding balance as the EAD
at any given point in the lifetime of an instrument. The Bank’s EAD models that use Credit Conversion Factors (CCFs)
are applied on fully drawn down instruments while models that use Loan Equivalents (LEQs) are applied on partly drawn
instruments. The EAD models are used at entity level to evaluate the proportion of the exposure that will be outstanding at
the point of default.
Loss Given Default (LGD)
The Bank defines Loss Given Default as an estimate of the ultimate credit loss in the event of a default. The Bank’s LGD
models were built using historical experience of defaulted debt instruments and observed recoveries. The Bank used
the linear regression approach to construct LGD models for Corporate, SME and Retail portfolios. For Treasury Bills and
Interbank Placements, the Bank took a conservative approach of taking a fixed 100% as the LGD at any given point in the
lifetime of an instrument. The LGD models are used at portfolio level to evaluate 12 - month LGDs for financial instruments
with no significant increase in credit risk since initial recognition and lifetime is applied LGDs for financial instruments for
which significant increase in credit risk has occurred. 12 - month LGDs were derived as historical loss rates while lifetime
LGDs were derived using a combination of 12 - month LGDs and forward looking macroeconomic factors such as GDP
and Inflation.
The Bank’s ECL model combines the output of the PD, EAD and LGD and computes an Expected Credit Loss that takes
into account the time value of money using the Effective Interest Rates (EIR) and time to maturity of the debt instruments.
39
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
for year ended 31 December 2020
FINANCIAL INSTRUMENTS (continued)
The final ECL is a probability-weighted amount that is determined by evaluating three (3) possible outcomes of Best Case
ECL, Baseline Case ECL and Worst Case ECL. The Bank has modelled these three cases in such a
way that the Best Case represents a scenario of lower than market average default rates, the Base Case represents scenarios
of comparable market average default rates and the Worst Case represents scenarios of higher than market average default
rates.
Forward looking information
In its ECL models, NMB Bank relies on a broad range of forward looking information as macroeconomic inputs, such as:
Inflation Rate
This is the inflation of the country of Zimbabwe. The Bank approximates the impact of inflation on the future quality of the
credit portfolio by measuring the variation between the inflation rate at reporting date and the highest forecasted inflation
rate for the period 2020-2023. Current inflation data is collected from the Reserve Bank of Zimbabwe (RBZ) and Zimbabwe
National Statistics Agency (ZIMSTAT) websites while inflation forecast data is collected from the World Bank websites.
Unemployment Rates
The Bank defines this as the unemployed proportion of the country’s population. The Bank approximates the impact of
unemployment on the future quality of the credit portfolio by assessing the direction of the rate. Increasing unemployment
rate tends to indicate economic downsizing in the future while an improving unemployment rate ordinarily indicates economic
growth.
Market Non-Performing Loans Rate
The Bank assesses the variance between its non-performing loans rate and the market average NPL rate as at reporting
date. The variance approximates the performance of the Bank against the market with respect to the ability of the Bank to
underwrite low credit loans.
Producer Price Index (PPI)
The Bank assesses this as the cost of production for companies. The Bank approximates the impact of PPI on the future
quality of the credit portfolio by assessing the direction of the index. Increasing PPI tend to indicate economic downsizing in
the future while decreasing PPI ordinarily promotes economic growth in the future. PPI data is collected from the RBZ and
ZIMSTAT websites.
Renegotiated loans and advances
Where possible, the Group seeks to restructure loans rather than to take possession of collateral. This may involve extending
the payment arrangements and the agreement of new loan conditions. Once the terms have been re-negotiated, any
impairment is measured using the original effective interest rate (EIR) as calculated before the modification of terms and the
loan is no longer considered past due. Management continuously renews re-negotiated loans to ensure that all criteria are
met and that future payments are likely to occur. The loans continue to be subject to an individual or collective impairment
assessment, calculated using the loans original EIR.
Collateral valuation
The Group seeks to use collateral, where possible, to mitigate its credit risk on financial assets. The collateral comes in
various forms such as cash, securities, letters of credit/guarantees, real estate, receivables, inventories, other non-financial
assets and credit enhancements such as netting agreements. The fair value of collateral is generally assessed, at a minimum,
at inception and based on the Group’s quarterly reporting schedule, however, some collateral, for example, cash or securities
relating to margining requirements, is valued daily. To the extent possible, the Group uses active market data for valuing
financial assets, held as collateral. Other financial assets
which do not have a readily determinable market value are valued using models. Non-financial collateral, such as real
estate, is valued based on data provided by third parties such as mortgage brokers, housing price indices, audited financial
statements, and other independent sources. (See note 39.1.4 for further analysis of collateral).
Collateral repossessed
The Group’s policy is to determine whether a repossessed asset is best used for its internal operations or should be sold.
Assets determined to be useful for the internal operations are transferred to their relevant asset category at the lower of
their repossessed value or the carrying value of the original secured asset. Assets that are determined better to be sold, are
immediately transferred to assets held for sale at their value at the repossession date in line with the Group’s policy.
40
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
for year ended 31 December 2020
FINANCIAL INSTRUMENTS (continued)
Offsetting financial instruments
Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position if, and
only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a
net basis, or to realise the asset and settle the liability simultaneously. This is not generally the case with master netting
agreements, therefore, the related assets and liabilities are presented gross in the statement of financial position.
Non-performing loans
Interest on loans and advances is accrued as income until such time as reasonable doubt exists about its recoverability,
thereafter and until all or part of the loan is written off, interest continues to accrue on customer’s accounts but is not included
in income. The suspended interest is recognised as a provision in the statement of financial position. Such suspended
interest is deducted from loans and advances in the statement of financial position. This policy meets the requirements of the
Banking Regulations, Statutory Instrument, 205 of 2000.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include notes and coins on hand, unrestricted balances held with central bank and highly liquid
financial assets with original maturities of three months or less from the acquisition date that are subject to an insignificant
risk of changes in their fair value, and are used by the Group in the management of its short term commitments.
Cash and cash equivalents are carried at amortised cost in the statement of financial position.
PROPERTY AND EQUIPMENT
Equipment is stated at cost less accumulated depreciation and accumulated impairment losses. Such cost includes the
cost of replacing part of the equipment when that cost is incurred, if the recognition criteria are met. Likewise, when a major
inspection is performed, its cost is recognised in the carrying amount of the equipment as a replacement if the recognition
criteria are satisfied. The previous remaining carrying amount is derecognized. All other repair and maintenance costs are
recognised in the profit or loss as incurred.
Land and buildings are measured at revalued amount less accumulated depreciation on buildings and impairment losses
recognised after the date of the revaluation. Revaluation of property is performed at the end of each reporting period, by a
registered professional valuer.
Any revaluation surplus is recognised in other comprehensive income and accumulated in the revaluation reserve included
in the equity section of the statement of financial position, except to the extent that it reverses a
revaluation decrease of the same asset previously recognised in profit or loss, in which case the increase is recognised in
profit or loss. A revaluation deficit is recognised in profit or loss, except to the extent that it offsets an existing surplus on the
same asset recognised in the asset revaluation reserve, the decrease in other comprehensive income reduces the amount
accumulated in equity as the asset revaluation reserve, the decrease in other comprehensive income reduces the amount
accumulated in equity as the asset revaluation reserve. Upon disposal, any revaluation reserve relating to the particular
asset being sold is transferred to retained earnings.
An annual transfer from the asset revaluation reserve to retained earnings is made for the difference between depreciation
based on the revalued carrying amount of the assets and depreciation based on the assets original cost. Additionally,
accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the
net amount is restated to the revalued amount of the asset. Upon disposal, any revaluation reserve relating to the particular
asset being sold is transferred to retained earnings.
An item of property and plant and equipment is derecognised upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is
derecognised.
Residual values and the useful life of assets are reviewed at least at each financial year end. Where the residual value of
an asset increases to an amount that is equal to or exceeds its carrying amount, then the depreciation of the asset ceases.
Depreciation will resume only when the residual value decreases to an amount below the asset’s carrying amount.
Owned assets
The cost of self-constructed assets includes the cost of materials, direct labour and an appropriate proportion of attributable
overheads which are directly attributable to the assets.
41
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
for year ended 31 December 2020
PROPERTY AND EQUIPMENT (Continued)
Depreciation
Depreciable amount is the cost of an asset or other amount substituted for cost less its residual value. Depreciation is
provided to write off the depreciable amount of property and equipment over their estimated useful lives to their estimated
residual values at the following rates per annum, on a straight-line basis.
20%
Computers
25%
Motor Vehicles
20%
Furniture and Equipment
Buildings
2%
Land and capital work-in-progress are not depreciated.
INTANGIBLE ASSETS
Intangible assets are initially recognised at cost. Subsequently the assets are measured at cost less accumulated amortisation
and any impairment loss.
Amortisation of intangible assets
The depreciable amount of an intangible asset with a finite useful life is allocated on a straight line basis over its useful life.
The amortisation rate is as follows:
Computer software
20%
LEASES
The determination of whether an arrangement is a lease, or it contains a lease is based on the substance of the arrangement
and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or
assets and the arrangement conveys a right to use the asset.
As lessor
Leases where the Group does not transfer substantially all the risks and rewards of ownership of the assets are classified as
operating leases. Initial direct costs incurred in negotiating operating leases are added to the carrying amount of the leased
asset and recognised over the lease term on the same basis as rental income.
As lessee
In terms of IFRS 16, the Group recognises lease liabilities in relation to leases which had previously been classified as
‘operating leases’ under the principles of IAS 17, Leases. These liabilities are measured at the present value of the remaining
lease payments, discounted using the Group’s incremental borrowing rate.
The Group has neither enjoyed nor extended any lease payment holidays in its capacity as either lessee or lessor respectively
due to COVID-19. As such, there are no COVID-19 induced lease modifications applicable during the period under review.
Measurement of right-of-use assets
The associated right-of-use assets for property leases are measured on a prospective basis. The right-of-use assets are
measured at the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments
relating to that lease recognised in the consolidated statement of financial position.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the
lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-
line basis. In circumstances where the Group is reasonably certain to exercise a purchase option, the right-of-use asset
is depreciated over the underlying asset’s useful life. The Group revalues its land and buildings that are presented within
property and equipment and it has elected not to do so for the right-of-use buildings held by the Group.
IMPAIRMENT OF NON FINANCIAL ASSETS
The carrying amounts of the Group’s non-financial assets other than consumables are reviewed at each reporting date to
determine whether there is any indication of impairment. If any such indication exists, the assets’ recoverable amounts are
estimated.
42
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
for year ended 31 December 2020
IMPAIRMENT OF NON FINANCIAL ASSETS (continued)
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable
amount. The recoverable amount of assets is the greater of their fair value less cost to sell and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset. In determining fair value less
costs to sell, an appropriate valuation model is used. Impairment losses of continuing operations are recognised in profit or
loss in those expense categories consistent with the functions of the impaired asset, except for property previously revalued
where the revaluation was taken to other comprehensive income. In this case, the impairment is also recognised in other
comprehensive income up to the amount of any previous revaluation. For assets excluding goodwill, an assessment is made
at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist,
or may have decreased. If such an indication exists the bank estimates the assets or CGU’s recoverable amount.
A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine
the assets recoverable amount since the last impairment loss was recognised.
The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceeds the
carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the
asset in prior years. Such reversal is recognised in profit or loss.
INVESTMENT PROPERTIES
Investment properties are measured initially at cost, including transaction costs. The carrying amount includes the cost
of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met, and
excludes the costs of day to day servicing of an investment property. Subsequent to initial recognition, investment properties
are stated at fair value, which reflects market conditions at the reporting date. Rental income from investment properties is
recognised as revenue on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an
integral part of the total rental income, over the term of the lease. Gains or losses arising from changes in the fair values of
investment properties are included in profit or loss in the year in which they arise. Revaluation is done at the end of each year
by a registered independent professional valuer.
Investment properties are derecognised when either they have been disposed of or when the investment property is
permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the
retirement or disposal of an investment property are recognised in profit or loss in the year of retirement or disposal.
Transfers are made to or from investment property only when there is a change in use. For a transfer from investment
property to owner occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in
use. If owner occupied property becomes an investment property, the Group accounts for such property in accordance with
the policy stated under property and equipment up to the date of change in use.
FINANCIAL GUARANTEES
In the ordinary course of business, the banking subsidiary give financial guarantees, consisting of letters of credit, guarantees
and acceptances. Financial guarantees are initially recognised in the financial statements at fair value, being the premium
received. Subsequent to initial recognition, the Group’s liability under each guarantee is measured at the higher of the amount
initially recognised less, where appropriate, cumulative amortisation recognised in profit or loss, and the best estimate of
expenditure required to settle any financial obligation arising as a result of the guarantee.
Any increase in the liability relating to financial guarantees is recognised in the profit or loss. The premium received is
recognised in profit or loss on a straight line basis over the life of the guarantee, or in full, depending on the conditions
attached to the guarantee.
WRITE-OFFS
Financial assets are written off where the recovery efforts have been pursued actively over one year without success or
when it is uneconomical and inefficient to keep carrying the debt in the books as the chances of recovery become slim. Such
accounts become subjects of write-backs in the event of recovery.
Partial write-offs may be possible in cases where collateral security held is inadequate to expunge the debt in full.
FEES AND COMMISSION INCOME
Fees and commission income and expense that are integral to the effective interest rate on a financial asset or financial
liability are included in the measurement of the EIR.
Other fees and commission – including retail banking customer fees, corporate banking and credit related fees, fees from
financial guarantee contracts, commission from international banking activities and fees from corporate finance – are
recognised as the related services are performed. If a loan commitment is not expected to be drawn down of a loan, then the
related commitment fees are recognised on a straight line basis over the commitment period.
Other fees and commitment expense relate mainly transaction and service fees, which are expensed as the services are
received.
43
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
for year ended 31 December 2020
INTEREST INCOME
For all financial instruments measured at amortised cost and financial instruments designated at fair value through profit or
loss, interest income or expense is recorded using the effective interest rate (EIR), which is the rate that exactly discounts the
estimated future cash payments or receipts through the expected life of the financial instrument or a shorter period, where
appropriate, to the net carrying amount of the financial asset or liability.
Interest income includes income arising out of the banking activities of lending and investing.
INTEREST EXPENSE
Interest expense arises from deposit taking and borrowings. The expense is recognised in profit or loss as it accrues, taking
into account the effective interest cost of the liability.
EMPLOYEE BENEFITS
Retirement benefits are provided for the Group’s employees through a defined contribution plan and the National Social
Security Authority Scheme.
Defined Contribution Plan
Obligations for contribution to the defined contribution pension plan are recognised as an expense in profit or loss as they
are incurred.
National Social Security Authority Scheme
The cost of retirement benefits applicable to the National Social Security Authority, which commenced operations on 1
October 1994 is determined by the systematic recognition of legislated contributions.
Short term employee benefits/and share based payments
Short term employee benefits are expensed as the related service is provided. A liability is recognised for the amount
expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service
provided by the employee and the obligation can be estimated reliably.
Share based payments
The Group issues share options to certain employees in terms of the Employee Share Option Scheme which is an equity
settled share-based payment scheme. Share options are measured at fair value of the equity instruments at the grant date.
The fair value determined at the grant date of the options is expensed over the vesting period, based on the Group’s estimate
of shares that will eventually vest. Fair value is measured using the Black-Scholes option pricing model. The expected
life used in the model is adjusted, based on management’s best estimate, for the effects of non-transferability, exercise
restrictions and other behavioural considerations.
PROVISIONS
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, and it
is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. The expense relating to any provision is presented in profit or loss
net of any reimbursements.
SHAREHOLDERS’ FUNDS AND SHAREHOLDERS’ LIABILITIES
Shareholders’ funds and shareholders’ liabilities refers to the total investment made by the shareholders in the Group and it
consists of share capital, share premium, share options reserve, functional currency translation reserve, retained earnings,
redeemable ordinary shares and subordinated loans. Incremental costs directly attributable to the issue of ordinary shares
are recognised as a deduction from equity. Income tax relating to transaction costs of an equity transaction is accounted for
in accordance with IAS 12.
44
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
for year ended 31 December 2020
1.
REPORTING ENTITY
The Holding Company is incorporated and domiciled in Zimbabwe and is an investment holding company. Its registered
office address is 64 Kwame Nkrumah Avenue, Harare. Its principal operating subsidiary is engaged in commercial and
retail banking. NMB Bank Limited is a registered commercial bank and was incorporated in Zimbabwe on 16 October 1992
and commenced trading on 1 June 1993. The Bank operated as an Accepting House until 6 December 1999 when the
licence was converted to that of a Commercial Bank. The Bank is exposed to the following risks in its operations: liquidity
risk, credit risk, market risk, operational risk, foreign currency exchange rate risk and interest rate risk.
2.
ACCOUNTING CONVENTION
2.1
Basis of preparation
The condensed consolidated financial statements including comparatives, have been prepared under the inflation adjusted
accounting basis to account for changes in the general purchasing power of the ZWL. The restatement is based on the
Consumer Price Index at the statement of financial position date. The indices are derived from the monthly inflation rates
which are issued by the Zimbabwe National Statistics Agency (ZIMSTAT). The indices used are shown below. These
condensed consolidated financial statements are reported in Zimbabwean dollars and rounded to the nearest dollar.
Dates
31 December 2018
31 December 2019
31 December 2020
Indices
88.81
551.63
2474.52
Conversion factor
27.8639
4.4859
1.000
The indices have been applied to the historical costs of transactions and balances as follows:
•
•
•
•
•
•
All comparative figures as of and for the periods ended 31 December 2018, 31 December 2019 and 31
December 2020 have been restated by applying the change in the index to 31 December 2020;
Income statement transactions have been restated by applying the change in the index from the approximate
date of the transactions to 31 December 2020;
Gains and losses arising from the monetary assets or liability positions have been included in the income
statement;
Non-monetary assets and liabilities have been restated by applying the change in the index from the date of
the transaction to 31 December 2020;
Property and equipment and accumulated depreciation have been restated by applying the change in the
index from the date of their purchase or re-assessment to 31 December 2020;
Equity has been restated by applying the change in index from the date of issue to 31 December 2020;
The net impact of applying the procedures above is shown in the statement of comprehensive income as the gain or loss
on net monetary position.
IAS 29 discourages the publication of historical results as a supplement to the inflation adjusted results. However, historical
results have been published as additional information for the users of the Group’s financial statements. The Auditors have
not expressed an opinion on the historical results.
2.2
Functional and presentation currency
For the purposes of the consolidated financial statements, the results and financial position of the Group are expressed in
Zimbabwe dollars which is the functional currency of the Group, and the presentation currency for the consolidated financial
statements.
2.3
Comparative financial information
The Group financial statements comprise the consolidated and separate statements of financial position, comprehensive
income, changes in equity and cash flows. The comparative information covers a period of twelve months.
2.4
Use of estimates, judgements and assumptions
In preparation of the consolidated and separate financial statements, Directors have made judgments, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised
prospectively.
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment
in the year ending 31 December 2021 is included in the following notes.
45
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
2.
ACCOUNTING CONVENTION (cont’d)
2.4.1
Deferred tax
Deferred taxation is recognised in respect of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes. Temporary differences arising out of the initial
recognition of assets or liabilities and temporary differences on initial recognition of business combinations that affect neither
accounting nor taxable profit are not recognised. The amount of deferred tax provided is based on the expected manner
of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted
at the reporting date. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply
in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
2.4.2
Land and buildings
The properties were valued by an independent professional valuer. The determined fair value of land and buildings is most
sensitive to significant unobservable inputs. The property market is currently not stable due to liquidity constraints.
2.4.3
Investment properties
Investment properties were valued by an independent professional valuer. The properties market is currently not stable due
to liquidity constraints.
2.4.4
Impairment losses on loans and advances
The Group reviews its individually significant loans and advances at each reporting date to assess whether an impairment
loss should be recorded in profit or loss. In particular, judgement by management is required in the estimation of the amount
and timing of future cash flows when determining the impairment loss. In estimating these cash flows, the Group makes
judgements about the borrower’s financial situation and the net realisable value of collateral. These estimates are based on
assumptions about a number of factors and actual results may differ, resulting in future changes to the allowance. Loans
and advances that have been assessed individually and found not to be impaired and all individually insignificant loans and
advances are then assessed collectively, in groups of assets with similar risk characteristics, to determine whether provision
should be made due to incurred loss events for which there is objective evidence but whose effects are not yet evident.
2.4.5
COVID-19
The Directors fully acknowledge the unprecedented challenges and uncertainties posed by the COVID-19 pandemic. In that
regard, significant judgments have generally been applied in light of the likely impacts of COVID-19 on the Group’s activities.
The Directors fully acknowledge the challenges and uncertainties posed by the COVID-19 pandemic. As such, significant
judgements have generally been applied in light of the potential impacts of COVID-19 on the Group’s activities.
2.4.6
Going concern
The Directors have assessed the ability of the Group and Company to continue operating as a going concern and believe that
the preparation of these financial statements on a going concern basis is still appropriate.
2.4.7
Determination of the functional currency
The Government of Zimbabwe adopted a multi-currency regime in 2009. The British Pound, Euro, United States Dollar
(USD), South African Rand (ZAR) and Botswana Pula were adopted as the multi-currency basket in February 2009. In
January 2014, the Reserve Bank of Zimbabwe (RBZ) issued a Monetary Policy Statement which added the Chinese Yuan,
Australian Dollar, Indian Rupee, Japanese Yen into the basket of multi-currencies. At the onset, the USD and the ZAR were
the commonly used currencies, with the USD eventually gaining prominence resulting in it being designated as the functional
and presentation currency by the transacting public and the Monetary Authorities, including the Group.
Between 2014 and 2016, the Zimbabwean economy experienced a massive liquidity crisis which eventually prompted the
Monetary Authorities to introduce the bond notes in November 2016 whilst encouraging the public to continue using the other
currencies in the multi-currency basket. The bond notes were introduced at an official fixed exchange rate of 1:1 with the
USD and the Monetary Authorities specifically directed financial institutions not to open separate vault and cash accounts
for the USD and the bond notes. The introduction of the bond notes gave rise to a three (3) tier pricing system wherein
sellers and service providers would quote three (3) separate prices (USD, bond notes and RTGS/electronic transfers) for
their merchandise and services respectively. Significant discounts were being offered for USD payments whilst a premium
would be added for prices quoted in bond notes or electronic settlement via the Real Time Gross Settlement System (RTGS).
These developments triggered a debate around the functional currency of Zimbabwe. It should be noted that the Group never
participated in the three tier pricing and none of its products had multiple prices during the same period.
46
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
2.
ACCOUNTING CONVENTION (cont’d)
2.4
Use of estimates, judgements and assumptions (cont’d)
2.4.7
Determination of the functional currency (cont’d)
In October 2018, the Monetary Authorities instructed financial institutions to separate bond notes and USD accounts and
indicated that corporates and individuals could proceed to open Nostro Foreign Currency Accounts (FCA), for foreign currency
holdings, which were now being exclusively distinguished from the existing RTGS based accounts. However, it should be
noted that at the time of this policy pronouncement, the Monetary Authorities did not state that they had introduced a new
currency for Zimbabwe, which actually meant that the USD remained as the currency of reference. By 31 December 2018,
there had been no pronouncement by the Monetary Authorities to the effect that there had been a new currency introduced,
which could be considered as the country’s functional currency.
On 22 February 2019, the Reserve Bank of Zimbabwe (RBZ) issued an Exchange Control Directive, RU 28 of 2019 which
established an interbank foreign exchange market to formalise the buying and selling of foreign currency through the Banks
and Bureaux de change. In order to establish an exchange rate between the current monetary balances and foreign
currency, the Monetary Authorities denominated the existing RTGS balances in circulation as RTGS Dollars. Initial trades
on 22 February 2019 were at USD1: RTGS$2.5. On the same date, Statutory Instrument 33 of 2019 was also issued and it
specified that for accounting and other purposes, all assets and liabilities that were in USD immediately before the 22nd of
February 2019 were deemed to have been valued in RTGS Dollars at a rate of 1:1 with the USD.
On 24 June 2019, the Monetary Authorities announced that the multi-currency regime, which the country was operating in
since February 2009 had been discontinued and the country had adopted a mono-currency regime meaning that the sole
legal tender would be the Zimbabwe Dollar (ZWL).
On 26 March 2020, the Reserve Bank of Zimbabwe in a press statement announced various interventions in response to the
financial vulnerabilities caused by the COVID-19 pandemic. One of the measures announced therein was the authorization
of the use of free-funds in paying for goods and services, in terms of Statutory Instrument (SI) 85 of 2020. On 24 July 2020,
the Government of Zimbabwe issued Statutory Instrument (SI) 185 of 2020, which granted permission to display, quote or
offer prices for all goods and services in both Zimbabwe dollars and foreign currency at the interbank exchange rate.
On 23 June 2020, the Reserve Bank of Zimbabwe introduced the Foreign Exchange Auction System, effectively abandoning
the fixed foreign currency exchange rate regime which had been prevailing for the greater part of 2020. Significant trades
have been recorded on the platform and significant movements in the exchange rate have been resultantly recorded.
In light of the developments summarised above, the Directors concluded that the Group’s functional currency remains the
Zimbabwe dollar (ZWL) following its change from US$ with effect from 22 February 2019.
2.4.8
Lease arrangements
The Directors have exercised significant judgement on determining whether the various contractual relationships which the
Group is party to, contain lease arrangements which fall into the scope of IFRS 16. Significant judgement was also exercised
in determining whether the Group is reasonably certain that it will exercise extension options present in lease contracts as
well.
2.5
Standards issued and effective
2.5.1
Amendments to references to the Conceptual Framework in IFRS standards
These changes were applicable to annual periods beginning on or after 1 January 2020. In October 2018, the IASB issued
amendments to IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates
and Errors to align the definition of ‘material’ across the standards and to clarify certain aspects of the definition. The new
definition states that, ‘information is material if omitting, misstating or obscuring it could reasonably be expected to influence
decisions that the primary users of general purpose financial statements make on the basis of those financial statements,
which provide financial information about a specific reporting entity.’ The amendments did not have a significant impact on
the Group’s financial statements.
47
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
2.
ACCOUNTING CONVENTION (cont’d)
2.5.1
Amendments to references to the Conceptual Framework in IFRS standards (cont’d)
The amendments must be applied to transactions that are either business combinations or asset acquisitions for which
the acquisition date was on or after the beginning of the first annual reporting period beginning on or after 1 January 2020.
Consequently, entities do not have to revisit such transactions that occurred in prior periods. Earlier application is permitted
and must be disclosed.
The IASB issued amendments to the definition of a business in IFRS 3 Business Combinations to help entities determine
whether an acquired set of activities and assets is a business or not. They clarify the minimum requirements for a business,
removed the assessment of whether market participants are capable of replacing any missing elements, add guidance to
help entities assess whether an acquired process is substantive, narrow the definitions of a business and of outputs and
introduce an optional fair value
concentration test. The Group concluded that the changes did not have a material impact on its financial statements.
2.6
Standards issued and not yet adopted
2.6.1
Amendments to IAS 37 Onerous Contract – Costs of Fulfilling a Contract
The changes are effective 1 January 2022. The amendments apply a ‘directly related cost approach’. The costs relate
directly to a contract to provide goods or services include both incremental costs (e.g. the costs of direct labour and materials)
and an allocation of costs directly related to contract activities. The Group does not expect this to have a material impact on
its operations.
The changes are effective 1 January 2022. The amendment prohibits entities from deducting from the cost of an item of
property, plant and equipment, any proceeds of the sale of items produced while bringing that asset to the location and
condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognises
the proceeds from selling such items and the costs of producing those items, in profit or loss. This is not expected to have
a material impact on the Group.
3.
SEGMENT INFORMATION
For management purposes, the Group is organised into four operating segments based on products and services as follows:
Retail banking
Corporate banking
Treasury
International banking
Digital Banking
-
-
-
-
-
Individual customers deposits and consumer loans, overdrafts, credit card facilities
and funds transfer facilities.
Loans and other credit facilities and deposit and current accounts for corporate
and institutional customers.
Money market investment, securities trading, accepting and discounting of
instruments and foreign currency trading.
Handles the Group’s foreign currency denominated banking business and
manages relationships with correspondent banks.
Handles the Bank’s Digital Banking products including Card and POS services.
Management monitors the operating results of its business units separately for the purpose of making decisions about
resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss
which in certain respects is measured differently from operating profit or loss in the consolidated financial statements. Income
taxes are managed on a Group basis and are not allocated to operating segments.
Interest income is reported net as management primarily relies on net interest revenue as a performance measure, not the
gross income and expense.
Transfer prices between operating segments are on arm’s length basis in a manner similar to transactions with third parties.
No revenue from transactions with a single external customer or counterparty amounted to 10% or more of the Group’s total
revenue in 2020 or 2019.
48
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
3.
SEGMENT INFORMATION
The following table presents income and profit and certain asset and liability information regarding the Group’s operating
segments and service units:
Inflation Adjusted
Retail
Banking
ZWL
For the year ended 31 December 2020
Income
Third party income
Interest and similar
expense
279 996 668
(10 181 079)
----------------
269 815 589
----------------
(51 030 789)
(15 053 208)
-
35 931 847
-
Net operating income
Other material non-cash items
Impairment losses on financial
assets measured at
amortised cost
Depreciation of property
and equipment
Depreciation of right of
use assets
Amortisation of intangible
assets
Segment profit/(loss)
Income tax charge
Revaluation of land
and buildings, net of tax
-
----------------
Profit/(loss) for the year 35 931 847
=========
Corporate
Banking
ZWL
Treasury
Banking
ZWL
International
Banking
ZWL
Digital
Banking
ZWL
Other
ZWL
Total
ZWL
354 598 051
40 121 452
13 499 451
406 363 423 1 184 316 829 2 278 895 874
(54 034 392)
-----------------
300 563 659
-----------------
(78 777 285)
-----------------
(38 655 833)
----------------
-
------------------
13 499 451
----------------
-
-
----------------
------------------
406 363 423 1 184 316 829
------------------
-----------------
(142 992 756)
------------------
2 135 903 118
------------------
(71 726 425)
(5 217 526)
-
-
-
(127 974 740)
(223 637)
(190 094)
(25 073)
(6 879 288)
(46 790 543)
(69 161 843)
-
-
-
-
-
(11 116 446)
(11 116 446)
-
49 539 559
-
-
89 459 383
-
-
(5 505 199)
-
-
59 325 022
-
(24 416 805)
476 663 670
143 848 660
(24 416 805)
705 414 282
143 848 660
-
-----------------
49 539 559
-
-----------------
89 459 383
========== ==========
-
-----------------
(5 505 199)
==========
-
----------------
59 325 022
=========
181 026 875
181 026 875
-----------------
-------------------
801 539 205 1 030 289 817
========== ===========
As at 31 December 2020
Assets and liabilities
Capital expenditure (property
and equipment and
intangible assets)
Total assets
Total liabilities
7 375 151
1 745 604 620
2 787 323 898
-
139 120
2 757 964 372 1 585 971 421
1 972 993 786 1 266 708 566
22 242
537 393 534
186 581 982
1 191 180
263 283 231
254 555 538
58 344 865 4 271 882 798 10 957 161 610
548 580 362 6 762 188 594
-
49
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
3.
SEGMENT INFORMATION
The following table presents income and profit and certain asset and liability information regarding the Group’s operating
segments and service units:
Corporate
Banking
ZWL
Restated
Inflation Adjusted
International
Banking
ZWL
Restated
Treasury
Banking
ZWL
Restated
Digital
Banking
ZWL
Restated
Other
ZWL
Restated
Total
ZWL
Restated
398 189 898
158 636 488
35 817 248
378 406 384 1 945 123 199 3 278 415 691
(88 964 312)
-----------------
309 225 586
-----------------
(124 358 752)
-----------------
34 277 736
-----------------
-
------------------
35 817 248
----------------
-
----------------
378 406 384 1 945 123 199
-------------------
-----------------
(231 899 654)
------------------- --------------------
3 046 516 037
-------------------
-
36 467 556
1 854 188
-
-
-
49 562 276
1 506 221
463 517
258 662
30 470 889
3 162 023
69 204 252
-
-
-
-
-
13 854 548
13 854 548
-
368 734 573
-
-
225 132 646
-
-
247 979 418
-
-
(9 113 644)
-
-
335 647 679
-
28 513 216
(477 062 869)
(314 097 585)
28 513 216
691 317 803
(314 097 585)
-
-
-
-
-
487 104 622
487 104 622
Retail
Banking
ZWL
Restated
For the year ended 31 December 2019
Income
Third party income
Interest and similar
expense
362 242 474
(18 576 590)
-----------------
343 665 884
-----------------
11 240 532
33 342 940
Net operating income
Other material non-cash items
Impairment losses on financial
assets measured at
amortised cost
Depreciation of property
and equipment
Depreciation of right of
use assets
Amortisation of
intangible assets
Segment profit/(loss)
Income tax charge
Revaluation of land and buildings,
net of tax
Translation gain on change in
functional currency
-
----------------
-
-----------------
-
-----------------
-
-----------------
-
----------------
287 529 426
-----------------
287 529 426
-------------------
Total comprehensive
income for the year
368 734 573
=========
225 132 646
247 979 418
========== ==========
(9 113 644)
==========
335 647 679
==========
(16 526 406) 1 151 854 266
========== ===========
As at 31 December 2019
Assets and liabilities
Capital expenditure (property and
equipment and intangible
assets)
Total assets
Total liabilities
29 571 958
1 616 070 988
2 580 488 865
4.
INTEREST INCOME
-
557 825
2 553 307 980 1 468 283 466
1 826 586 605 1 172 711 701
89 183
497 515 926
172 736 554
4 776 243
161 315 024
126 319 815
54 015 350 3 183 155 245 9 372 348 955
599 437 599 6 351 961 324
-
Loans and advances to banks
Loans and advances to customers
Investment securities
Loans and advances to banks
Loans and advances to customers
Investment securities
50
Inflation adjusted
GROUP
COMPANY
2020
ZWL
16 542 933
708 206 922
36 152 014
2019
ZWL
Restated
19 190 164
643 787 970
145 428 872
2020
ZWL
-
-
-
2019
ZWL
Restated
-
-
-
------------------
760 901 869
===========
------------------
808 407 006
===========
------------------
-
===========
------------------
-
===========
Historical
GROUP
COMPANY
2020
ZWL
2019
ZWL
2020
ZWL
2019
ZWL
10 198 110
466 881 802
24 136 359
------------------
501 216 271
===========
2 368 733
58 942 089
9 246 368
------------------
70 557 190
===========
-
-
-
------------------
-
===========
-
-
-
------------------
-
===========
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
5.
INTEREST EXPENSE
Due to banks
Due to customers
Other borrowed funds
Due to banks
Due to customers
Other borrowed funds
Inflation adjusted
GROUP
COMPANY
2020
ZWL
79 510 659
54 877 880
8 604 217
------------------
142 992 756
===========
2019
ZWL
Restated
105 729 146
109 016 084
17 154 424
------------------
231 899 654
===========
2020
ZWL
-
-
-
------------------
-
===========
2019
ZWL
Restated
-
-
-
------------------
-
===========
GROUP
COMPANY
Historical
2020
ZWL
56 744 354
32 844 245
1 049 680
2019
ZWL
6 159 767
8 923 660
1 810 661
2020
ZWL
-
-
-
2019
ZWL
-
-
-
------------------
90 638 279
===========
------------------
16 894 088
===========
------------------
-
===========
------------------
-
===========
6.
6.1
NON INTEREST INCOME AND OTHER COMPREHENSIVE INCOME
Fee and commission income
Retail banking customer fees
Corporate banking credit relate fees
Financial guarantee fees
International banking commissions
Digital banking fees
Retail banking customer fees
Corporate banking credit relate fees
Financial guarantee fees
International banking commissions
Digital banking fees
Inflation adjusted
GROUP
COMPANY
2020
ZWL
312 978 016
99 687 124
7 268 349
24 363 557
687 255 527
2019
ZWL
Restated
254 814 639
70 979 783
2 236 976
29 356 098
464 437 575
2020
ZWL
-
-
-
-
-
2019
ZWL
Restated
-
-
-
-
-
------------------
1 131 552 573
===========
------------------
821 825 071
===========
------------------
-
===========
------------------
-
===========
GROUP
COMPANY
Historical
2020
ZWL
2019
ZWL
2020
ZWL
2019
ZWL
220 625 391
64 826 957
3 858 135
17 771 535
508 459 339
------------------
815 541 357
===========
24 101 648
10 259 457
212 188
3 070 999
49 598 011
------------------
87 242 303
===========
-
-
-
-
-
------------------
-
===========
-
-
-
-
-
------------------
-
===========
51
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
6.
6.2
NON INTEREST INCOME AND OTHER COMPREHENSIVE INCOME
Other income
Trade and other investments fair value gains
Profit on disposal of property and equipment
Fair value gains on investment properties
(Loss)/profit on disposal of investment properties
Rental income
Recoveries
Other operating income
Inflation adjusted
GROUP
COMPANY
2020
ZWL
3 645 884
7 881 999
228 646 579
(2 198 385)
7 610 897
5 879 717
6 138 736
------------------
257 605 427
===========
2019
ZWL
Restated
4 097 075
-
419 983 776
2 620 407
5 745 809
66 140 660
6 548 534
------------------
505 136 261
===========
2020
ZWL
-
-
-
-
-
-
-
------------------
-
===========
2019
ZWL
Restated
-
-
-
-
-
-
89 430 085
------------------
89 430 085
===========
Trade investments fair value gains
Profit on disposal of property and equipment
Fair value gains on investment properties
Profit on disposal of investment properties
Rental income
Recoveries
Other operating income
Historical
GROUP
COMPANY
2020
ZWL
2019
ZWL
2020
ZWL
2019
ZWL
9 265 541
7 091 399
1 182 737 157
10 867 431
5 641 865
3 406 069
7 837 534
-------------------
1 226 846 996
===========
1 499 630
-
194 387 322
584 149
391 885
9 519 359
240 294
------------------
206 622 639
===========
-
-
-
-
-
-
-
------------------
-
===========
-
-
-
-
-
-
3 772 370
------------------
3 772 370
===========
52
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
6.
6.3
NON INTEREST INCOME AND OTHER COMPREHENSIVE INCOME(Continued)
Other Comprehensive income
GROUP
COMPANY
Inflation adjusted
Revaluations of land and buildings
Tax effect (note 8)
Translation gain on change in functional currency
Tax effect
2020
ZWL
240 471 407
(59 444 532)
------------------
181 026 875
===========
-
-
------------------
-
------------------
181 026 875
===========
2019
ZWL
Restated
656 029 331
(168 924 709)
------------------
487 104 622
===========
387 248 848
(99 719 422)
------------------
287 529 426
------------------
774 634 048
===========
2020
ZWL
-
-
-----------------
==========
-
-
-----------------
-
-----------------
2019
ZWL
Restated
-
-
------------------
==========
-
-
-----------------
-
-----------------
==========
==========
6.3
Other Comprehensive income
GROUP
COMPANY
Historical
Revaluations of land and buildings
Tax effect (note 8)
Translation gain on change in functional currency
Tax effect (note 8)
2020
ZWL
2019
ZWL
2020
ZWL
2019
ZWL
1 183 829 028
(292 642 536)
------------------
891 186 492
-
-
------------------
------------------
891 186 492
===========
236 950 551
(61 007 342)
------------------
175 943 209
15 649 358
(4 029 710)
------------------
11 619 648
------------------
187 562 857
===========
-
-
------------------
-
-
------------------
-
-
------------------
-
-
-----------------
------------------
-----------------
===========
===========
53
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
7.
OPERATING EXPENDITURE
GROUP
COMPANY
Inflation adjusted
2020
ZWL
2019
ZWL
Restated
2020
ZWL
2019
ZWL
Restated
618 699 280
The net operating income is after charging the following:
Administration costs**
Audit fees:
- Current year
- Prior year
Amortisation of intangible assets
Depreciation (excluding right
of use assets)
Depreciation – right of use assets
Directors’ remuneration
- Fees for services as directors
- Services rendered
- Expenses
Staff costs – salaries, allowances and
related costs
13 977 416
2 814 505
24 416 805
69 161 843
11 116 446
34 698 537
13 309 810
21 151 722
237 005
499 362 793
------------------
1 274 247 625
===========
521 028 863
(2 672 327)
294 545
7 088 694
1 427 391
28 513 216
69 204 252
13 854 548
27 608 198
7 110 228
19 927 596
570 374
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
410 301 780
------------------
1 079 026 942
===========
-
------------------
(2 672 327)
===========
-
-----------------
294 545
===========
**Included in administration costs are lease finance costs amounting to ZWL16 443 895 (2019 – ZWL11 561 568) in respect of
property leases which the Group uses for the purpose of carrying on its trade.
7.
OPERATING EXPENDITURE
GROUP
COMPANY
Historical
2020
ZWL
2019
ZWL
2020
ZWL
2019
ZWL
395 919 343
The net operating income is after charging the following:
Administration costs
Audit fees:
8 388 890
- Current year
1 553 413
- Prior year
-
Impairment reversal on land and buildings*
915 580
Amortisation of intangible assets
22 310 284
Depreciation (excluding right of use assets)
8 579 715
Depreciation – right of use assets
13 902 765
Directors’ remuneration
3 520 400
- Fees for services as directors
10 344 405
- Services rendered
- Expenses
37 960
Staff costs – salaries, allowances and related costs 362 620 010
------------------
814 190 000
===========
55 318 360
(62 563)
12 425
993 686
200 090
(40 600)
733 909
2 307 360
1 310 867
2 531 536
644 487
1 806 282
80 767
42 582 294
------------------
105 937 502
===========
-
-
-
-
-
-
-
-
-
-
-
------------------
(62 563)
===========
-
-
-
-
-
-
-
-
-
-
-
-----------------
12 425
===========
*The impairment reversal on land and building arose due to fair value changes on the Group’s land and buildings measured using
the revaluation model.
54
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
8.
TAXATION
8.1
Income tax charge
Current tax
Deferred tax (note 18)
Current tax
Deferred tax (note 18)
GROUP
COMPANY
Inflation adjusted
2020
ZWL
130 053 612
(273 902 272)
------------------
(143 848 660)
===========
2019
ZWL
Restated
44 813 146
269 284 439
------------------
314 097 585
===========
2020
ZWL
-
47 064
------------------
47 064
===========
2019
ZWL
Restated
-
60 640
------------------
60 640
===========
GROUP
COMPANY
Historical
2020
ZWL
2019
ZWL
2020
ZWL
2019
ZWL
130 053 612
(215 567 932)
------------------
(85 514 320)
===========
9 989 877
34 514 671
------------------
44 504 548
===========
-
-
------------------
-
===========
-
(9 152)
------------------
(9 152)
===========
8.2
Reconciliation of income tax (credit)/charge
GROUP
COMPANY
Inflation adjusted
2020
ZWL
Based on results for the period at a rate of 24.72% 174 378 411
Tax effect of:
- Income not subject to tax*
- Non-deductible expenses**
- Change in tax bases***
(53 979 127)
62 246 824
(326 494 768)
------------------
(143 848 660)
===========
2019
ZWL
Restated
493 871 042
(223 083 068)
43 309 611
-
------------------
314 097 585
===========
2020
ZWL
10 428 443
2019
ZWL
Restated
22 107 117
(10 381 379)
-
-
------------------
47 064
===========
(22 046 477)
-
-
------------------
60 640
===========
*Income not subject to tax includes coupon interest from Treasury Bills and income from mortgages for the Group as well as
non-deductible income attributable to the unwinding of share based payments for the company.
** Non-deductible expenses include provisions, disallowable pension deductions and depreciation.
***The change in tax bases arose from the legislative pronouncement in the Finance (No.2 ) Act of 2020 which resulted in the
rebasing of unredeemed foreign currency capital balances on assets ranking for capital allowances using the USD/ZWL official
exchange rate prevailing on 1 January 2021.
55
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
8.
TAXATION (cont’d)
8.2
Reconciliation of income tax (credit)/charge (cont’d)
GROUP
COMPANY
Historical
2020
ZWL
2019
ZWL
2020
ZWL
2019
ZWL
Based on results for the period at a rate of 24.72% 444 979 506
Tax effect of:
- Income not subject to tax
- Non-deductible expenses**
- Change in tax bases
(266 245 882)
62 246 824
(326 494 768)
------------------
(85 514 320)
===========
85 079 310
16 110
968 186
(50 229 371)
9 654 609
-
------------------
44 504 548
===========
(16 110)
-
-
------------------
-
===========
(977 338)
-
-
------------------
(9 152)
===========
8.3
Current tax liabilities /(assets)
GROUP
COMPANY
Inflation adjusted
2020
ZWL
2 803 377
9 407 109
130 053 612
(85 059 033)
------------------
57 205 065
===========
2019
ZWL
Restated
(7 964 130)
31 092 547
44 813 146
(65 138 185)
------------------
2 803 378
===========
2020
ZWL
(338 772)
263 254
-
-
------------------
(75 518)
===========
2019
ZWL
Restated
(2 104 266)
1 765 494
-
-
------------------
(338 772)
===========
GROUP
COMPANY
Inflation adjusted
2020
ZWL
624 937
130 053 612
(73 473 483)
------------------
57 205 066
===========
2019
ZWL
Restated
(285 822)
9 989 877
(9 079 118)
------------------
624 937
===========
2020
ZWL
(75 518)
-
-
------------------
(75 518)
===========
2019
ZWL
Restated
(75 518)
-
-
------------------
(75 518)
===========
At 1 January
Monetary adjustment
Charge for the year
Payments during the year
8.3
Current tax liabilities /(assets) (cont’d)
At 1 January
Charge for the year
Payments during the year
9.
EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the profit for the year attributable to ordinary equity holders of NMBZ Holdings
Limited by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share is calculated by dividing the profit attributable to ordinary equity holders of NMBZ Holdings Limited
adjusted for the after tax effect of:
(a) any dividends or other items related to dilutive potential ordinary shares deducted in arriving at
profit or loss attributable to ordinary equity holders of the parent entity;
(b) any interest recognised in the period related to dilutive potential ordinary shares; and
(c) any other changes in income or expense that would result from the conversion of the dilutive potential ordinary shares;
by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of
ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.
56
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
9.1
Earnings
Inflation Adjusted
Historical Cost
31 December
2020
ZWL
31 December
2019
ZWL
Restated
31 December
2020
ZWL
31 December
2019
ZWL
Profit for the year
Headline earnings for the period
849 262 942
842 335 788
377 220 218
372 232 488
1 813 590 069
1 793 375 973
285 900 539
284 353 334
9.2
Number of shares
9.2.1
Basic earnings per share
Inflation adjusted
Historical Cost
31 December
2020
31 December
2019
31 December
2020
31 December
2019
Weighted average number of ordinary shares for
basic and headline earnings per share
404 171 689
399 498 150
404 171 689
399 498 150
9.2.2
Diluted earnings per share
Number of shares at beginning of period
Effect of dilution:
Share options exercised
Weighted average number of shares issued –
scrip dividend
Share options approved but not granted
404 171 689
392 955 196
404 171 689
392 955 196
-
-
-
-
-
-----------------
404 171 689
23 942 639
-----------------
428 114 328
==========
6 542 954
-----------------
399 498 150
23 942 639
-----------------
423 440 789
==========
-
-----------------
404 171 689
23 942 639
-----------------
428 114 328
==========
6 542 954
-----------------
399 498 150
23 942 639
-----------------
423 440 789
==========
Inflation Adjusted
Historical Cost
9.2.3
Headline earnings
Profit for the period
Add/(deduct) non-recurring items
Trade investments fair value gains
Profit on disposal of property and equipment
Loss/(profit) on disposal of investment properties
Tax thereon
Headline earnings
ZWL
ZWL
Restated
ZWL
ZWL
849 262 942
377 220 218
1 813 590 069
285 900 539
(3 645 884)
(7 881 999)
2 198 385
2 402 344
-----------------
842 335 788
==========
(4 097 075)
-
(2 620 407)
1 729 752
-----------------
372 232 488
==========
(9 265 541)
(7 091 399)
(10 867 431)
7 010 275
-----------------
1 793 375 973
==========
(1 499 630)
-
(584 149)
536 574
-----------------
284 353 334
==========
This is calculated in accordance with the Statement of Investment Practice No. 1 issued by the former Institute of Investment
Management and Research (now the Chartered Financial Analysts (CFA) Society of the UK).
57
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
9.3
Earnings per share (ZWL cents)
Basic
Diluted
Headline
10.
SHARE CAPITAL
10.1
Inflation Adjusted
Historical Cost
31 December
2020
ZWL
31 December
2019
ZWL
Restated
31 December
2020
ZWL
31 December
2019
ZWL
210.12
198.37
208.41
96.49
90.92
95.21
448.72
423.62
443.72
73.13
67.52
72.73
31 December
2020
Shares
million
31 December
2019
Shares
million
31 December
2020
ZWL
31 December
2019
ZWL
Authorised
Ordinary shares of ZWL0.00028 each
600
==========
600
==========
168 000
==========
168 000
==========
Inflation adjusted
31 December
2020
Shares
million
31 December
2019
Shares
million
31 December
2020
ZWL
31 December
2019
ZWL
Restated
404
==========
404
==========
3 574 680
==========
3 574 680
==========
Historical Cost
31 December
2020
Shares
million
404
==========
31 December
2019
Shares
million
404
==========
31 December
2020
ZWL
31 December
2019
ZWL
84 116
==========
84 116
==========
Inflation Adjusted
31 December
2020
Shares
million
31 December
2019
Shares
million
31 December
2020
ZWL
31 December
2019
ZWL
Restated
104
==========
104
==========
29 040
==========
130 269
==========
10.2
Issued and fully paid
10.2.1
Ordinary shares
Ordinary shares
Ordinary shares
10.2.2
Redeemable ordinary shares
Redeemable ordinary shares
58
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
10.2.2
Redeemable ordinary share
Historical Cost
Redeemable ordinary shares
31 December
2020
Shares
million
104
==========
31 December
2019
Shares
million
104
==========
31 December
2020
ZWL
31 December
2019
ZWL
29 040
==========
29 040
==========
Of the unissued ordinary shares of 196 million shares (2019 - 196 million), options which may be granted in terms of the 2012
ESOS amount to 23 942 639 (2019 – 23 942 639). No share options were exercised from the Scheme as at 31 December 2020.
Subject to the provisions of section 214 of the Companies and Other Business Entities Act (Chapter 24:31) of Zimbabwe, the
unissued shares are under the control of the directors.
11.
CAPITAL RESERVES
GROUP
COMPANY
Inflation adjusted
2020
ZWL
756 522 688
-
----------------
756 522 688
287 529 426
--------------------
1 044 052 114
===========
2019
ZWL
Restated
756 522 688
2 672 327
----------------
759 195 015
287 529 426
--------------------
1 046 724 441
===========
2020
ZWL
756 522 688
-
----------------
756 522 688
-
-------------------
756 522 688
===========
2019
ZWL
Restated
756 522 688
2 672 327
----------------
759 195 015
-
----------------
759 195 015
=========
GROUP
COMPANY
Historical
2020
ZWL
19 121 607
-
----------------
19 121 607
11 619 648
---------------
30 741 255
=========
2019
ZWL
19 121 607
62 563
----------------
19 184 170
11 619 648
---------------
30 803 818
=========
2020
ZWL
2019
ZWL
19 121 607
-
----------------
19 121 607
-
---------------
19 121 607
=========
19 121 607
62 563
----------------
19 184 170
-
---------------
19 184 170
=========
Share premium
Share option reserve
Functional currency translation reserve
Total capital reserve
Share premium
Share option reserve
Functional currency translation reserve
Total capital reserve
11.1
Nature and purpose of reserves
11.1.1
Share premium
This reserve represents the excess amount paid for the shares over and above the nominal value of the shares.
11.1.2
Share option reserve
The share option reserve is used to recognise the value of equity settled share based payment transactions provided to
employees, including key management personnel, as part of their remuneration. Refer to note 37.3 for further details of these
plans.
11.1.3
Functional currency translation reserve
The reserve arose out of translation gains on the Group’s land and buildings recorded on the change in the Group’s functional
currency during the period under review.
11.1.4
Revaluation reserve
The Reserve represent gains on the revaluation of land and buildings.
59
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
12.
RETAINED EARNINGS
Analysis of retained profit by company
Inflation adjusted
GROUP
COMPANY
2020
ZWL
516 136 635
1 816 157 255
--------------------
2 332 246 830
===========
-
2019
ZWL
Restated
473 903 313
975 166 845
--------------------
1 482 983 888
===========
21.93
2020
ZWL
516 136 635
-
--------------------
516 136 635
===========
-
2019
ZWL
Restated
473 903 313
-
--------------------
473 903 313
===========
21.93
GROUP
COMPANY
Historical
2020
ZWL
2019
ZWL
2020
ZWL
2019
ZWL
169 661
2 142 925 977
-------------------
2 143 095 638
===========
-
107 098
329 398 471
--------------------
329 505 569
===========
0.96
169 661
-
--------------------
169 661
===========
-
107 098
-
--------------------
107 098
===========
0.96
NMBZ Holdings Limited
NMB Bank Limited
Total retained earnings
Dividend per share (ZWL cents)
NMBZ Holdings Limited
NMB Bank Limited
Total retained earnings
Dividend per share (ZWL cents)
13.
REDEEMABLE ORDINARY SHARES
Inflation Adjusted Historical Cost
Nominal value (note 10.2.2)
Share premium
31 December
2020
ZWL
29 040
14 306 213
----------------
14 335 253
==========
31 December
2019
ZWL
Restated
130 269
64 175 606
----------------
64 305 875
==========
31 December
2020
ZWL
31 December
2019
ZWL
29 040
14 306 213
----------------
14 335 253
==========
29 040
14 306 213
----------------
14 335 253
==========
On 30 June 2013, the Group received USD14 831 145 capital from Nederlandse Financierings-Maatschappij Voor
Ontiwikkelingslanden N.V. (FMO), Norwegian Investment Fund for Developing Countries (Norfund) and AfricInvest Financial
Sector Holdings (AfricInvest) who were allocated 34 571 429 shares each (total 103 714 287) for individually investing USD4 943
715. This amount, net of share issue expenses, was used to recapitalise the Bank in order to contribute towards the minimum
capital requirements previously set by the Reserve Bank of Zimbabwe of ZWL200 million by 31 December 2020. FMO and
Norfund came together with Rabobank to form ARISE which is a development finance institution primarily focusing on investing
in African financial institutions to support and enhance financial service delivery in Africa.
NMBZ Holdings Limited (NMBZ) entered into a share buy-back agreement with Norfund, FMO and AfricInvest, where these three
strategic investors have a right at their own discretion at any time after the 5th anniversary (30 June 2018) but before the 9th
anniversary (30 June 2022) of its first subscription date, to request NMBZ to buy back all or part of its NMBZ shares at a price to
be determined using the agreed terms as entailed in the share buy-back agreement. It is a condition precedent that at any point
when the share buy-back is being considered, the proceeds used to finance the buy-back should come from the distributable
reserves which are over and above the minimum regulatory capital requirements. Further, no buy-back option can be exercised
by any investor after the 9th anniversary (30 June 2022) of the effective date.
The share buy-back agreement creates a potential obligation for NMBZ Holdings Limited to purchase its own instruments. The
shares issued gave rise to a potential financial liability and are classified as redeemable ordinary shares.
60
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
14.
SUBORDINATED LOAN
Inflation Adjusted Historical Cost
At 1 January
Monetary adjustment
Exchange revaluation
Interest capitalised
Interest paid
31 December
2020
ZWL
127 220 391
(98 860 051)
104 272 301
-
-
----------------
132 632 641
==========
31 December
2019
ZWL
Restated
41 953 193
(44 194 322)
116 108 249
16 955 691
(3 602 420)
----------------
127 220 391
==========
31 December
2020
ZWL
31 December
2019
ZWL
28 360 340
1 505 647
104 272 301
-
-
----------------
132 632 641
==========
25 883 189
1 151 954
(180 450)
----------------
28 360 340
==========
In 2013, the Bank received a subordinated term loan amounting to USD1.4 million from a Development Financial Institution
which attracts an interest rate of LIBOR plus 10% and has a seven year maturity date (13 June 2020) from the first disbursement
date.
The above liability would, in the event of the winding up of the issuer, be subordinated to the claims of depositors and all other
creditors of the issuer. The Group defaulted on a principal repayments with respect to this subordinated loan during the year
ended 31 December 2019 as a result of the prevailing nostro funding challenges affecting the economy. There was a breach on
the Aggregate Unhedged Open Foreign Currency Positions Ratio covenant which stood at 19.05% (instead of a maximum 10%)
between the Group and the Development Financial Institution at the reporting date of 31 December 2020. However, there were
no defaults on interest payments.
On 22 February 2019, the Reserve Bank of Zimbabwe (RBZ) issued an Exchange Control directive, RU 28 of 2019 which
established an interbank foreign exchange market to formalise the buying and selling of foreign currency through the Banks and
Bureaux de change. In order to establish an exchange rate between the current monetary balances and foreign currency, the
Monetary Authorities denominated the existing RTGS balances in circulation, as RTGS dollars. The RBZ pegged the initial trades
at US$/RTGS$1:2.5. In order to manage the transition, the RBZ also advised on the same date that all foreign liabilities or legacy
debts due to suppliers and service providers, declared dividends e.t.c would be treated separately after registering such debts
with the RBZ Exchange Control Department for an orderly expunging of these debts.
Consequently, the Group registered its legacy debts, which included the subordinated term loan and offshore lines of credit and
transferred the ZWL equivalent of these debts at a rate of US$/ZWL1:1 to the RBZ in terms of the RBZ directive. These legacy
debts and the related amounts transferred to the RBZ in terms of the RBZ directive on the legacy debts, have been translated
using the interbank rate at reporting date. During the period under review, the RBZ approved the legacy debt in respect of the
subordinated term loan.
15.
TOTAL SHAREHOLDERS’ FUNDS AND SHAREHOLDERS’ LIABILITIES
GROUP
COMPANY
Inflation adjusted
2020
ZWL
Shareholders’ funds and shareholders liabilities 3 868 525 309
-------------------
3 868 525 309
===========
2019
ZWL
Restated
3 211 913 897
-------------------
3 211 913 897
============
2020
ZWL
2019
ZWL
Restated
1 300 978 883
-------------------
1 300 978 883
============ ============
1 290 569 256
-------------------
1 290 569 256
GROUP
COMPANY
Historical
2020
ZWL
2019
ZWL
2020
ZWL
2019
ZWL
Shareholders’ funds and shareholders liabilities 3 061 660 579
-------------------
3 061 660 579
===========
579 169 046
-------------------
579 169 046
===========
33 710 637
-------------------
33 710 637
===========
33 710 637
-------------------
33 710 637
===========
Shareholders’ funds and shareholders’ liabilities refer to the total investments made by the shareholders into the Group and it
consists of share capital (refer to Note 10), capital and reserves (refer to Note 11), functional currency translation reserve (refer
to Note 11), retained earnings (refer to Note 12), redeemable ordinary shares (refer to Note 13) and the subordinated loan (refer
to Note 14).
61
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
16.
DEPOSITS AND OTHER LIABILITIES
16.1
Deposits and other liabilities by type
Deposits from banks and other
financial institutions**
Current and deposit accounts from customers*
Total deposits
Trade and other payables*
Deposits from banks and other
financial institutions**
Current and deposit accounts from customers*
Total deposits
Trade and other payables*
Inflation adjusted
GROUP
COMPANY
2020
ZWL
1 603 493 431
4 659 257 433
--------------------
6 262 750 864
151 192 601
--------------------
6 413 943 465
===========
2019
ZWL
Restated
1 386 184 358
3 956 827 863
--------------------
5 343 012 221
309 121 654
--------------------
5 652 133 875
===========
2020
ZWL
2019
ZWL
Restated
-
-
--------------------
-
414 135
--------------------
414 135
===========
-
-
--------------------
-
1 857 750
--------------------
1 857 750
===========
GROUP
COMPANY
Historical
2020
ZWL
2019
ZWL
2020
ZWL
2019
ZWL
1 603 493 431
4 659 257 433
-------------------
6 262 750 864
151 192 601
-------------------
6 413 943 465
===========
309 012 254
882 067 591
-------------------
1 191 079 845
77 066 171
-------------------
1 268 146 016
===========
-
-
-------------------
-
414 135
-------------------
414 135
===========
-
-
-------------------
-
414 135
-------------------
414 135
===========
* The carrying amounts of current and deposit accounts and trade and other payables approximate the related fair values due
to their short term nature.
Included in trade and other payables are lease liabilities ranging from 1 to 5 years in respect of leased properties in which the
Group is a lessee.
Also included in trade and other liabilities are ECL provisions in respect of guarantees and facilities approved but not drawn
down.
** Included in deposits from banks and other financial institutions are loan balances of ZWL707 186 403 (2019 – ZWL654
115 604), ZWL365 711 501 (2019 – ZWL330 653 630) and ZWL484 792 463 (2019 – ZWL90 292 554) due to Nederlandse
Financierings-Maatschappij Voor Ontiwikkelingslanden (FMO), Swedfund and Afreximbank. The carrying amounts of deposits
from other banks and other financial institutions approximate the related fair values. All the loan balances except for Afreximbank
are part of the Group’s legacy debts which were registered with the Reserve Bank of Zimbabwe (RBZ) for an orderly expunging
of the debts. During the previous reporting period, the Group transferred the ZWL equivalent of the legacy debts at a rate of US$/
ZWL1:1 to the RBZ as per requirement of the Exchange Control directive RU 28 of 2019. There were no breaches to the financial
covenants. However, the Group defaulted on the principal repayments repayments on the FMO and Swedfund facilities during
the period under review due to the nostro-funding challenges that were prevailing in the economy and subsequent to period end,
the above mentioned lines of credit balances have since been transferred to the RBZ for an orderly expunging of the debts. The
Bank has been communicating with the lenders regarding these developments.
The line of credit balances have been translated at 31 December 2020 at the closing rate of USD/ZWL81.7368. Consequently,
the amount transferred to the RBZ for the settlement of these debts has been translated at the same closing rate as it represents
the Bank’s right to the settlement of the related lines of credit. During the period under review, the RBZ approved the legacy debt
in respect of the FMO and Swedfund lines of credit.
62
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
16.
DEPOSITS AND OTHER LIABILITIES (Cont’d)
16.2
Maturity analysis Inflation Adjusted Historical
31 December
2020
ZWL
31 December
2019
ZWL
Restated
31 December
2020
ZWL
31 December
2019
ZWL
Less than 1 month
1 to 3 months
3 to 6 months
6 months to 1 year
1 to 5 years
Over 5 years
5 498 905 442
749 093 396
9 281 600
2 145 131
3 160 969
164 326
--------------------
6 262 750 864
===========
The maturity analysis covers the Group’s total deposits only and does not include other trade payables.
4 686 461 205
226 671 312
151 148 281
197 063 165
80 807 732
860 526
--------------------
5 343 012 221
===========
5 498 905 442
749 093 396
9 281 600
2 145 131
3 160 969
164 326
--------------------
6 262 750 864
===========
16.3
Sectoral analysis of deposits
Agriculture
Banks and other financial institutions
Distribution
Individuals
Manufacturing
Mining companies
Municipalities and parastatals
Other deposits
Services
Transport and telecommunications
Agriculture
Banks and other financial institutions
Distribution
Individuals
Manufacturing
Mining companies
Municipalities and parastatals
Other deposits
Services
Transport and telecommunications
Inflation adjusted
GROUP
2019
ZWL
Restated
113 854 228
1 386 184 358
535 137 029
462 209 895
736 800 679
90 869 882
260 152 204
519 515 687
969 121 283
269 166 976
-------------------
5 343 012 221
===========
%
2
26
9
10
12
2
4
13
18
4
--------
100
=====
Historical
GROUP
2019
ZWL
25 380 717
309 012 254
119 294 305
103 037 176
164 249 753
20 256 979
57 993 887
115 811 950
216 039 339
60 003 485
-------------------
1 191 079 845
===========
%
2
26
9
10
12
2
4
13
18
4
--------
100
=====
2020
ZWL
136 424 405
1 603 493 431
567 405 668
622 092 240
742 623 796
108 883 701
275 200 417
781 769 028
1 146 241 726
278 616 452
-------------------
6 262 750 864
===========
2020
ZWL
136 424 405
1 603 493 431
567 405 668
622 092 240
742 623 796
108 883 701
275 200 417
781 769 028
1 146 241 726
278 616 452
-------------------
6 262 750 864
===========
1 044 719 581
50 530 229
33 694 415
43 929 895
18 013 895
191 830
--------------------
1 191 079 845
===========
%
2
26
10
9
14
2
5
10
18
4
----------
100
======
%
2
26
10
9
14
2
5
10
18
4
----------
100
======
63
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
16.4
Lease Liabilites Inflation Adjusted Historical
At 1 January
Monetary adjustment
Remeasurements
Finance costs accrual
Payment of lease liabilities
31 December
2020
ZWL
14 978 271
(10 277 836)
36 968 582
13 205 194
(30 928 423)
--------------------
23 945 788
===========
31 December
2020
ZWL
31 December
2019
ZWL
3 338 967
-
29 233 252
6 031 589
(14 658 020)
--------------------
23 945 788
===========
3 078 687
-
757 613
778 710
(1 276 043)
--------------------
3 338 967
===========
31 December
2019
ZWL
Restated
30 443 511
(3 574 861)
3 398 610
3 493 181
(18 782 170)
--------------------
14 978 271
===========
GROUP
17.1
Investment securities Inflation Adjusted Historical
Amortised cost – Gross
Impairment allowance – Stage 1 20.3
31 December
2020
ZWL
1 086 000 591
(4 180 134)
--------------------
1 081 820 457
===========
31 December
2019
ZWL
Restated
31 December
2020
ZWL
31 December
2019
ZWL
482 537 469
(1 805 570)
--------------------
480 731 899
===========
1 086 000 591
(4 180 134)
--------------------
1 081 820 457
===========
107 568 657
(402 502)
--------------------
107 166 155
===========
The Group holds Treasury Bills and Government Bonds amounting to ZWL1 086 000 591 with interest rates ranging from 5% to
18%. The Treasury Bills are measured at amortised cost in line with the Bank’s business model to collect contractual cashflows
and the contractual terms are such that the financial assets give rise to cashflows that are solely payments of principal and
interest. Of the total Treasury Bills balance of ZWL1 081 820 457, a total of ZWL173 295 710 had been pledged as security
against interbank borrowings.
17.2
Maturity analysis of investment securities – amortised cost
Inflation Adjusted Historical
Less than 1 month
1 to 3 months
3 to 6 months
6 months to 1 year
1 to 5 years
Over 5 years
Expected Credit loss allowance
31 December
2020
ZWL
400 000 000
450 000 000
100 360 440
124 257 920
-
11 382 231
(4 180 134)
--------------------
1 081 820 457
===========
31 December
2019
ZWL
Restated
11 214 639
28 664 954
85 231 257
245 768 444
60 599 131
51 059 044
(1 805 570)
--------------------
480 731 899
===========
31 December
2020
ZWL
31 December
2019
ZWL
400 000 000
450 000 000
100 360 440
124 257 920
-
11 382 231
(4 180 134)
--------------------
1 081 820 457
===========
2 500 000
6 390 075
19 000 000
54 787 417
13 508 934
11 382 231
(402 502)
--------------------
107 166 155
===========
The maturity analysis is based on the present value of future cashflows.
64
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
17.3
Fair values of financial instruments
The fair values of financial assets and financial liabilities that are traded in active markets are based on quoted market prices or
dealer price quotations. For all other financial instruments, the Group determines fair values using other valuation techniques.
For financial instruments that trade infrequently and have little price transparency, fair value is less objective, and requires
varying degrees of judgement depending on liquidity, concentration, uncertainty of market factors, pricing assumptions and other
risks affecting the specific instrument.
The objective of valuation techniques is to arrive at a fair value measurement that reflects the price that would be received to sell
the asset or paid to transfer the liability in an orderly transaction between market participants at the measurement date.
Valuation models
The Group measures fair values using the following fair value hierarchy, which reflects the significance of the inputs used in
making the measurements.
•
•
•
Level 1: inputs that are quoted market prices (unadjusted) in active markets for identical instruments;
Level 2: inputs other than quoted prices included within Level 1 that are observable either directly (i.e. as prices) or
indirectly (i.e. derived from prices). This category includes instruments valued using: quoted market prices in active
markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less
than active; or other valuation techniques in which all significant inputs are directly or indirectly observable from market
data; and
Level 3: inputs that are unobservable. This category includes all instruments for which the valuation technique includes
inputs not based on observable data and the unobservable inputs have a significant effect on the instrument’s valuation.
This category includes instruments that are valued based on quoted prices for similar instruments for which significant
unobservable adjustments or assumptions are required to reflect differences between the instruments.
The objective of valuation techniques is to arrive at a fair value measurement that reflects the price that would be received to sell
the asset or paid to transfer the liability in an orderly transaction between market participants at the measurement date.
During the reporting periods ended 31 December 2020 and 31 December 2019, there were no transfers between Level 1 and
Level 2 fair value measurements, and no transfers into and out of Level 3 fair value measurements.
Financial instruments measured at fair value - fair value hierarchy
Inflation Adjusted
Trade investments
Trade investments
31 Dec
2020
ZWL
10 877 672
----------------
10 877 672
=========
31 Dec
2019
ZWL
Restated
7 231 788
----------------
7 231 788
=========
Level 1
ZWL
-
----------------
-
=========
Level 2
ZWL
Level 3
ZWL
-
----------------
-
=========
10 877 672
---------------
10 877 672
=========
Level 1
ZWL
Level 2
ZWL
Level 3
ZWL
Restated
-
----------------
-
=========
-
----------------
-
=========
7 231 788
----------------
7 231 788
=========
65
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
Financial instruments measured at fair value - fair value hierarchy
Historical Cost
Trade investments
Trade and other investments
31 Dec
2020
ZWL
10 877 672
----------------
10 877 672
=========
31 Dec
2019
ZWL
1 612 131
----------------
1 612 131
=========
Level 1
ZWL
-
----------------
-
=========
Level 1
ZWL
-
----------------
-
=========
Level 2
ZWL
Level 3
ZWL
-
----------------
-
=========
10 877 672
---------------
10 877 672
=========
Level 2
ZWL
Level 3
ZWL
-
----------------
-
=========
1 612 131
----------------
1 612 131
=========
17.3
Financial instruments not measured at fair value
Below is a list of the Group’s financial investments not measured at fair value, but whose carrying amounts approximate fair
value.
Inflation Adjusted Historical
Cash and cash equivalents
Loans, advances and other accounts
Investment securities
Liabilities
Deposits and other liabilities
31 December
2020
ZWL
1 964 637 240
3 992 648 603
1 081 820 457
--------------------
7 039 106 300
===========
6 413 943 465
----------------------
6 413 943 465
============
31 December
2019
ZWL
Restated
2 208 405 864
3 824 449 644
480 731 899
-------------------
6 513 587 407
===========
31 December
2020
ZWL
31 December
2019
ZWL
1 964 634 240
3 730 886 733
1 081 820 457
-------------------
6 777 344 430
===========
492 304 267
817 960 242
107 166 155
--------------------
1 417 430 664
===========
5 652 133 875
----------------------
5 652 133 875
============
6 413 943 465
----------------------
6 413 943 465
============
1 268 146 016
----------------------
1 268 146 016
============
17.3
Financial instruments not measured at fair value
Below is a list of the Group’s financial investments not measured at fair value, but whose carrying amounts approximate fair
value.
Cash and cash equivalents consists of balances with the Central Bank, other banks and cash with original maturities of three
months or less. These balances are subject to insignificant risk of change in their fair value. It is the Directors’ assessment that
the carrying amount of these balances approximates their fair value at any given time.
Loans, advances and other assets
he estimated fair value of loans, advances and other assets is estimated to approximate the carrying amount due to non-
availability of benchmark interest rates to discount the expected future cash flows thereof. The Directors believe that current
interest rates are market related and would re-issue the loans at the same interest rate if needed. It is from this assessment that
Directors believe that the carrying amount of these balances reasonably approximate fair value as discounting the future cash
flow using the current interest rates would not result in significant differences from the carrying amount.
Investment securities
These financial assets consist of open market treasury bills and government bonds. There is currently no observable active
market for these instruments; or a reliable proxy to discount the expected future cash flows. Directors believe that the carrying
amount approximates fair value on these instruments. In performing this assessment, Directors have determined that interest
rates are consistent with the latest transactions that the Group entered into and the average tenor of the portfolio was short-term
in nature.
66
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
17.3
Financial instruments not measured at fair value (Continued)
Below is a list of the Group’s financial investments not measured at fair value, but whose carrying amounts approximate fair
Deposits and other liabilities
The estimated fair value of deposits with no stated maturity, which includes non-interest bearing deposits, is the amount
repayable on demand. The estimated fair value of fixed interest-bearing deposits approximates the carrying amount as interest
rates quoted are market related. It is the view of Directors that the carrying amounts of these assets and liabilities reasonably
approximate fair values.
18.
DEFERRED TAX
The following table shows deferred tax (assets)/liabilities recorded in the statement of financial position and changes recorded
in the statement of financial position and changes recorded in the income tax expense:
GROUP
COMPANY
Inflation Adjusted
31 December
2020
ZWL
(39 547 624)
(5 919 399)
25 338 976
543 886
219 385 704
48 381 656
70 733 839
(100 892)
(1 945 366)
(25 081)
(25 805 634)
--------------------
291 040 065
505 497 805
-------------------
214 457 740
(273 902 272)
31 December
2019
ZWL
Restated
(27 423 693)
(3 702 592)
4 542 712
1 446 357
62 843 787
384 003 237
115 222 237
(398 211)
(2 530 902)
(112 485)
(28 392 642)
--------------------
505 497 805
(32 430 765)
---------------------
537 928 570
269 284 439
31 December
2020
ZWL
31 December
2019
ZWL
Restated
-
-
-
-
-
-
-
-
(9 152)
(4 352)
---------------------
(13 504)
(60 568)
-------------------
47 064
47 064
-
-
-
-
-
-
(41 055)
(19 513)
------------------
(60 568)
(121 208)
-------------------
60 640
60 640
59 444 532
268 644 131
-
-
Allowance for impairment losses on
financial assets
Lease liabilities
Right of use assets
Quoted and other investments
Investment properties
Property and equipment
Unrealised foreign exchange gains
Suspended interest
Deferred income
Assessed losses
Provisions
Closing deferred tax liabilities/(assets)
Restated opening balance at 1 January 2020
Current year charge/(credit)
Relating to profit or loss (note 8.1)
Relating to other comprehensive
income (note 6.3)
67
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
18.
DEFERRED TAX (continued)
The following table shows deferred tax (assets)/liabilities recorded in the statement of financial position and changes recorded
in the statement of financial position and changes recorded in the income tax expense:
GROUP
COMPANY
Historical
31 December
2020
ZWL
(39 547 624)
(5 919 399)
5 794 183
543 886
219 385 704
(48 385 822)
70 733 839
(100 892)
(1 945 366)
(25 081)
(25 805 634)
--------------------
174 727 794
97 653 191
-------------------
77 074 603
(215 567 933)
31 December
2019
ZWL
Restated
(6 113 370)
(825 393)
1 012 675
322 428
14 009 320
70 569 270
25 685 677
(88 770)
(564 196)
(25 081)
(6 329 369)
--------------------
97 653 191
(1 908 532)
---------------------
99 561 723
34 514 671
31 December
2020
ZWL
31 December
2019
ZWL
Restated
-
-
-
-
-
-
-
-
(9 152)
(4 352)
---------------------
(13 504)
(13 504)
-------------------
-
-
-
-
-
-
-
-
(9 152)
(4 352)
------------------
(13 504)
(4 352)
-------------------
(9 152)
(9 152)
292 642 536
65 047 052
-
-
Allowance for impairment losses on
financial assets
Lease liabilities
Right of use assets
Quoted and other investments
Investment properties
Property and equipment
Unrealised foreign exchange gains
Suspended interest
Deferred income
Assessed losses
Provisions
Closing deferred tax liabilities/(assets)
Restated opening balance at 1 January 2020
Current year charge/(credit)
Relating to profit or loss (note 8.1)
Relating to other comprehensive
income (note 6.3)
19. CASH AND CASH EQUIVALENTS
The following table shows deferred tax (assets)/liabilities recorded in the statement of financial position and changes recorded
in the statement of financial position and changes recorded in the income tax expense:
Balances with Reserve Bank of Zimbabwe
Balances with the Central Bank**
Current, nostro accounts* and cash
Interbank placements
Expected Credit loss allowance
GROUP
COMPANY
Inflation Adjusted
31 December
2020
ZWL
416 178 289
1 394 496 343
155 000 000
(1 037 392)
-------------------
1 964 637 240
===========
31 December
2019
ZWL
Restated
1 197 870 374
718 678 470
293 823 543
(1 966 523)
-------------------
2 208 405 864
===========
31 December
2020
ZWL
-
13 635
-
-
-------------------
13 635
===========
31 December
2019
ZWL
Restated
-
61 165
-
-
-------------------
61 165
===========
68
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
19. CASH AND CASH EQUIVALENTS (Continued)
The following table shows deferred tax (assets)/liabilities recorded in the statement of financial position and changes recorded
in the statement of financial position and changes recorded in the income tax expense:
Balances with the Central Bank
Current, nostro accounts* and cash
Interbank placements
Expected Credit loss allowance
GROUP
COMPANY
Historical
31 December
2020
ZWL
416 178 289
1 394 496 343
155 000 000
(1 037 392)
-------------------
1 964 637 240
===========
31 December
2019
ZWL
31 December
2020
ZWL
31 December
2019
ZWL
267 032 753
160 209 897
65 500 000
(438 383)
-----------------
492 304 267
==========
-
13 635
-
-
------------
13 635
=======
-
13 635
-
-
-------------
13 635
=======
*Nostro accounts are foreign domiciled bank accounts operated by the Bank for the facilitation of offshore transactions on behalf
of clients.
**Balances with the Central Bank, other banks and cash are used to facilitate customer and the Bank’s transactions which
include payments and cash withdrawals.
20.
TOTAL LOANS, ADVANCES AND OTHER ASSETS
The following table shows deferred tax (assets)/liabilities recorded in the statement of financial position and changes recorded
in the statement of financial position and changes recorded in the income tax expense:
Fixed term loans – Corporate
Fixed term loans – Retail
Mortgages
Overdrafts
Other assets
Fixed term loans – Corporate
Fixed term loans – Retail
Mortgages
Overdrafts
Other assets
GROUP
COMPANY
Inflation Adjusted
31 December
2020
ZWL
1 562 652 442
281 313 339
93 469 773
361 361 619
-------------------
2 298 797 173
1 693 851 430
-------------------
3 992 648 603
===========
31 December
2019
ZWL
Restated
1 187 356 239
425 135 512
262 816 821
437 823 811
--------------------
2 313 132 383
1 511 317 261
-------------------
3 824 449 644
===========
31 December
2020
ZWL
31 December
2019
ZWL
Restated
-
-
-
-
--------------
-
2 531 106
--------------
2 531 106
========
-
-
-
-
---------------
-
14 026 500
----------------
14 026 500
=========
GROUP
COMPANY
Historical
31 December
2020
ZWL
1 562 652 442
281 313 339
93 469 773
361 361 619
-------------------
2 298 797 173
1 432 089 560
-------------------
3 730 886 733
===========
31 December
2019
ZWL
Restated
264 688 911
94 772 446
58 587 891
97 600 959
-------------------
515 650 207
302 310 035
-------------------
817 960 242
===========
31 December
2020
ZWL
-
-
-
-
-------------------
31 December
2019
ZWL
Restated
-
-
-
-
-------------------
2 531 106
-------------------
2 531 106
===========
2 531 106
-------------------
2 531 106
===========
69
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
20.
TOTAL LOANS, ADVANCES AND OTHER ASSETS (cont’d)
20.1
Maturity analysis
Less than 1 month
1 to 3 months
3 to 6 months
6 months to 1 year
1 to 5 years
Over 5 years
Total advances
Allowances for impairment losses
on loans and advance
ECL at 1 January
Monetary adjustment
ECL charged through profit or loss
Bad debts written off
Suspended interest on credit impaired
financial assets
Other assets
GROUP
COMPANY
Inflation Adjusted
31 December
2020
ZWL
1 033 855 947
289 817 298
123 458 690
285 085 872
601 281 710
118 490 170
------------------
2 451 989 687
(152 784 373)
(76 776 964)
59 661 621
(139 000 331)
3 331 301
(408 141)
-----------------
2 298 797 173
1 693 851 430
------------------
3 992 648 603
===========
31 December
2019
ZWL
Restated
621 004 551
287 785 692
97 071 834
473 261 772
689 385 946
222 945 992
------------------
2 391 455 787
(76 776 964)
(370 608 882)
310 943 909
(22 113 552)
5 001 561
(1 546 440)
-----------------
2 313 132 383
1 511 317 261
------------------
3 824 449 644
===========
31 December
2020
ZWL
-
-
-
-
-
-
------------------
-
31 December
2019
ZWL
Restated
-
-
-
-
-
-
------------------
-
-
-
-
-
-
-
-
-
-
-
-
-----------------
-
2 531 106
------------------
2 531 106
===========
-
-----------------
-
14 026 500
------------------
14 026 500
===========
The Bank is continuing recovery efforts in respect of loans written off in the year under review amounting to ZWL3 331 301.
Less than 1 month
1 to 3 months
3 to 6 months
6 months to 1 year
1 to 5 years
Over 5 years
Total advances
Allowances for impairment losses on
loans and advance
ECL at 1 January
ECL charge through profit or loss
Bad debts written off
Suspended interest on credit impaired
financial assets
Other assets
GROUP
COMPANY
Historical
31 December
2020
ZWL
31 December
2019
ZWL
31 December
2020
ZWL
31 December
2019
ZWL
1 033 855 947
289 817 298
123 458 690
285 085 872
601 281 710
118 490 170
--------------------
2 451 989 687
(152 784 373)
(17 115 343)
(139 000 331)
3 331 301
(408 141)
--------------------
2 298 797 173
1 432 089 560
--------------------
3 730 886 733
============
138 436 142
64 154 025
21 639 536
105 500 893
153 679 923
49 699 770
--------------------
533 110 289
(17 115 343)
(13 300 690)
(4 929 615)
1 114 962
(344 739)
--------------------
515 650 207
302 310 035
--------------------
817 960 242
===========
-
-
-
-
-
-
--------------------
-
-
-
-
-
-
-
--------------------
-
-
-
-
-
-
-
-
-
-
--------------------
-
2 531 106
--------------------
2 531 106
-
--------------------
-
2 531 106
--------------------
2 531 106
=========== ============
The Bank is continuing recovery efforts in respect of loans written off in the year under review amounting to ZWL3 331 301.
70
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
20.
TOTAL LOANS, ADVANCES AND OTHER ASSETS (cont’d)
20.2
Sectoral analysis of utilisations
Inflation Adjusted
GROUP
31 December
2019
ZWL
Restated
434 087 244
10 754 380
393 795 281
132 143 741
566 169 298
273 362 783
5 190 674
576 952 386
-------------------
2 391 455 787
===========
%
23
2
10
9
16
12
-
28
--------
100
=====
%
18
1
16
6
24
11
-
24
----------
100
======
31 December
2020
ZWL
576 171 487
41 000 000
244 984 807
220 830 811
386 873 236
303 504 490
1 169 804
677 455 052
-------------------
2 451 989 687
===========
Agriculture and horticulture
Conglomerates
Distribution
Food & beverages
Individuals
Manufacturing
Mining
Services
The material concentration of loans and advances is with services sector at 28% (2019 - 24%) and agriculture and horticulture
sector at 23 % (2019 - 18%).
Agriculture and horticulture
Conglomerates
Distribution
Food & beverages
Individuals
Manufacturing
Mining
Services
Historical
GROUP
31 December
2020
ZWL
96 767 992
2 397 398
87 785 991
29 457 868
126 212 109
60 715 905
1 157 120
128 615 906
-------------------
533 110 289
===========
%
23
2
10
9
16
12
-
28
--------
100
=====
%
18
1
16
6
24
11
-
24
----------
100
======
31 December
2020
ZWL
576 171 487
41 000 000
244 984 807
220 830 811
386 873 236
303 504 490
1 169 804
677 455 052
-------------------
2 451 989 687
===========
The material concentration of loans and advances is with services sector at 28% (2019 - 24%) and agriculture and horticulture
sector at 23 % (2019 - 18%).
71
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
20.
TOTAL LOANS, ADVANCES AND OTHER ASSETS (cont’d)
20.3
Impairment analysis of financial assets measured at amortised cost
Inflation Adjusted
Stage 1
Stage 2
Stage 3
ZWL
ZWL
ZWL
Total
ZWL
Gross carrying amount at 1 January 2020
Monetary adjustment
3 998 366 764
(3 107 039 200)
52 618 440
(40 888 584)
32 665 167
(25 383 352)
4 083 650 371
(3 173 311 137)
Transfers
- to 12 months to ECL
- to lifetime ECL not credit impaired
- to lifetime ECL credit impaired
Net movement in financial assets
Balance as at 31 December 2020
Loss allowance analysis
At 1 January 2020
- ECL – Loans, advances & guarantees
- ECL – Guarantees and facilities approved
not drawn down
- ECL – Investment securities
- ECL – Interbank placements
Monetary adjustment
Transfers
- to 12 month ECL
- to lifetime ECL not credit impaired
- to lifetime ECL credit impaired
(18 745 248) 15 638 978
(11 255 119)
27 935 519
(1 041 422)
13 364 320
----------------
40 733 154
=========
11 520 254
(27 771 744)
(2 493 758)
2 924 011 632
---------------------
3 796 593 948
============
3 106 270
(265 135)
(163 775)
3 535 180
328 726
----------------
10 716 810
=========
89 981 483
55 237 491
3 677 029
3 677 029
17 862 444
17 862 444
30 971 903
1 805 566
1 966 523
(69 922 552)
-
-
-
(2 857 335)
-
-
-
(13 880 496)
(5 544 987)
1 144 087
(6 211 014)
(478 060)
4 604 170
(1 123 468)
6 247 125
(519 487)
940 818
(20 619)
(36 111)
997 548
-
-
-
-
2 937 704 678
--------------------
3 848 043 912
===========
111 520 956
76 776 964
30 971 903
1 805 566
1 966 523
(86 660 383)
-
-
-
-
Net increase/(decrease) in ECL
Loans and advances
Guarantees and facilities approved not drawn down
Investment securities
Interbank placements
Bad debts written off
Revaluation exchange on loans and advances ECL
122 188 399
122 753 705
(4 923 947)
3 777 631
599 010
-
7 146 984
3 780 921
3 780 921
-
-
-
-
-
2 005 420
5 336 721
-
-
-
(3 331 301)
-
127 974 740
131 853 347
(4 923 947)
3 777 631
599 010
(3 331 301)
7 146 984
Balance as at 31 December 2020
Loans and advances
Guarantees and facilities approved not drawn down
Investment securities
Interbank placements
----------------
143 849 327
=========
----------------
9 204 785
=========
----------------
6 928 186
=========
136 651 402
1 980 399
4 180 134
1 037 392
----------------
143 849 327
=========
9 204 785
-
-
-
----------------
9 204 785
=========
6 928 186
-
-
-
----------------
6 928 186
=========
----------------
159 982 298
=========
152 784 373
1 980 399
4 180 134
1 037 392
----------------
159 982 298
=========
72
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
20.
LOANS, ADVANCES AND OTHER ASSETS (cont’d)
20.3
Impairment analysis of financial assets measured at amortised cost
Gross carrying amount at 1 January 2019
Monetary adjustment
Inflation Adjusted
Stage 1
ZWL
Restated
10 372 667 341
(8 657 895 019)
Stage 2
ZWL
Restated
569 220 752
(632 066 397)
Stage 3
ZWL
Restated
445 219 314
(455 393 530)
Total
ZW
Restated
11 387 107 407
(9 745 354 946)
Transfers
- to 12 months to ECL
- to lifetime ECL not credit impaired
- to lifetime ECL credit impaired
(44 193 878)
6 023 795
(46 356 437)
(3 861 236)
50 132 828
(5 524 068)
57 584 624
(1 924 728)
(5 938 950)
(496 728)
(11 228 186)
5 785 964
-
-
-
Net movement in financial assets
2 327 788 320
65 331 257
48 778 333
2 441 897 910
Balance as at 31 December 2019
---------------------
3 998 366 764
============
------------------
52 618 440
==========
------------------
32 665 167
==========
---------------------
4 083 650 371
============
Loss allowance analysis
At 1 January 2019
- ECL – Loans, advances & guarantees
- ECL – Investment securities
- ECL – Interbank placements
Transfers
- to 12 month ECL
- to lifetime ECL not credit impaired
- to lifetime ECL credit impaired
Net increase/(decrease) in ECL
Loans and advances
Guarantees and facilities approved not drawn down
Investment securities
Interbank placements
Bad debts written off
Balance as at 31 December 2019
Loans and advances
Guarantees and facilities approved not drawn down
Investment securities
Interbank placements
Balance as at 31 December 2019
34 762 887
32 469 190
1 993 469
300 228
(3 881 638)
157 593
(3 040 060)
(999 171)
59 100 228
26 649 947
30 971 885
(187 900)
1 666 296
-
----------------
89 981 477
=========
55 237 500
30 971 885
1 805 570
1 966 523
----------------
89 981 477
=========
3 828 104
3 828 104
-
-
3 930 852
(146 903)
4 593 817
(516 062)
(4 081 927)
(4 081 927)
-
-
-
-
----------------
3 677 029
=========
3 677 029
-
-
-
----------------
3 677 029
=========
23 367 674
23 367 674
-
-
(49 214)
(10 690)
(1 553 757)
1 515 233
(5 456 025)
(454 464)
-
-
-
(5 001 561)
----------------
17 862 435
=========
17 862 435
-
-
-
----------------
17 862 435
=========
61 958 665
59 664 968
1 993 469
300 228
-
-
-
-
49 562 276
22 113 547
30 971 885
(187 900)
1 666 296
(5 001 561)
----------------
111 520 941
=========
76 776 964
30 971 885
1 805 570
1 966 523
----------------
111 520 941
=========
20.4
Credit-impaired financial assets
Inflation Adjusted Historical Cost
Total credit impaired financial assets
Expected credit losses on credit
impaired financial assets
Retail loans insurance
Suspended interest on credit-impaired
financial assets
Net credit impaired financial assets
31 December
2020
ZWL
10 716 808
(6 928 186)
(499 057)
(408 141)
---------------
2 881 424
=========
GROUP
31 December
2019
ZWL
Restated
32 665 167
31 December
2020
ZWL
31 December
2019
ZWL
10 716 808
7 281 814
(17 862 444)
(2 238 696)
(6 928 186)
(499 057)
(3 981 948)
(499 057)
(1 546 440)
-----------------
11 017 587
==========
(408 141)
---------------
2 881 424
=========
(344 739)
------------------
2 456 070
==========
The net credit impaired financial assets represents recoverable portions covered by realisable security, which includes
guarantees, cessation of debtors, mortgages over properties, equities and promissory notes all fair valued at ZWL1 276 250
(2019 – ZWL42 146 249).
73
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
20.
LOANS, ADVANCES AND OTHER ASSETS (cont’d)
20.5
Other assets
Services deposits*
Prepayments and stocks**
Other receivables
GROUP
COMPANY
Inflation Adjusted
31 December
2020
ZWL
228 315 924
331 303 860
1 134 231 646
-------------------
1 693 851 430
===========
31 December
2019
ZWL
Restated
160 775 435
212 400 071
1 138 141 755
-------------------
1 511 317 261
===========
31 December
2020
ZWL
-
-
2 531 105
-------------------
2 531 105
===========
31 December
2019
ZWL
Restated
-
-
5 342
-------------------
5 342
===========
*Service deposits relate to amounts pledged as collateral for VISA and the RTGS accounts.
** Prepayments and stocks are in respect of services, utilities and consumables for the Group.
*** Included in other receivables is ZWL1 128 781 333 placed with the RBZ for the facilitation of legacy debts settlement in terms
of regulatory directives.
Services deposits*
Prepayments and stocks
Other receivables
GROUP
COMPANY
Historical
31 December
2020
ZWL
228 315 924
69 494 935
1 134 278 706
-------------------
1 432 089 565
===========
31 December
2019
ZWL
31 December
2020
ZWL
31 December
2019
ZWL
35 840 528
12 751 635
253 717 872
-------------------
302 310 035
===========
-
-
2 531 105
-------------------
2 531 105
===========
-
-
2 531 105
-------------------
2 531 105
===========
20.6
Loans to officers and executive directors
GROUP
Inflation Adjusted Historical
Included in advances and other accounts
(note 20) are loans to officers:-
At 1 January
Monetary adjustment
Net additions during the year
Expected credit loss allowance on
loans to officers
Balance at 31 December
31 December
2020
ZWL
31 December
2019
ZWL
Restated
31 December
2020
ZWL
31 December
2019
ZWL
137 684 546
(153 820 186)
85 971 642
-------------------
69 836 002
(5 067 579)
---------------
64 768 423
=========
335 563 892
(268 460 724)
70 581 378
-------------------
137 684 546
27 693 040
-
42 142 962
-------------------
69 836 002
(218 685)
-------------------
137 465 861
===========
(5 067 579)
-------------------
64 768 423
===========
11 955 832
-
15 737 208
-------------------
27 693 040
(48 750)
-------------------
27 644 290
===========
74
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
20.
LOANS, ADVANCES AND OTHER ASSETS (cont’d)
20.7
The terms and conditions applicable to loans and advances are as follows:
Product
Overdraft
Loan
Tenure
Interest rate
Payable on demand
Penalty interest rate of ten percent-
age points above loan rate up to a
maximum penalty rate of 72% per
annum.
Loan payable over a maximum period
of 120 months (includes mortgage
loans).
From 35% per annum up to a max-
imum of 62% per annum. Loans to
employees and executive Directors
are at a discounted interest rate.
Bankers Acceptances
Loan payable over a minimum period
of 30 days up to 90 days.
Average of 55% per annum.
21.
TRADE AND OTHER INVESTMENTS
Inflation Adjusted Historical
Balance at 1 January
Gain recognised in profit or loss
31 December
2020
ZWL
7 231 788
3 645 884
----------------
10 877 672
==========
31 December
2019
ZWL
Restated
3 134 713
4 097 075
----------------
7 231 788
==========
31 December
2020
ZWL
31 December
2019
ZWL
1 612 131
9 265 541
----------------
10 877 672
==========
112 501
1 499 630
----------------
1 612 131
==========
22.
INVESTMENTS IN GROUP COMPANIES
22.1
Subsidiaries
Inflation Adjusted Historical
31 December
2020
ZWL
31 December
2019
ZWL
Restated
31 December
2020
ZWL
31 December
2019
ZWL
1 288 349 628
--------------------
1 288 349 628
===========
1 288 349 628
--------------------
1 288 349 628
===========
31 491 009
--------------------
31 491 009
===========
31 491 009
--------------------
31 491 009
===========
Investment in subsidiaries:
NMB Bank Limited
22.2
Shareholding
The subsidiary is registered in Zimbabwe, and the extent of the Group's beneficial interest therein and its principal business
activities are listed below:-
NMB Bank Limited
2020
100% (Banking)
2019
100% (Banking)
The consolidated financial statements include the financial information of the subsidiary listed above.
75
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
23.
GROUP
INVESTMENT PROPERTIES
Inflation Adjusted Historical
At 1 January
Additions
Disposals
Fair value gains
Reclassification from non-current
assets held for sale
Translation gains on change in
functional currency
At 31 December 2020
31 December
2020
ZWL
1 031 154 580
411 275 642
(17 580 325)
228 646 579
31 December
2019
ZWL
Restated
31 December
2020
ZWL
31 December
2019
ZWL
583 765 312
8 698 276
(23 795 535)
419 983 776
229 867 982
245 405 846
(4 514 509)
1 182 737 157
20 950 606
351 515
(5 304 570)
194 387 322
-
807 453
-
180 000
-
-------------------
1 653 496 476
===========
41 695 297
-------------------
1 031 154 579
===========
-
-------------------
1 653 496 476
===========
19 303 109
-------------------
229 867 982
===========
Investment properties comprise commercial properties and residential properties that are leased out to third parties and land
held for future development. No properties were encumbered.
Rental income amounting to ZWL7 610 897 (2019 – ZWL1 280 872) was received and no operating expenses were incurred on
the leased investment properties in the current year due to the net leasing arrangement on the properties.
The Bank has no restrictions on the realisability of its investment properties and no contractual obligations to purchase, construct
or develop the investment properties or for repairs, maintenance and enhancements.
Measurement of fair value
Fair value hierarchy
The fair value of the Bank's investment properties as at 31 December 2020 has been arrived at on the basis of valuations carried
out by independent professional valuers, PMA Real Estate (Private) Limited. The valuation which conforms to International
Valuation Standards, was in terms of the policy as set out in the accounting policies section and was derived with reference to
market information close to the date of the valuation.
Level 3
The fair value for investment properties of ZWL1 653 496 476 (2019 – restated ZWL1 031 154 580) has been categorised under
level 3 in the fair value hierarchy based on the inputs used for the valuation technique described below.
76
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
23.
INVESTMENT PROPERTIES (cont’d)
Valuation technique and significant unobservable inputs
The following table shows the valuation technique used in measuring the fair value of investment properties, as well as the
significant unobservable inputs used.
Valuation Technique
Significant Unobservable Inputs
Inter-relationship between key unobservable
inputs and fair value measurement
The investment method
Discounted cash flows
was used to value all
income producing prop-
erties.
The direct comparison
method was applied on all
residential properties.
• Weighted average expected
market rental growth (5%);
Void period (average 3 months
after the end of each lease);
Occupancy rate (55%); and
Average market yield of 10%.
•
•
•
The estimated fair value would increase /(decrease)
if:
•
expected market rental growth were higher/
(lower);
void periods were shorter/(longer);
the occupancy rates were higher /(lower); and
the risk adjusted discount rates were lower/
(higher).
•
•
•
Below is an indication of the changes in fair values following change to the key unobservable limits:
Changes in fair value following changes in:
Expected market rental growth
ZWL
Occupancy rates
ZWL
Risk adjusted discount rates
ZWL
82 674 824
49 604 894
16 534 965
- 16 534 965
- 49 604 894
- 82 674 824
177 364 674
106 418 804
35 472 935
(35 472 935)
(106 418 804)
(177 364 674)
+5%
+3%
+1%
-1%
-3%
-5%
Void periods
1 month
2 months
4 months
217 959 661
130 775 796
43 591 932
(43 591 932)
(130 775 796)
(217 959 661)
Change in fair value
ZWL
444 365 259
253 650 555
(127 778 851)
77
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
24.
INTANGIBLE ASSETS
Inflation Adjusted
Cost
Balance at 1 January 2019 - Restated
Acquisitions
Capitalisation
Balance at 31 December 2019 - Restated
Acquisitions
Balance at 31 December 2020
Accumulated amortisation
Balance at 1 January 2019 - Restated
Amortisation for the year
Balance at 31 December 2019 - Restated
Amortisation for the year
Balance at 31 December 2020
Carrying amount
At 31 December 2020
Restated at 31 December 2019 - Restated
At 1 January 2019 - Restated
Cost
Balance at 1 January 2019
Acquisitions
Capitalisation
Balance at 1 January 2019
Acquisitions
Balance at 31 December 2020
Accumulated amortisation
Balance at 1 January 2019
Amortisation for the year
Balance at 1 January 2019
Amortisation for the year
Balance at 31 December 2020
Carrying amount
At 31 December 2020
At 1 January 2020
At 1 January 2019
78
Computer
Software
ZWL
211 223 328
2 857 048
-
-----------------
214 080 376
7 828 681
-----------------
221 909 057
==========
Total
ZWL
211 223 328
2 857 048
-
---------------
214 080 376
7 828 681
-----------------
221 909 057
==========
133 469 410
28 513 215
----------------
161 982 625
133 469 410
28 513 215
--------------
161 982 625
24 416 805
24 416 805
-----------------
186 399 430
==========
-----------------
186 399 430
==========
35 509 627
==========
52 097 749
==========
35 509 627
==========
52 097 749
==========
77 753 918
==========
77 753 918
==========
Historical Cost
5 375 405
94 320
-
-----------------
5 469 725
3 652 103
-----------------
9 121 828
==========
3 338 632
733 909
-----------------
4 072 541
915 580
-----------------
4 988 121
==========
5 375 405
94 320
-
-----------------
5 469 725
3 652 103
-----------------
9 121 828
==========
3 338 632
733 909
-----------------
4 072 541
915 580
-----------------
4 988 121
=========
4 133 707
4 133 707
==========
1 397 186
==========
2 036 773
==========
1 397 186
==========
2 036 773
============= ============
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
25.
PROPERTY AND EQUIPMENT
Inflation Adjusted
Capital
work in
progress
Computers
Motor
Vehicles
Furniture &
Equipment
Right of Use
Assets**
Freehold Land
& Buildings*
Total
Cost/Revaluation amount
ZWL
Restated
ZWL
Restated
ZWL
Restated
ZWL
Restated
ZWL
Restated
ZWL
Restated
ZWL
Restated
At 1 January 2019 – restated 299 956 370
82 249 874
Additions
(64 658 100)
Capitalisations
Revaluation gain
-
Translation gains on change in
functional currency
Initial recognition – Right of
use assets
Remeasurement – Right of
use assets
-
-
-
-----------------
284 611 050
51 491 608
5 502 543
-
51 149 660
5 205 185
1 317 424
-
181 066 977
19 511 309
4 566 022
-
-
-
-
-
-
-
-
-
-
-
-
112 346 127
-
53 272 111
656 033 161
929 130 184
158 457 976
-
656 033 161
387 245 018
387 245 018
67 778 565
-
67 778 565
-
------------------
-
-----------------
-
------------------
3 398 610
------------------
-
-------------------
3 398 610
---------------
At 31 December
2019 - restated
Additions
Remeasurement – Right of
use assets
Capitalisations
Revaluations
Disposals
At 31 December 2020
Accumulated depreciation
At 1 January 2019 - restated
Charge for the year –
Property and equipment
Charge for year - Right
of use Assets
317 548 144
182 930 656
341 605 201
69 629 485
57 672 269
-
205 144 308
2 600 213
71 177 175
-
1 208 896 417 2 202 043 514
255 160 354
-
-
(69 856 376)
-
-
-----------------
430 622 424
===========
-
23 034 417
-
(904 038)
------------------
433 365 065
=========
-
2 738 632
-
(15 076 762)
-----------------
45 334 139
=========
-
36 227 221
-
(13 731 577)
------------------
230 240 165
=========
36 968 582
-
-
-
------------------
108 145 757
=========
36 968 582
-
-
7 856 106
240 471 407
240 471 407
(29 712 377)
-
-------------------
-------------------
1 457 223 930 2 704 931 480
=========== ===========
-
-
148 685 254
40 815 524
150 293 775
47 588 166
7 737 014
11 168 351
-
-
10 912 729
350 707 282
2 710 722
69 204 253
-
-----------------
-
-----------------
-
----------------
-
----------------
13 854 547
-----------------
-
----------------
13 854 547
---------------
At 31 December 2019 - restated
Charge for the year – Property
and equipment
Charge for period – Right of
use assets
Disposals
-
-
196 273 420
48 552 538
161 462 126
13 854 547
13 623 451
433 766 082
48 910 965
3 900 074
14 744 475
-
1 606 329
69 161 843
-
-
--------------
-
========
-
(904 038)
-----------------
244 280 347
==========
-
(15 076 760)
---------------
37 375 852
=========
-
(11 303 628)
----------------
164 902 973
=========
11 116 446
-
------------------
24 970 993
=========
-
-
----------------
15 229 780
=========
11 116 446
(27 284 426)
-----------------
486 759 945
==========
At 31 December 2020
Carrying amount
At 31 December 2020
At 1 December
2019 – Restated
At 1 January
2018 - Restated
430 622 424
==========
189 084 718
=========
7 958 287
========
65 337 191
========
83 174 764
=========
1 441 994 151
===========
2 218 171 535
==========
317 548 144
==========
145 331 782
=========
9 119 731
========
43 682 182
=========
57 322 628
=========
1 195 272 966
===========
1 768 277 432
==========
299 956 370
==========
135 925 796
=========
10 334 136
========
30 773 202
=========
-
=========
101 433 398
==========
578 422 902
==========
*Assets measured using the revaluation model
** Right-of-Use Assets recognised in respect of leased properties in which the Group is a lessee. The Right-of-Use Assets are depreciated over the shorter of the lease
term including extension options where the Group is certain to exercise such and the useful life of the underlying asset.
79
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
25.
PROPERTY AND EQUIPMENT (cont’d)
Historical Cost
Cost/Revaluation amount
Capital
work in
progress
ZWL
At 1 January 2019
Additions
Initial recognition - Right of use assets
Capitalisations
Remeasurement - Right of Use Assets
Revaluation gain
Translation gain on change
9 463 995
19 774 151
-
(14 413 772)
-
-
Computers
ZWL
7 413 351
2 975 151
-
1 226 643
-
-
Motor
Vehicles
ZWL
Furniture &
Equipment
ZWL
Right of Use
Assets**
ZWL
Freehold Land
& Buildings*
ZWL
Total
ZWL
1 269 770
206 348
-
293 684
-
-
4 478 223
1 352 847
-
1 017 871
-
-
-
-
3 338 967
-
757 613
-
3 852 998
-
-
11 875 574
-
236 960 551
26 478 336
24 308 497
3 338 967
-
757 613
236 960 551
in functional currency
-
-
-
-
-
15 653 157
15 653 157
Reclassification from
Investment properties
At 31 December 2019
Additions
Remeasurement – Right
of use assets
Capitalisations
Disposals
Revaluation gain
At 31 December 2020
Accumulated depreciation
At 1 January 2019
Charge for the year – Property
and equipment
Charge for the year – Right of
use assets
At 31 December 2019
Charge for the year
Charge for period – Right
of Use Asset
Disposals
At 31 December 2020
Carrying amount
At 31 December 2020
At 1 December 2019
At 1 January 2019
-
------------------
14 824 374
52 381 396
-
(58 590 341)
-
-
------------------
8 615 429
==========
-
-
-
------------------
11 615 145
56 223 172
-
-----------------
1 769 802
-
-
------------------
6 848 941
2 147 918
-
------------------
4 096 580
-
40 600
----------------
268 382 880
-
40 600
---------------
307 537 721
110 752 486
-
15 356 278
(46 837)
-
------------------
83 147 758
=========
-
1 994 819
(372 492)
-
-----------------
3 392 129
========
-
36 227 220
(396 841)
-
------------------
44 827 238
========
29 233 252
-
-
-
------------------
33 329 832
========
-
5 012 023
-
1 183 829 028
-------------------
1 457 223 931
===========
29 233 252
-
(816 170)
1 183 829 028
------------------
1 630 536 318
==========
3 607 903
1 008 262
3 262 458
1 427 692
222 449
481 383
-
-
391 644
8 634 267
175 836
2 307 360
-
-------------------
-
-
-
-----------------
5 035 595
5 048 413
-
-----------------
1 230 711
341 867
-
------------------
4 107 841
2 257 704
1 310 867
-------------------
1 310 867
-
-
-
------------------
-
==========
-
(40 080)
------------------
10 043 928
========
-
(372 492)
------------------
1 200 086
========
-
(372 989)
------------------
5 992 556
========
8 615 429
==========
14 824 373
==========
9 463 994
==========
73 103 831
=========
6 579 550
========
3 805 448
========
2 192 043
========
539 092
=======
261 508
========
38 834 681
========
2 741 099
========
851 764
========
8 579 715
-
---------------
9 890 582
========
23 439 250
=========
2 785 713
=========
-
========
-
-----------------
567 480
14 662 300
-
-
------------------
15 229 780
=======
1 310 867
---------------
12 252 494
22 310 284
8 579 715
(785 561)
----------------
42 356 932
=========
267 815 400
1 441 994 151
1 588 179 384
=========== ===========
295 285 227
=========== ===========
17 844 069
=========== ===========
3 461 354
*Assets measured using the revaluation model
** Right-of-Use Assets recognised in respect of leased properties in which the Group is a lessee. The Right-of-Use Assets are depreciated over the shorter of the
lease term including extension options where the Group is certain to exercise such and the useful life of the underlying asset.
80
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
25.
PROPERTY AND EQUIPMENT (cont’d)
Measurement of fair value
Fair value hierarchy
Immovable properties were revalued as at 31 December 2020 on the basis of valuations carried out by independent professional valuers, PMA Real
Estate (Private) Limited. The valuation which conforms to International Valuation Standards, was in terms of the policy as set out in the accounting policies
section. All movable assets are measured at their carrying amounts which are arrived at by the application of a depreciation charge on their cost values
over the useful lives of the assets.
The valuation of land and buildings was arrived by applying yield rates of 10% on rental levels of between ZWL332 – ZWL574 per square metre.
Level 3
The fair value of immovable properties of ZWL1 441 994 151 (2019 – ZWL1 193 666 636) has been categorised under level 3 in the fair value hierarchy
based on the inputs used for the valuation technique described below.
The following shows reconciliation between the opening and closing balances for level 3 fair values:
The following shows reconciliation between the opening and closing balances for level 3 fair values:
Inflation Adjusted Historical Cost
31 December
2020
ZWL
31 December
2019
ZWL
Restated
31 December
2020
ZWL
31 December
2019
ZWL
1 195 272 966
112 346 127
267 815 400
3 461 354
-
7 856 106
240 471 407
-
(1 606 328)
-------------------
1 441 994 151
===========
387 245 018
53 272 111
656 033 161
-
(13 623 451)
-------------------
1 195 272 966
===========
-
5 012 023
1 183 829 028
-
(14 662 300)
------------------
1 441 994 151
===========
15 649 358
11 875 574
236 960 551
40 600
(172 037)
-----------------
267 815 400
==========
At 1 January
Translation gains on change
in functional currency
Transfers from work in progress
Revaluation gain
Impairment reversal
Depreciation
Balance at 31 December
Valuation technique and significant unobservable inputs
The following table shows the valuation technique used in measuring the fair value of investment properties, as well as the
significant unobservable inputs used.
Valuation Technique
Significant Unobservable Inputs
The Direct Comparison
Method was applied on all
residential properties
• Weighted average expected
market rental growth (5%); and
• Average market yield of 10%.
Inter-relationship between key unobservable
inputs and fair value measurement
The estimated fair value would increase /(de-
crease) if:
• Expected market rental growth were higher/
(lower); and
• The risk adjusted discount rates were
lower/ (higher).
81
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
25.
PROPERTY AND EQUIPMENT (cont’d)
Below is an indication of the sensitivity analysis following changes on the significant unobservable inputs:-
Change in fair value
Change in rate
Expected market rental growth
ZWL
Discount rates
ZWL
+5%
+3%
+1%
-1%
-3%
-5%
16 964 637
10 178 782
3 392 927
(3 392 927)
(10 178 728)
(16 964 637)
59 683 332
35 809 999
11 936 666
(11 936 666)
(35 809 999)
(59 683 332)
82
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
26.
26.1
INTEREST RATE REPRICING AND GAP ANALYSIS
Total position
The table below analyses the Group’s interest rate risk exposure on assets and liabilities. The assets and liabilities are categorised by the earlier of
contractual repricing or maturity dates.
Inflation Adjusted
As at 31 December 2020
Assets
Cash and cash equivalents
Current tax assets
Investment securities
Quoted and other investments
Loans, advances and other assets
Deferred tax
Intangible assets
Property and equipment
Investment properties
Liabilities and equity
Deposits and other liabilities
Current tax liabilities
Deferred tax liabilities
Redeemable ordinary shares
Equity
Subordinated loan
Interest rate repricing gap
Cumulative gap
Up to
1 month
ZWL
1 month to
3 months
ZWL
3 months to
1 year
ZWL
1 year to Non-interest
bearing
ZWL
5 years
ZWL
Total
ZWL
1 964 637 240
-
400 000 000
-
880 663 433
-
-
-
-
--------------------
3 245 300 673
--------------------
-
-
450 000 000
-
289 817 298
-
-
-
-
-----------------
739 817 298
--------------------
-
-
220 438 224
-
408 544 561
-
-
-
-
-----------------
628 982 785
--------------------
-
-
11 382 233
-
719 771 881
-
-
-
-
----------------
731 154 114
--------------------
-
-
-
10 877 672
693 851 430
-
35 509 627
2 218 171 535
1 653 496 476
-----------------
1 964 637 240
-
1 081 820 457
10 877 672
3 992 648 603
-
35 509 627
2 218 171 535
1 653 496 476
-----------------
5 611 906 740 10 957 161 610
--------------------
--------------------
151 192 601
6 413 943 465
3 325 295
11 426 731
749 093 396
5 498 905 442
57 205 065
57 205 065
-
-
-
-
291 040 065
291 040 065
-
-
-
-
14 335 253
14 335 253
-
-
-
-
4 048 005 121
4 048 005 121
-
-
-
-
-
132 632 641
-
-
-
132 632 641
-------------------
--------------------
-----------------
-----------------
-----------------
--------------------
4 561 778 105 10 957 161 610
3 325 295
11 426 731
749 093 396
5 631 538 083
--------------------
--------------------
--------------------
--------------------
--------------------
--------------------
1 050 128 635
-
727 828 822
617 556 054
(9 276 098)
(2 386 237 410)
--------------------
--------------------
--------------------
--------------------
--------------------
--------------------
2 386 237 410) (2 395 513 508)
-
-
(1 777 957 453) (1 050 128 635)
============ ============ ============ ============ ============ ============
The table below analyses the Group’s interest rate risk exposure on assets and liabilities. The assets and liabilities are
categorised by the earlier of contractual repricing or maturity dates.
Inflation Adjusted
As at 31 December 2019
Assets
Cash and cash equivalents
Current tax assets
Investment securities
Quoted and other investments
Loans, advances and other assets
Deferred tax
Intangible assets
Property and equipment
Investment properties
Liabilities and equity
Deposits and other liabilities
Deferred tax liabilities
Current tax liabilities
Redeemable ordinary shares
Equity
Subordinated loan
Interest rate repricing gap
Cumulative gap
Up to 1 month to 3 months to 1 year to Non-interest
bearing
1 year
ZWL
ZWL
Restated
Restated
3 months
ZWL
Restated
5 years
ZWL
Restated
1 month
ZWL
Restated
Total
ZWL
Restated
-
2 208 405 864
-
-
28 664 954
11 214 639
-
-
287 785 692
542 681 138
-
-
-
-
-
-
-
-
-------------------- --------------------
316 450 646
2 762 301 641
-------------------- --------------------
-
-
111 658 175
-
-
-
329 194 131
-
570 333 605
-
-
-
-
- 2 208 405 864
-
-
480 731 899
-
7 231 788
7 231 788
912 331 939 1 511 317 270 3 824 449 644
-
-
-
52 097 749
- 1 768 277 432 1 768 277 432
- 1 031 154 579 1 031 154 579
-------------------- -------------------- -------------------- --------------------
899 527 736 1 023 990 114 4 370 078 818 9 372 348 955
-------------------- -------------------- -------------------- --------------------
-
52 097 749
348 211 446
-
-
-
-
-
226 671 312
4 686 461 205
-
-
-
-
-
-
-
-
-
-
-------------------- --------------------
4 686 461 205
226 671 312
-------------------- --------------------
89 779 334
(1 924 159 564)
-------------------- --------------------
(1 924 159 564) (1 834 380 232) (1 283 063 942)
309 121 657 5 652 133 875
81 668 255
505 497 805
505 497 805
-
2 803 378
2 803 378
-
64 305 875
64 305 875
-
- 3 020 387 631 3 020 387 631
127 220 391
-
-------------------- -------------------- -------------------- --------------------
208 888 646 3 902 116 345 9 372 348 955
-------------------- -------------------- -------------------- --------------------
-
-------------------- -------------------- -------------------- --------------------
-
============ ============ ============ ============ ============ ============
(467 962 473)
127 220 391
815 101 468
551 316 290
467 962 473
348 21 446
-
83
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
26.
26.1
INTEREST RATE REPRICING AND GAP ANALYSIS
Total position (Cont'd)
The table below analyses the Group’s interest rate risk exposure on assets and liabilities. The assets and liabilities are
categorised by the earlier of contractual repricing or maturity dates.
Historical
As at 31 December 2020
Assets
Cash and cash equivalents
Investment securities
Quoted and other investments
Loans, advances and other assets
Deferred tax
Intangible assets
Property and equipment
Investment properties
Liabilities and equity
Deposits and other liabilities
Deferred tax liabilities
Current tax liabilities
Redeemable ordinary shares
Equity
Subordinated loan
Interest rate repricing gap
Cumulative gap
Up to 1 month to 3 months to 1 year to Non-interest
bearing
1 year
ZWL
ZWL
3 months
ZWL
5 years
ZWL
1 month
ZWL
Total
ZWL
-
1 964 637 240
450 000 000
400 000 000
-
-
289 817 298
880 663 428
-
-
-
-
-
-
-
-
-----------------
--------------------
3 245 300 668
739 817 298
-------------------- --------------------
-
11 382 233
-
-
220 438 224
-
408 544 561
-
-
-
-
- 1 964 637 240
- 1 081 820 457
10 877 672
10 877 672
719 771 881 1 432 089 567 3 730 886 733
-
-
4 133 707
-
- 1 588 179 384 1 588 179 384
- 1 653 496 476 1 653 496 476
-------------------- -------------------- -------------------- --------------------
731 154 114 4 688 776 806 10 034 031 669
-------------------- -------------------- -------------------- --------------------
-
4 133 707
628 982 785
11 426 731
-
-
-
-
-
5 498 905 442
-
-
-
-
132 632 641
749 093 396
-
-
-
-
-
-------------------- --------------------
5 631 538 083
749 093 396
-------------------- --------------------
(2 386 237 415)
(9 276 098)
-------------------- --------------------
(2 386 237 415) (2 395 513 513) (1 777 957 458) (1 050 128 635)
151 192 601 6 413 943 465
3 325 295
174 727 794
174 727 794
-
57 205 065
57 205 065
-
-
14 335 253
14 335 253
- 3 241 187 451 3 241 187 451
132 632 641
-
-
-------------------- -------------------- -------------------- --------------------
3 325 295 3 638 648 164 10 034 031 669
-------------------- -------------------- -------------------- --------------------
-
-------------------- -------------------- -------------------- --------------------
-
============ ============ ============ ============ ============ ============
727 828 818 1 050 128 635
617 556 054
11 426 731
-
The table below analyses the Group’s interest rate risk exposure on assets and liabilities. The assets and liabilities are
categorised by the earlier of contractual repricing or maturity dates.
Historical
As at 31 December 2019
Assets
Cash and cash equivalents
Investment securities
Quoted and other investments
Loans, advances and other assets
Deferred tax
Intangible assets
Property and equipment
Investment properties
Liabilities and equity
Deposits and other liabilities
Deferred tax liabilities
Current tax liabilities
Redeemable ordinary shares
Equity
Subordinated loan
Interest rate repricing gap
Cumulative gap
84
Up to 1 month to 3 months to 1 year to Non-interest
bearing
1 year
ZWL
ZWL
3 months
ZWL
5 years
ZWL
1 month
ZWL
Total
ZWL
492 304 267
2 500 000
-
120 976 061
-
-
-
-
-
6 390 075
-
64 154 025
-
-
-
-
------------------ --------------------
70 544 100
615 780 328
------------------
------------------
50 530 229
1 044 719 581
-
-
-
-
-
-
-
-
-
-
-------------------- --------------------
1 044 719 581
50 530 229
-------------------- --------------------
20 013 870
(428 939 253)
-------------------- --------------------
(428 939 253)
(408 925 383)
=========== ===========
-
73 384 915
-
127 140 428
-
-
-
-
492 304 267
-
107 166 155
24 891 165
1 612 131
-
817 960 242
203 379 693
-
-
1 397 186
-
295 285 227
-
229 867 982
-
-------------------- -------------------- -------------------- --------------------
830 472 561 1 945 593 190
------------------
------------------
-
-
1 612 131
302 310 035
-
1 397 186
295 285 227
229 867 982
200 525 343
------------------
228 270 858
------------------
77 624 310
-
-
-
-
-
18 205 725
-
-
-
-
28 360 340
77 066 171 1 268 146 016
97 653 191
97 653 191
624 937
624 937
14 335 253
14 335 253
536 473 453
536 473 453
28 360 340
-
-------------------- -------------------- -------------------- --------------------
726 153 005 1 945 593 190
-------------------- -------------------- -------------------- --------------------
-
-------------------- -------------------- -------------------- --------------------
(286 024 350)
-
=========== =========== =========== ===========
(104 319 558)
181 704 792
122 901 033
104 319 558
46 566 065
77 624 310
-
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
26.
26.1.
INTEREST RATE REPRICING AND GAP ANALYSIS (cont’d)
Zimbabwe dollars
The table below analyses the Group’s interest rate risk exposure on assets and liabilities denominated in Zimbabwe Dollars only.
The assets and liabilities are categorised by the earlier of contractual repricing or maturity dates.
Inflation Adjusted
As at 31 December 2020
Assets
Cash and cash equivalents
Investment securities
Loans, advances and other assets
Intangible assets
Property and equipment
Investment properties
Liabilities and equity
Deposits and other liabilities
Current tax liabilities
Deferred tax liabilities
Redeemable ordinary shares
Equity
Subordinated loan
Interest rate repricing gap
Cumulative gap
Up to 1 month to 3 months to 1 year to Non-interest
bearing
1 year
ZWL
ZWL
3 months
ZWL
5 years
ZWL
1 month
ZWL
Total
ZWL
-
1 812 557 587
450 000 000
400 000 000
257 412 315
878 064 159
-
-
-
-
-
-
-----------------
--------------------
3 090 621 746
707 412 315
-------------------- --------------------
-
11 382 233
-
220 438 224
408 544 561
-
-
-
-----------------
628 982 785
- 1 812 557 587
- 1 081 820 457
719 771 881 1 693 851 429 3 957 644 347
-
35 509 627
35 509 627
- 2 218 171 535 2 218 171 535
- 1 653 496 476 1 653 496 476
----------------
-----------------
-----------------
731 154 114 5 601 029 067 10 759 200 029
-------------------- -------------------- -------------------- --------------------
5 294 347 158
-
-
-
-
132 632 641
--------------------
5 426 979 799
--------------------
(2 336 358 053)
--------------------
(2 336 358 053) (2 378 039 134) (1 760 483 080) (1 032 654 260)
151 192 602 6 209 385 182
3 325 295
57 205 065
-
291 040 065
-
-
14 335 253
- 4 048 005 121 4 048 005 121
132 632 641
-
-
-------------------
----------------- --------------------
3 325 295 4 561 778 106 10 752 603 327
-------------------
6 596 702
-------------------
-
============ ============ ============ ============ ============ ============
749 093 396
-
-
-
-
-
-----------------
749 093 396
-----------------
(41 681 081)
-----------------
11 426 731
-
-
-
-
-
-----------------
11 426 731
-----------------
617 556 054
-----------------
----------------- --------------------
727 828 822 1 039 250 961
----------------- --------------------
6 596 702
57 205 065
291 040 065
14 335 253
26.1.
Zimbabwe dollars - Restated
The table below analyses the Group’s interest rate risk exposure on assets and liabilities denominated in Zimbabwe Dollars only.
The assets and liabilities are categorised by the earlier of contractual repricing or maturity dates.
Inflation Adjusted
As at 31 December 2019
Assets
Cash and cash equivalents
Current tax assets
Investment securities
Quoted and other investments
Loans, advances and other assets
Deferred tax
Non-current assets held for Sale
Intangible assets
Property and equipment
Investment properties
Liabilities and equity
Deposits and other liabilities
Current tax liabilities
Deferred tax liabilities
Redeemable ordinary shares
Equity
Subordinated loan
Interest rate repricing gap
Cumulative gap
5 years
ZWL
Restated
-
-
111 658 175
-
Up to 1 month to 3 months to 1 year to Non-interest
Total
bearing
1 year
ZWL
ZWL
ZWL
Restated
Restated
Restated
- 1 526 198 499
-
-
-
-
480 731 898
-
329 194 131
-
-
-
912 331 939 1 511 317 270 3 667 425 604
570 333 606
-
-
-
-
-
-
-
52 097 749
-
- 1 768 277 432 1 768 277 432
-
- 1 031 154 579 1 031 154 579
-
-------------------
----------------- --------------------
-----------------
899 527 737 1 023 990 114 4 362 847 030 8 525 885 761
-------------------
----------------- --------------------
-----------------
3 months
ZWL
Restated
-
-
28 664 954
-
142 421 617
-
-
-
-
-
-----------------
171 086 571
-----------------
1 month
ZWL
Restated
1 526 198 499
-
11 214 639
-
531 021 170
-
-
-
-
-
--------------------
2 068 434 308
--------------------
-
-
52 097 749
348 211 446
226 671 312
3 768 842 275
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-----------------
-----------------
--------------------
348 211 446
226 671 312
3 768 842 275
-----------------
-----------------
--------------------
551 316 291
(55 584 741)
(1 700 407 967)
--------------------
-----------------
-----------------
(1 700 407 967) (1 755 992 709) (1 204 676 418)
309 121 656 4 734 514 945
81 668 255
2 803 378
-
505 497 806
-
-
64 305 875
- 3 020 387 631 3 020 387 631
127 220 392
127 220 392
-
----------------- --------------------
-------------------
208 888 647 3 902 116 345 8 454 730 025
-------------------
----------------- --------------------
71 155 736
815 101 467
460 730 685
-------------------
----------------- --------------------
-
71 155 736
============ ============ ============ ============ ============ ============
2 803 378
505 497 806
64 305 875
(389 574 951)
85
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
26.
INTEREST RATE REPRICING AND GAP ANALYSIS
The table below analyses the Group’s interest rate risk exposure on assets and liabilities. The assets and liabilities are
categorised by the earlier of contractual repricing or maturity dates.
Historical
As at 31 December 2020
Assets
Cash and cash equivalents
Investment securities
Loans, advances and other assets
Deferred tax
Intangible assets
Property and equipment
Investment properties
Liabilities and equity
Deposits and other liabilities
Deferred tax liabilities
Current tax liabilities
Redeemable ordinary shares
Equity
Subordinated loan
Interest rate repricing gap
Cumulative gap
Up to 1 month to 3 months to 1 year to Non-interest
bearing
1 year
ZWL
ZWL
3 months
ZWL
5 years
ZWL
1 month
ZWL
Total
ZWL
1 812 557 587
400 000 000
878 064 159
-
-
-
-
-------------------
3 090 621 746
-------------------
-
450 000 000
257 412 315
-
-
-
-
-----------------
707 412 315
-----------------
-
220 438 224
408 544 561
-
-
-
-
-----------------
628 982 785
-----------------
-
11 382 231
- 1 812 557 587
- 1 081 820 455
719 771 881 1 432 089 559 3 695 882 477
-
-
-
4 133 707
- 1 588 179 384 1 588 179 384
- 1 653 496 476 1 653 496 476
-----------------
-----------------
-----------------
731 154 112 4 677 899 126 9 836 070 085
-----------------
-----------------
-----------------
-
4 133 707
5 294 347 158
-
-
-
-
132 632 641
-------------------
5 426 979 798
-------------------
(2 336 358 057)
-------------------
151 792 602 6 209 385 182
3 325 295
174 727 794
174 727 794
-
57 205 066
57 205 066
-
-
14 335 253
14 335 253
- 3 241 187 451 3 241 187 451
132 632 641
-
-
-------------------
-----------------
-----------------
3 325 295 3 638 648 164 9 829 473 385
-----------------
6 596 702
-----------------
-
============ ============ ============ ============ ============ ============
-----------------
-----------------
727 828 818 1 039 250 962
-----------------
-----------------
6 596 702
(2 336 358 057) (2 378 039 138) (1 760 483 084) (1 032 654 260)
749 093 396
-
-
-
-
-
-----------------
749 093 396
-----------------
(41 681 081)
-----------------
11 426 731
-
-
-
-
-
-----------------
11 426 731
-----------------
617 556 054
-----------------
26.1.
Zimbabwe dollars - Restated
The table below analyses the Group’s interest rate risk exposure on assets and liabilities denominated in Zimbabwe Dollars only.
The assets and liabilities are categorised by the earlier of contractual repricing or maturity dates.
Historical
As at 31 December 2019
Assets
Cash and cash equivalents
Investment securities
Loans, advances and other assets
Deferred tax
Intangible assets
Property and equipment
Investment properties
Liabilities and equity
Deposits and other liabilities
Deferred tax liabilities
Current tax liabilities
Redeemable ordinary shares
Equity
Subordinated loan
Interest rate repricing gap
Cumulative gap
86
Up to 1 month to 3 months to 1 year to Non-interest
Total
bearing
1 year
ZWL
ZWL
ZWL
340 224 614
-
-
107 166 155
73 384 915
-
782 955 988
302 310 039
127 140 428
-
-
-
1 397 184
1 397 184
-
295 285 227
295 285 227
-
229 867 982
229 867 982
-
------------------
-----------------
-------------------
828 860 432 1 756 897 150
200 525 343
-------------------
------------------
-----------------
3 months
ZWL
-
6 390 075
31 749 042
-
-
-
-
-----------------
38 139 117
-----------------
5 years
ZWL
-
24 891 165
203 379 693
-
-
-
-
-----------------
228 270 858
-----------------
1 month
ZWL
340 224 614
2 500 000
118 376 786
-
-
-
-
--------------------
461 101 400
--------------------
840 161 297
-
-
-
-
-
--------------------
840 161 297
--------------------
(379 059 897)
--------------------
(379 059 897)
50 530 229
-
-
-
-
-
-----------------
50 530 229
-----------------
(12 391 112)
-----------------
(391 451 009)
============ ===========
77 624 310
-
-
-
-
-
-----------------
77 624 310
-----------------
122 901 033
-------------------
(268 549 976)
===========
18 205 725
-
-
-
-
28 360 340
-----------------
46 566 065
-----------------
181 704 793
-----------------
(86 845 183)
==========
77 066 172 1 063 587 733
97 653 191
97 653 191
624 937
624 937
14 335 253
14 335 253
536 473 453
536 473 453
28 360 340
-
------------------
-------------------
726 153 006 1 741 034 907
-------------------
------------------
15 862 243
(109 611 772)
-------------------
------------------
-
15 862 243
========== ============
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
26.1.
Zimbabwe dollars - Restated
The table below analyses the Group’s interest rate risk exposure on assets and liabilities denominated in currencies other than
Zimbabwe Dollars. The amounts are shown at the equivalent values in Zimbabwe Dollars, the presentation currency. The
assets and liabilities are categorised by the earlier of contractual repricing or maturity dates.
Other foreign currencies
Inflation Adjusted
26.1.
As at 31 December 2020
Assets
Cash and cash equivalents
Current tax assets
Investment securities
Quoted and other investments
Loans, advances and other assets
Deferred tax
Non-current assets held for Sale
Intangible assets
Property and equipment
Investment properties
Liabilities and equity
Deposits and other liabilities
Deferred tax liabilities
Current tax liabilities
Redeemable ordinary shares
Equity
Subordinated loan
Interest rate repricing gap
Cumulative gap
1 month
ZWL
152 079 653
-
-
-
2 599 274
-
-
-
-
-
Up to 1 month to 3 months to 1 year to Non-interest
bearing
1 year
ZWL
ZWL
-
-
-
-
-
-
10 877 672
-
-
-
-
-
-
-
-
-
-
-
-
-
-------------------
-------------------
10 877 672
-
-------------------
-------------------
3 months
ZWL
-
-
-
-
32 404 983
-
-
-
-
-
------------------- -------------------
32 404 983
------------------- -------------------
5 years
ZWL
-
-
-
-
-
-
-
-
-
-
-------------------
-
-------------------
154 678 927
204 558 283
-
-
-
-
-
-
-
-
-
-
-
------------------- -------------------
-
------------------- -------------------
32 404 983
------------------- -------------------
(49 879 357)
(17 474 374)
========== ==========
(49 879 357)
204 558 283
-
-
-
-
-
-
-------------------
-
-------------------
-
-------------------
(17 474 374)
==========
-
-
-
-
-
-
-------------------
-
-------------------
-
-------------------
(17 474 374)
==========
-
-
-
-
-
-
-------------------
-
-------------------
10 877 672
-------------------
(6 596 701)
==========
Total
ZWL
152 079 653
-
-
10 877 672
35 004 257
-
-
-
-
-
-------------------
197 961 582
-------------------
204 558 283
-
-
-
-
-
-------------------
204 558 283
-------------------
(6 596 701)
-------------------
-
==========
The table below analyses the Group’s interest rate risk exposure on assets and liabilities denominated in currencies other than
Zimbabwe Dollars. The amounts are shown at the equivalent values in Zimbabwe Dollars, the presentation currency. The assets
and liabilities are categorised by the earlier of contractual repricing or maturity dates.
Inflation Adjusted
As at 31 December 2019
Assets
Cash and cash equivalents
Current tax assets
Investment securities
Quoted and other investments
Loans, advances and other assets
Deferred tax
Non-current assets held for Sale
Intangible assets
Property and equipment
Investment properties
Liabilities and equity
Deposits and other liabilities
Deferred tax liabilities
Current tax liabilities
Redeemable ordinary shares
Equity
Subordinated loan
Interest rate repricing gap
Cumulative gap
Up to 1 month to 3 months to 1 year to Non-interest
bearing
1 year
ZWL
ZWL
Restated
Restated
-
-
-
-
-
-
7 231 787
-
3 months
ZWL
Restated
-
-
-
-
5 years
ZWL
Restated
-
-
-
-
1 month
ZWL
Restated
682 207 365
-
-
-
Total
ZWL
Restated
682 207 365
-
-
7 231 787
11 659 967
-
-
-
-
145 364 075
-
-
-
-
------------------- -------------------
145 364 075
157 024 042
-
-
-
-
-
-
-
-
-
-------------------
-------------------
846 463 194
-
============ ============ ============ ============ ============ ============
-
-
-
-
-
-------------------
-
-
-
-
-
-
-------------------
7 231787
693 867 332
917 618 930
-
-
-
-
-
-
-
-
-
-
-
------------------- -------------------
-
------------------- -------------------
(223 751 598)
145 364 074
------------------- -------------------
(78 387 523)
(223 751 598)
917 618 930
-
-
-
-
-
-------------------
917 618 930
-------------------
(71 155 736)
-------------------
-
============ ============ ============ ============ ============ ============
-
-
-
-
-
-
-------------------
-
-------------------
-
-------------------
(78 387 523)
-
-
-
-
-
-
-------------------
-
-------------------
-
-------------------
(78 387 523)
-
-
-
-
-
-
-------------------
-
-------------------
7 231 787
-------------------
(71 155 736)
917 618 930
87
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
26.
INTEREST RATE REPRICING AND GAP ANALYSIS
The table below analyses the Group’s interest rate risk exposure on assets and liabilities. The assets and liabilities are
categorised by the earlier of contractual repricing or maturity dates.
Other foreign currencies
Historical
26.1.
As at 31 December 2020
Assets
Cash and cash equivalents
Current tax assets
Investment securities
Quoted and other investments
Loans, advances and other assets
Deferred tax
Non-current assets held for Sale
Intangible assets
Property and equipment
Investment properties
Liabilities and equity
Deposits and other liabilities
Deferred tax liabilities
Current tax liabilities
Redeemable ordinary shares
Equity
Subordinated loan
Interest rate repricing gap
Cumulative gap
1 month
ZWL
152 079 653
-
-
-
2 599 274
-
-
-
-
-
Up to 1 month to 3 months to 1 year to Non-interest
bearing
1 year
ZWL
ZWL
-
-
-
-
-
-
10 877 672
-
-
-
-
-
-
-
-
-
-
-
-
-
-------------------
-------------------
10 877 672
-
-------------------
-------------------
3 months
ZWL
-
-
-
-
32 404 983
-
-
-
-
-
------------------- -------------------
32 404 983
------------------- -------------------
5 years
ZWL
-
-
-
-
-
-
-
-
-
-
-------------------
-
-------------------
154 678 927
Total
ZWL
152 079 653
-
-
10 877 672
35 004 257
-
-
-
-
-
-------------------
197 961 582
-------------------
204 558 283
-
-
-
-
-
-
-
-
-
-
-
------------------- -------------------
-
------------------- -------------------
32 404 983
------------------- -------------------
(17 474 374)
204 558 283
-
-
-
-
-
-------------------
204 558 283
-------------------
(6 596 701)
-------------------
-
============ ============ ============ ============ ============ ============
-
-
-
-
-
-
-------------------
-
-------------------
-
-------------------
(17 474 374)
-
-
-
-
-
-
-------------------
-
-------------------
10 877 672
-------------------
(6 596 701)
-
-
-
-
-
-
-------------------
-
-------------------
-
-------------------
(17 474 374)
(49 879 357)
(49 879 357)
204 558 283
The table below analyses the Group’s interest rate risk exposure on assets and liabilities denominated in currencies other than
Zimbabwe Dollars. The amounts are shown at the equivalent values in Zimbabwe Dollars, the presentation currency. The
assets and liabilities are categorised by the earlier of contractual repricing or maturity dates.
Other foreign currencies
26.1.
Historical
As at 31 December 2019
Assets
Cash and cash equivalents
Current tax assets
Investment securities
Quoted and other investments
Loans, advances and other assets
Deferred tax
Non-current assets held for Sale
Intangible assets
Property and equipment
Investment properties
Liabilities and equity
Deposits and other liabilities
Deferred tax liabilities
Current tax liabilities
Redeemable ordinary shares
Equity
Subordinated loan
Interest rate repricing gap
Cumulative gap
88
1 month
ZWL
152 079 653
-
-
-
2 599 274
-
-
-
-
-
Up to 1 month to 3 months to 1 year to Non-interest
bearing
1 year
ZWL
ZWL
-
-
-
-
-
-
1 612 131
-
-
-
-
-
-
-
-
-
-
-
-
-
-------------------
-------------------
1 612 131
-
-------------------
-------------------
3 months
ZWL
-
-
-
-
32 404 982
-
-
-
-
-
------------------- -------------------
32 404 982
------------------- -------------------
5 years
ZWL
-
-
-
-
-
-
-
-
-
-
-------------------
-
-------------------
154 678 927
Total
ZWL
152 079 653
-
-
1 612 131
35 004 256
-
-
-
-
-
-------------------
188 696 040
-------------------
204 558 283
-
-
-
-
-
-
-
-
-
-
-
------------------- -------------------
-
------------------- -------------------
32 404 982
------------------- -------------------
(17 474 374)
204 558 283
-
-
-
-
-
-------------------
204 558 283
-------------------
(15 862 243)
-------------------
-
============ ============ ============ ============ ============ ============
-
-
-
-
-
-
-------------------
-
-------------------
1 612 131
-------------------
(15 862 243)
-
-
-
-
-
-
-------------------
-
-------------------
-
-------------------
(17 474 374)
-
-
-
-
-
-
-------------------
-
-------------------
-
-------------------
(17 474 374)
(49 879 357)
(49 879 357)
204 558 283
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
27.
FOREIGN EXCHANGE POSITIONS
The table below indicates the currencies to which the Group had significant exposure at 31 December on all its assets and
liabilities. The analysis reflects the mismatch by currency. The amounts are shown at the equivalent values in Zimbabwe
Dollars, the presentation currency.
As at 31 December 2020
Inflation Adjusted
Assets
ZWL
ZWL
USD
ZWL
RAND
ZWL
GBP
ZWL
EUR
ZWL
BWP
ZWL
Total
ZWL
1 812 557 588
-
1 081 820 457
Cash and cash
equivalents
Current tax assets
Investment securities
Quoted and other
-
investments
3 957 644 347
Advances and other
Intangible assets
35 509 627
Property and equipment 2 218 171 535
1 653 496 476
Investment properties
-
Deferred tax
--------------------
10 759 200 030
--------------------
125 272 410
-
-
24 818 968
-
-
719 607
-
-
754 568
-
-
514 099 1 964 637 240
-
-
- 1 081 820 457
-
34 960 633
-
-
-
-
-----------------
160 233 043
-----------------
-
37 259
-
-
-
-
-----------------
24 856 227
-----------------
-
-
-
-
-
-
10 877 672
3 738
-
-
-
-
----------------- --------------------
11 635 978
----------------- --------------------
719 607
-
10 877 672
2 626 3 992 642 603
-
35 509 627
- 2 218 171 535
- 1 653 496 476
-
-
-------------------
-------------------
516 725 10 957 161 610
-------------------
-------------------
Liabilities and equity
Deposits and
other liabilities
Current tax liabilities
Deferred tax liabilities
Subordinated term loan
Redeemable ordinary
shares
Equity
Total
Net foreign exchange
position
6 209 385 182
57 205 065
291 040 065
132 632 641
194 895 675
-
-
-
8 610 494
-
-
-
595 759
-
-
-
388 664
-
-
-
67 691 6 413 943 465
57 205 065
291 040 065
132 632 641
-
-
-
14 335 253
4 048 005 121
--------------------
10 752 603 327
--------------------
-
-
-----------------
194 895 675
-----------------
-
-
-----------------
8 610 494
-----------------
-
-
-
-
----------------- --------------------
388 664
----------------- --------------------
595 759
14 335 253
-
- 4 048 005 121
-------------------
67 691 10 957 161 610
-------------------
-------------------
-------------------
6 596 702
16 245 733
============ ============ ============
(34 662 632)
123 849
-
========== ============ ============ ============
11 247 314
449 034
89
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
27.
FOREIGN EXCHANGE POSITIONS
The table below indicates the currencies to which the Group had significant exposure at 31 December on all its assets and
liabilities. The analysis reflects the mismatch by currency. The amounts are shown at the equivalent values in Zimbabwe
Dollars, the presentation currency.
As at 31 December 2019
Inflation Adjusted
Assets
ZWL
ZWL
Restated
USD
ZWL
Restated
RAND
ZWL
Restated
GBP
ZWL
Restated
3 228 054
-
-
EUR
ZWL
Restated
3 384 882
-
-
BWP
ZWL
Restated
Total
ZWL
Restated
2 306 171 2 208 405 864
-
480 731 899
-
-
561 953 947
-
-
111 334 306
-
-
1 526 198 499
-
480 731 899
Cash and cash
equivalents
Current tax assets
Investment securities
Quoted and other
investments
Loans, advances and
3 667 425 594
other assets
Intangible assets
52 097 749
Property and equipment 1 768 277 432
1 031 154 579
Investment properties
--------------------
8 525 885 751
--------------------
-
Liabilities and equity
Deposits and other
liabilities
Current tax liabilities
Deferred tax liabilities
Subordinated term loan
Redeemable ordinary
shares
Equity
-
-
-
7 231 788
-
7 231 788
156 828 351
-
-
-
-----------------
718 782 298
-----------------
167 138
-
-
-
-----------------
111 501 444
-----------------
-
-
-
-
16 768
-
-
-
----------------- --------------------
10 633 438
----------------- --------------------
3 228 054
11 795 3 824 449 644
-
52 097 749
- 1 768 277 432
- 1 031 134 579
-------------------
2 317 966 9 372 348 955
-------------------
-------------------
-------------------
4 734 514 941
2 803 378
505 497 805
127 220 391
874 273 860
-
-
-
38 625 433
-
-
-
2 672 488
-
-
-
1 743 492
-
-
-
303 663 5 652 133 875
2 803 378
505 497 805
127 220 391
-
-
-
64 305 875
3 020 387 631
--------------------
8 454 730 022
--------------------
-
-
-----------------
874 273 860
-----------------
-
-
-----------------
38 625 433
-----------------
-
-
-
-
----------------- --------------------
1 743 492
----------------- --------------------
2 672 488
-
64 305 875
- 3 020 387 631
-------------------
303 663 9 372 348 955
-------------------
-------------------
-------------------
71 155 729
-
============ ============ ============ ============ ============ ============ ============
(155 491 562)
72 876 011
2 014 304
8 889 945
555 568
Total
Net foreign exchange
position
90
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
27.
FOREIGN EXCHANGE POSITIONS
The table below indicates the currencies to which the Group had significant exposure at 31 December on all its assets and
liabilities. The analysis reflects the mismatch by currency. The amounts are shown at the equivalent values in Zimbabwe
Dollars, the presentation currency.
As at 31 December 2020
Historical
Assets
ZWL
ZWL
USD
ZWL
RAND
ZWL
GBP
ZWL
EUR
ZWL
BWP
ZWL
Total
ZWL
-
3 695 882 477
1 812 557 587
1 081 820 457
Cash and cash
equivalents
Investment securities
Quoted and other
investments
Loans, advances and
other assets
Non-current assets
held for sale
-
4 133 707
Intangible assets
Property and equipment 1 588 179 384
1 653 496 476
Investment properties
-
Deferred tax
--------------------
9 836 070 087
--------------------
125 272 410
-
24 818 968
-
719 607
-
754 568
-
514 099 1 964 637 240
- 1 081 820 457
-
-
34 960 633
37 259
-
-
-
-
-
-----------------
160 233 043
-----------------
-
-
-
-
-
-----------------
24 856 227
-----------------
-
-
10 877 672
-
10 877 672
3 738
2 626 3 730 886 733
-
-
-
-
-
-
-
-
-
-
----------------- --------------------
11 635 978
----------------- --------------------
719 607
-
-
4 133 707
-
- 1 588 179 384
- 1 653 496 476
-
-
-------------------
-------------------
516 725 10 034 031 669
-------------------
-------------------
Liabilities and equity
Deposits and other
liabilities
Current tax liabilities
Deferred tax liabilities
Subordinated term loan
Redeemable ordinary
shares
Equity
Total
Net foreign exchange
position
6 209 385 182
57 205 065
174 727 794
132 632 641
194 895 675
-
-
-
8 610 494
-
-
-
595 759
-
-
-
388 664
-
-
-
67 691 6 413 943 465
57 205 065
174 727 794
132 632 641
-
-
-
14 335 253
3 241 187 451
--------------------
9 829 473 385
--------------------
-
-
-----------------
1194 895 675
-----------------
-
-
-----------------
8 610 494
-----------------
-
-
-
-
----------------- --------------------
388 664
----------------- --------------------
595 759
-
14 335 253
- 3 241 187 451
-------------------
67 691 10 034 031 669
-------------------
-------------------
-------------------
6 596 702
-
============ ============ ============ ============ ============ ============ ============
(34 662 632)
16 245 733
11 247 314
123 849
449 034
91
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
27.
FOREIGN EXCHANGE POSITIONS
The table below indicates the currencies to which the Group had significant exposure at 31 December on all its assets and
liabilities. The analysis reflects the mismatch by currency. The amounts are shown at the equivalent values in Zimbabwe
Dollars, the presentation currency.
As at 31 December 2020
Historical
Assets
Cash and cash
equivalents
Investment securities
Quoted and other
investments
Loans, advances and
other assets
Non-current assets
held for sale
Intangible assets
Property and equipment
Investment properties
Liabilities and equity
Deposits and other
liabilities
Current tax liabilities
Deferred tax liabilities
Subordinated term loan
Redeemable ordinary
shares
Equity
ZWL
ZWL
USD
ZWL
RAND
ZWL
GBP
ZWL
EUR
ZWL
BWP
ZWL
Total
ZWL
340 224 614
107 166 155
125 272 410
-
24 818 968
-
719 607
-
754 568
-
514 100
-
492 304 267
107 166 155
-
-
-
782 955 985
34 960 633
37 259
-
1 397 186
295 285 227
229 867 982
--------------------
1 756 897 149
--------------------
-
-
-
-
-----------------
160 233 043
-----------------
-
-
-
-
-----------------
24 856 227
-----------------
-
-
1 612 131
-
1 612 131
3 738
2 627
817 960 242
-
-
-
-
-
-
-
-
----------------- --------------------
2 370 437
----------------- --------------------
719 607
-
-
-
-
-------------------
-
1 397 186
295 285 227
229 867 982
-------------------
516 727 1 945 593 190
-------------------
-------------------
1 063 587 732
624 937
97 653 191
28 360 340
194 895 675
-
-
-
8 610 494
-
-
-
595 759
-
-
-
388 664
-
-
-
67 691 1 268 146 016
624 937
97 653 191
28 360 340
-
-
-
14 335 253
536 473 454
--------------------
1 741 034 906
--------------------
-
-
-----------------
194 895 675
-----------------
-
-
-----------------
8 610 494
-----------------
-
-
-
-
----------------- --------------------
67 691
----------------- --------------------
388 664
-
-
-------------------
14 335 253
536 473 453
-------------------
303 663 1 945 593 190
-------------------
-------------------
15 862 243
-
============ ============ ============ ============ ============ ============ ============
(34 662 632)
16 245 733
1 981 772
449 033
123 849
Net foreign exchange
position
92
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
28.
CONTINGENT LIABILITIES
Inflation Adjusted Historical
GROUP
Guarantees
Facilities approved but not drawn down
Expected credit losses on facilities
approved but not drawdown
Expected credit losses on guarantees
Balance at 31 December
31 December
2020
ZWL
107 418 549
47 635 086
(1 490 863)
(489 529)
-------------------
153 073 243
==========
31 December
2019
ZWL
Restated
31 December
2020
ZWL
31 December
2019
ZWL
569 489 191
90 021 971
107 418 549
47 635 086
126 952 189
20 067 960
(6 525 618)
(24 346 282)
--------------------
628 639 262
==========
(1 490 863)
(489 529)
-------------------
153 073 243
==========
(1 477 002)
(5 427 344)
-------------------
140 115 803
==========
The Group enters into various irrevocable commitments and contingent liabilities in its normal course of business in order to meet
financial needs of customers. These obligations are not recognised on the statement of financial position, but contain credit risk
and are therefore part of the overall risk of the Group.
Guarantees commit the Group to make payments on behalf of clients in the event of specified acts. Guarantees carry the same
credit risk as loans and advances to customers.
Facilities approved but not drawn down represent contractual commitments to advance loans and revolving credits. These have
fixed expiry dates and may expire without being drawn upon, hence total contract amounts do not necessarily represent future
cash requirements.
29.
CAPITAL COMMITMENTS
Inflation Adjusted Historical
GROUP
Capital expenditure contracted for
Capital expenditure authorised but
not yet contracted for
At 31 December
31 December
2020
ZWL
31 December
2019
ZWL
Restated
31 December
2020
ZWL
31 December
2019
ZWL
-
26 145 307
-
5 828 388
290 414 317
-------------------
290 414 317
==========
527 401 476
--------------------
553 546 783
==========
290 414 317
-------------------
290 414 317
==========
117 569 873
-------------------
123 398 261
==========
Capital commitments will be financed from the Group’s own resources.
30.
ASSETS UNDER CUSTODY
In 2014, the Group received Treasury Bills from the Reserve Bank of Zimbabwe amounting to ZWL343 058 on behalf of its
Tobacco Retention Scheme customers. Half of the Treasury Bills matured in April 2018 and the other half matured in April 2019.
31.
RELATED PARTIES
As required by IAS 24 Related Party Disclosure, the Board’s view is that non-executive Directors, executive Directors and
executive management constitute the key management of the Group. Accordingly, key management remuneration is disclosed
below.
93
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
31.1
COMPENSATION OF KEY MANAGEMENT PERSONNEL OF THE GROUP
GROUP
Inflation Adjusted Historical
Short term employee benefits
Post employment benefits
Termination benefits
31 December
2020
ZWL
27 913 083
657 437
-
-------------------
28 570 520
==========
31 December
2019
ZWL
Restated
35 326 889
1 128 024
12 829 230
--------------------
49 284 143
==========
31 December
2020
ZWL
31 December
2019
ZWL
22 693 564
534 501
-
-------------------
23 228 065
==========
2 863 816
80 480
544 946
-------------------
3 489 242
==========
31.2
BALANCES OF LOANS TO DIRECTORS, OFFICERS AND OTHERS
Loans to Directors and officers or their companies are included in advances and other accounts (note 20).
Inflation Adjusted Historical
GROUP
Non-executive directors
Executive directors
Officers
Directors’ companies
Officers companies
Expected credit loss allowance – Stage 1
31 December
2020
ZWL
-
950 501
68 885 501
-
-
-------------------
69 836 002
(5 067 579)
-------------------
64 768 423
==========
31 December
2019
ZWL
Restated
-
3 347 229
134 337 317
-
-
--------------------
137 684 546
(218 685)
--------------------
137 465 861
==========
31 December
2020
ZWL
31 December
2019
ZWL
-
950 501
68 885 501
-
-------------------
69 836 002
(5 067 579)
-------------------
64 768 423
==========
-
746 174
26 946 866
-
-------------------
27 693 040
(48 750)
-------------------
27 644 290
==========
31.3
BORROWING POWERS
HOLDING COMPANY
In terms of the existing Articles of Association, Article 102, the Directors may from time to time, at their discretion, borrow or
secure the payment of any sum or sums of money for the purposes of the Company without any limitation
32.
EMPLOYEE BENEFITS
32.1
PENSION FUND
All eligible employees of the Group contribute to the NMB Bank Pension Fund, which is a defined contribution plan.
The assets of the Pension Fund are held separately from those of the Group in funds under the control of Trustees. The pension
fund assets included 71 540 shares in NMBZ Holdings Limited as at 31 December 2020.
94
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
32.2
EXPENSE RECOGNISED IN PROFIT OR LOSS
Inflation Adjusted Historical
GROUP
Defined Contribution Plan – NSSA
Defined Contribution Plan – NMB Bank
Limited Pension Fund
31 December
2020
ZWL
31 December
2019
ZWL
Restated
31 December
2020
ZWL
31 December
2019
ZWL
700 783
3 791 281
569 742
259 727
5 741 103
---------------
6 441 886
=========
9 965 400
---------------
13 756 681
=========
4 667 563
---------------
5 237 305
=========
678 733
---------------
938 460
=========
The expense is recognised in profit or loss as part of staff costs under operating expenses (note 7).
32.3
Employee Share Option Scheme
In terms of the Employee Share Option Scheme, up to a maximum of 10% of the issued share capital may be granted by the
Directors to senior employees by way of options. Each set of options is exercisable at any time within a period of five years
from the date the options are granted and the issue price is based on the higher of nominal value of the shares and the middle
market price derived from the Zimbabwe Stock Exchange prices for the trading day immediately preceding the date of offer.
The options vest immediately from date of issue and the fair value of the options is estimated at the grant date using the
Black – Scholes option pricing model, taking into account the terms and conditions upon which the instruments were granted.
Currently no share options are exercisable.
32.4
National Social Security Authority Scheme
All employees of the Group are members of the National Social Security Authority Scheme, a defined contribution plan to
which both the employer and the employees contribute.
Inflation adjusted contributions by the employer are recognised in profit or loss account and during the period amounted to
ZWL700 783 (2019 – restated ZWL3 791 281).
33.
EXCHANGE RATES
The following exchange rates have been used to translate the foreign currency balances to United
States dollars at year end:
United States Dollar
British Sterling
South African Rand
European Euro
Botswana Pula
31 December 2020
Mid - rate
ZWL
81.3486
111.5978
5.919
100.3522
7.5734
USD
GBP
ZAR
EUR
BWP
31 December 2019
Mid - rate
ZWL
16.7734
22.1677
0.8350
18.8164
0.6302
95
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
34.
RISK MANAGEMENT
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework.
The Board has established the Board Asset and Liability Management Committee (ALCO) and the Board Risk and Compliance
Committee, which are responsible for defining the Group’s risk universe, developing policies and monitoring implementation.
The Board also has the Board Credit Committee (BCC) which is responsible for sanctioning credits and the Board Loans Review
Committee (LRC), which is responsible for monitoring asset quality and adherence to the credit risk management policy.
Risk management is linked logically from the level of individual transactions to the Group level. Risk management activities
broadly take place simultaneously at the following different hierarchy levels:
a)
b)
c)
Strategic Level: This involves risk management functions performed by senior management and the board of
directors.It includes the definition of risk, ascertaining the Group’s risk appetite, formulating strategy and policy for
managing risk and establishes adequate systems and controls to ensure overall risk remains within acceptable
levels and is adequately compensated.
Macro Level: It encompasses risk management within a business area or across business lines. These risk
management functions are performed by middle management.
Micro Level: This involves “On-the-line” risk management where risks are actually created. These are the risk
management activities performed by individuals who assume risk on behalf of the organisation such as Treasury
Front Office, Corporate Banking, Retail banking etc. The risk management in these areas is confined to operational
procedures set by management.
Risk management is premised on four (4) mutually reinforcing pillars, namely:
a)
b)
c)
d)
34.1
Credit Risk
adequate board and senior management oversight;
adequate strategy, policies, procedures and limits;
adequate risk identification, measurement, monitoring and information systems; and
comprehensive internal controls and independent reviews.
Credit risk is the risk that a financial contract will not be honoured according to the original set of terms. The risk arises when
borrowers or counterparties to a financial instrument fail to meet their contractual obligations. The Group’s general credit
strategies centre on sound credit granting process, diligent credit monitoring and strong loan collection and recovery. There
is a separation between loan collection and recovery. There is a separation between loan granting and credit monitoring to
ensure independency and effective management of the loan portfolio. The Board has put in place sanctioning committees
with specific credit approval limits. The Credit Management department does the initial review of all applications before
recommending them to the Executive Credit Committee and finally the Board Credit Committee depending on the loan
amount. The Group has in place a Board Loans Review Committee responsible for reviewing the quality of the loan book and
adequacy of loan loss provisions.
The Group has an automated credit processes from loan origination, appraisal, monitoring and collections. The system
has a robust loan monitoring and reporting module which is critical in managing credit risk. In view of the group’s move into
the mass market, retail credit has become a key area of focus. The group has put in place robust personal loan monitoring
systems and structures to mitigate retail loan delinquencies. This includes a rigorous scheme assessment and a dedicated
pre-delinquency team and a separate recoveries team.
Credit Management
•
•
•
•
•
•
•
•
•
•
Responsible for evaluating & approving credit proposals from the business units.
Together with business units, has primary responsibility on the quality of the loan book.
Reviewing credit policy for approval by the Board Credit Committee.
Reviewing business unit level credit portfolios to ascertain changes in the credit quality of individual customers
or other counterparties as well as the overall portfolio and detect unusual developments.
Approve initial customer internal credit grades or recommend to the Credit Committees for approval.
Setting the credit risk appetite parameters.
Ensure the Group adheres to limits, mandates and its credit policy.
Ensure adherence to facility covenants and conditions of sanction e.g. annual audits, gearing levels,
management accounts.
Manage trends in asset and portfolio composition, quality and growth and non-performing loans.
Manage concentration risk both in terms of single borrowers or group as well as sector concentrations and the
review of such limits.
96
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
34.1
Credit Risk (Continued)
Credit Monitoring and Financial Modelling
• Independent credit risk management.
• Independent on-going monitoring of individual credit and portfolios.
• Triggers remedial actions to protect the interests of the Group, if appropriate (e.g. in relation to deteriorated credits).
• Monitors the on-going development and enhancement of credit risk management across the Group.
• Reviews the Internal Credit Rating System.
• On-going championing of the Basel II methodologies across the Group.
• Ensures consistency in the rating processes and performs independent review of credit grades to ensure they
conform to the rating standards.
• Confirm the appropriateness of the credit risk strategy and policy or recommends necessary revisions in response
to changes/trends identified.
Credit Administration
• Prepares and keeps custody of all facility letters.
• Security registration.
• Safe custody of security documents.
• Ensures all conditions of sanction are fulfilled before allowing drawdown or limit marking.
• Review of credit files for documentation compliance e.g. call reports, management accounts.
Recoveries
The recoveries unit is responsible for all collections and ensures that the Group maximises recoveries from Non-Performing
Loans (NPLs) and loans and advances written off.
The table below shows the maximum exposure to credit for the components of the statement of financial position.
The maximum exposure is shown as gross.
34.1.2 MAXIMUM EXPOSURE TO CREDIT RISK WITHOUT TAKING ACCOUNT OF ANY COLLATERAL
Loans to Directors and officers or their companies are included in advances and other accounts (note 20).
Inflation Adjusted Historical
GROUP
Cash and Cash equivalents
(excluding cash on hand)
Investment securities 17
Loans and advances 20
Total
Guarantees 28
Facilities approved but
not drawn down 28
31 December
2020
ZWL
1 362 526 932
1 081 820 457
2 298 797 168
--------------------
4 743 144 557
--------------------
107 418 549
47 635 086
--------------------
155 053 635
--------------------
4 898 198 192
===========
31 December
2019
ZWL
Restated
1 853 566 892
480 731 899
2 282 160 476
-------------------
4 616 459 267
-------------------
569 489 191
90 021 971
-------------------
659 511 162
-------------------
5 275 970 429
===========
31 December
2020
ZWL
31 December
2019
ZWL
1 362 526 932
1 081 820 457
2 298 797 168
-------------------
4 743 144 557
-------------------
107 418 549
47 635 086
-------------------
155 053 635
-------------------
4 898 198 192
===========
413 202 530
107 166 155
508 745 860
-------------------
1 029 114 545
-------------------
126 952 189
20 067 960
-------------------
147 020 149
-------------------
1 176 134 694
===========
Where financial instruments are recorded at fair value the amounts shown above represent the current risk exposure but not
the maximum risk exposure that could arise in the future as a result of changes in values. The effect of collateral and other risk
mitigation techniques is shown in the Net Maximum Exposure column below.
97
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
34.1.3 RISK CONCENTRATIONS OF MAXIMUM EXPOSURE TO CREDIT RISK ON LENDING ACTIVITIES
Loans to Directors and officers or their companies are included in advances and other accounts (note 20).
Inflation Adjusted Historical
GROUP
31 December
2020
Gross
Maximum
Exposure
ZWL
576 171 487
41 000 000
244 984 807
220 830 811
386 873 236
303 504 490
1 169 804
677 455 052
--------------------
2 451 989 687
(152 784 378)
--------------------
2 299 205 309
===========
31 December
2019
Net
Maximum
Exposure
ZWL
Restated
242 540 992
41 000 000
70 610 150
125 207 365
306 788 948
61 530 737
1 169 804
230 858 398
-------------------
1 079 706 394
31 December
2020
Gross
Maximum
Exposure
ZWL
434 087 244
10 754 380
393 795 281
132 143 741
566 169 298
273 362 783
5 190 674
576 952 386
-------------------
2 391 455 787
(152 784 378)
-------------------
926 922 016
==========
(76 776 964)
-------------------
2 314 678 823
===========
31 December
2019
Net*
Maximum
Exposure
ZWL
142 322 297
10 754 381
117 796 640
533 821
465 132 197
79 624 171
813 985
235 393 309
-------------------
1 052 370 801
(76 776 964)
-------------------
975 593 837
===========
Agriculture and horticulture
Conglomerates
Distribution
Food and beverages
Individuals
Manufacturing
Mining
Services
Expected credit loss on loans
and advances
Net exposure
34.1.4 COLLATERAL AND OTHER CREDIT ENHANCEMENTS
The amount and type of collateral required depends on an assessment of credit risk of the counterparty. There are guidelines
regarding the acceptability of types of collateral. The main types of collateral obtained are guarantees, cession of debtors,
mortgages over properties, equities, subordination of shareholder loans and promissory notes. The fair value of all collateral
held by the Group at the reporting date is ZWL2 277 537 972 (2019 - ZWL168 243 694).
34.1.5 Credit quality per sector on lending activities
Grade A
Pass
1 month
ZWL
576 171 487
41 000 000
244 350 426
220 830 811
364 456 235
281 890 627
161 425
667 584 171
3 months
ZWL
-
-
544 995
-
13 989 645
21 613 863
-
8 679 164
------------------- -------------------
2 396 445 182
44 827 697
=========== ==========
Grade B
Special
Grade C
Mention Substandard
1 year
ZWL
-
-
46 505
-
8 416 722
-
1 008 379
1 027 632
-------------------
10 499 238
==========
Grade D
Doubtful
5 years
ZWL
-
-
-
-
10 635
-
-
164 055
-------------------
174 690
==========
As at 31 December 2020
Assets
Agriculture and horticulture
Conglomerates
Distribution
Food and beverages
Individuals
Manufacturing
Mining
Services
Net exposure
98
Grade E
Loss
bearing
ZWL
-
-
42 880
-
-
-
-
-
-------------------
Total
Total
ZWL
576 171 487
41 000 000
244 984 807
220 830 811
386 873 236
303 504 490
1 169 804
677 455 052
-------------------
42 880 2 451 989 687
==========
==========
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
34.1.5 Credit quality per sector on lending activities
As at 31 December 2019
Assets
Agriculture and horticulture
Conglomerates
Distribution
Food and beverages
Individuals
Manufacturing
Mining
Services
Net exposure
Grade A
Pass
1 month
ZWL
96 736 044
-
86 796 019
25 776 366
116 216 130
60 447 282
996 626
121 210 663
3 months
ZWL
-
2 397 398
510 928
3 681 501
7 214 419
268 623
160 494
3 372 882
------------------- -------------------
17 606 245
=========== ==========
Grade B
Special
Grade C
Mention Substandard
1 year
ZWL
31 948
-
321 453
-
2 773 283
-
-
1 702 978
-------------------
4 829 662
==========
508 179 130
Grade D
Doubtful
5 years
ZWL
-
-
100 904
-
8 276
-
-
2 177 412
-------------------
2 286 592
==========
Grade E
Loss
bearing
ZWL
-
-
56 688
-
-
-
-
151 972
-------------------
208 660
==========
Total
Total
ZWL
96 767 992
2 397 398
87 785 991
29 457 868
126 212 109
60 715 905
1 157 120
128 615 906
-------------------
533 110 289
==========
Pass:
Special Mention:
Substandard: Refers to loans graded 8
Doubtful: Refers to loans graded 9
Loss: Refers to loans graded 10
Refers to loans graded 1 to 3
Refers to loans graded 4 to 7
34.1.6 Rating Scale mapping to IFRS 9 Stages
Below is a mapping table showing the link between IFRS stages and the Bank’s Rating scale:
NMB Bank Rating Scale
NMBR1
NMBR2
NMBR3
NMBR4
NMBR5
Supervisory Rating Scale
1
2
3
4
5
NMBR6
NMBR7
NMBR8
NMBR9
NMBR10
34.2 Market risk
6
7
8
9
10
IFRS 9
Stage 1
Stage 2
Stage 3
This is the exposure of the Group’s on and off balance sheet positions to adverse movement in market prices resulting in a loss in
earnings and capital. The market prices will range from money market (interest rate risk), foreign exchange and equity markets
in which the bank operates. The Group has in place a Management Asset and Liability Committee (ALCO) which monitors
market risk and recommends the appropriate levels to which the Group should be exposed at any time. Net Interest Margin is
the primary measure of interest rate risk, supported by periodic stress tests to assess the Group’s ability to withstand stressed
market conditions. On foreign exchange risk, the bank monitors currency mismatches and make adjustments depending on
exchange rate movement forecast. The mismatches per currency are contained within 5% of the Group’s capital position.
Management ALCO meets on a monthly basis and operates within the prudential guidelines and policies established by the
Board ALCO. The Board ALCO is responsible for setting exposure thresholds and limits, and meets on a quarterly basis. The
following table demonstrates the sensitivity to a reasonable change in interest rates, with all other variables held constant, of the
Group’s statement of comprehensive income.
The sensitivity of the statement of comprehensive income is the effect of the assumed changes in interest rates on the profit or
loss for the year, based on the variable and fixed interest rate financial assets and liabilities held at 31 December 2020.
99
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
34.
RISK MANAGEMENT (cont’d)
34.2 Market risk (cont’d)
As at 31 December 2020
Sensitivity of net interest income
ZWL
ZWL
ZWL
ZWL
ZWL
ZWL
%
Changes in
Interest
%
5%
3%
1%
-1%
-3%
-5%
0 to 1
month
ZWL
(110 186 271)
(66 111 762)
(22 037 254)
22 037 254
66 111 762
110 186 271
1 to 3 3 months to
1 year
ZWL
30 877 803
18 526 682
6 175 561
(6 175 561)
(18 526 682)
(30 877 803)
months
ZWL
(2 084 054)
(1 250 432)
(416 811)
416 811
1 250 432
2 084 054
1 year to
5 years
ZWL
29 759 809
17 855 885
5 9951 962
(5 951 962)
(17 855 885)
(29 759 809)
Total
Total
ZWL
(51 632 713)
(30 979 628)
(10 326 543)
10 326 543
30 979 628
51 632 713
At 31 December 2019
Sensitivity of net interest income
ZWL
ZWL
ZWL
ZWL
ZWL
ZWL
%
Changes in
Interest
%
5%
3%
1%
-1%
-3%
-5%
0 to 1
month
ZWL
33 164 948
(19 898 969)
(6 632 990)
6 632 990
19 898 969
33 164 948
1 to 3 3 months to
1 year
ZWL
(5 342 449)
3 205 470
1 068 490
(1 068 490)
(3 205 470)
(5 342 449)
months
ZWL
(649 091)
389 455
129 818
(129 818)
(389 455)
(649 091)
1 year to
5 years
ZWL
(12 033 593)
7 220 156
2 406 719
(2 406 719)
(7 220 156)
(12 033 593)
Total
Total
ZWL
15 139 815
(9 083 889)
(3 027 963)
3 027 963
9 083 889
15 139 815
34.3
Foreign currency exchange rate risk
The table below calculates the effect of a reasonable possible movement of the significant currency rate against the United
States Dollar, with all other variables held constant. A negative amount in the table reflects a potential net reduction in the
statement of comprehensive income or equity while a positive amount reflects a net potential increase.
31 December 2020
Sensitivity of net interest income
USD
USD
USD
USD
USD
USD
%
Changes in
Currency Rate
%
5%
3%
1%
-1%
-3%
-5%
Effect on profit
before Tax
ZWL
1 733 132
1 039 879
346 626
(346 626)
(1 039 879)
(1 733 132)
31 December 2019
Sensitivity of net interest income
USD
USD
USD
USD
USD
USD
100
%
Changes in
Currency Rate
%
5%
3%
1%
-1%
-3%
-5%
Effect on profit
before Tax
ZWL
(3 213 476)
(1 928 085)
(642 695)
642 695
1 928 085
3 213 476
Effect
On equity
ZWL
1 304 701
782 821
260 940
(260 940)
(782 821)
(1 304 701)
Effect
On equity
ZWL
(2 386 006)
(1 431 603)
(477 201)
477 201
1 431 603
2 386 006
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
34.4
LIQUIDITY RISK
Liquidity risk is the risk of financial loss arising from the inability of the Group to fund asset increases
or meet obligations as they fall due without incurring unacceptable costs or losses. The Group identifies this risk through maturity
profiling of assets and liabilities and assessment of expected cash flows and the availability of collateral which could be used if
additional funding is required.
The daily liquidity position is monitored and regular liquidity stress testing is conducted under a variety of scenarios covering both
normal and more severe market conditions. All liquidity policies and procedures are subject to review and approval by the Board
ALCO.
The key measure used by the bank for managing liquidity risk is the ratio of net liquid assets to deposits
to customers. The Group also actively monitors its loans to deposit ratio against a set threshold in a bid to monitor and limit
funding risk. The group monitors funding concentration risk by reviewing the ratio of top 20 depositors to the total funding.
Funding mix is also monitored by monitoring the contribution of wholesale and demand deposits to the total funding for the bank.
Liquidity risk is monitored through a daily liquidity reports produced by the Risk Management department. This is augmented by
a monthly management ALCO and a quarterly board ALCO meetings.
The contractual maturities of undiscounted cash flows of financial assets and liabilities are disclosed in note 28.1.
The key measure used by the Group for managing liquidity risk is the ratio of net liquid assets to deposits from customers. The
Group monitors its liquidity ratio in compliance with Banking Regulations to ensure that it is not less than 30% of the liabilities
to the public. Liquid assets consist of cash and cash equivalents, short term bank deposits and liquid investment securities
available for immediate sale.
At 31 December 2020
Guarantees
Commitments to lend
Irrevocable letters of credit
At 31 December 2019
Guarantees
Commitments to lend
Irrevocable letters of credit
on
Demand
%
-
-
-
-----------------
-
=========
0 to 1
month
ZWL
14 882 341
91 556
-
-----------------
14 973 897
=========
1 to 3 3 months to
1 year
ZWL
88 503 358
34 440 941
-
-----------------
122 944 299
=========
months
ZWL
4 032 850
13 102 589
-
-----------------
17 135 439
=========
1 year to
5 years
ZWL
-
-
-
-----------------
-
=========
Total
Total
ZWL
107 418 549
47 635 086
-
-----------------
155 053 635
=========
on
Demand
%
-
-
-
-----------------
-
=========
0 to 1
month
ZWL
221 500
267 946
-
-----------------
489 446
=========
1 to 3 3 months to
1 year
ZWL
126 362 506
17 759 134
-
-----------------
144 121 640
=========
months
ZWL
368 183
2 040 880
-
-----------------
2 409 063
=========
1 year to
5 years
ZWL
-
-
-
-----------------
-
=========
Total
Total
ZWL
126 952 189
20 067 960
-
-----------------
147 020 149
=========
The Group expects that not all of the contingent liabilities or facilities approved but not drawn down will be drawn before expiry.
34.5
Operational risk
This risk is inherent in all business activities and is the risk of loss arising from inadequate or failed internal processes, people,
systems or from external events. The Group utilises monthly Key Risk Indicators to monitor operational risk in all units. Further
to this, the Group has an elaborate Operational Loss reporting system in which all incidents with a material impact on the well-
being of the Group are reported to risk management. The risk department conducts periodic risk assessments on all the units
within the Group aimed at identifying the top risks and ways to minimise their impact. There is a Board Risk and Compliance
Committee whose function is to ensure that this risk is minimised. The Risk Committee with the assistance of the internal audit
function and the Risk Management department assesses the adequacy of the internal controls and makes the necessary
recommendations to the Board.
101
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
34.6
Legal and compliance risk
Legal risk is the risk from uncertainty due to legal actions or uncertainty in the applicability or interpretation of contracts,
laws or regulations. Legal risk may entail such issues as contract formation, capacity and contract frustration. Compliance
risk is the risk arising from non – compliance with laws and regulations. To manage this risk, permanent relationships are
maintained with firms of legal practitioners and access to legal advice is readily available to all departments. The Group has
an independent compliance function which is responsible for identifying and monitoring all compliance issues and ensures the
Group complies with all regulatory and statutory requirements.
34.7
Reputational risk
Reputation risk is the risk of loss of business as a result of negative publicity or negative perceptions by the market with
regards to the way the Group conducts its business. To manage this risk, the Group strictly monitors customers’ complaints,
continuously train staff at all levels, conducts market surveys and periodic reviews of business practices through its Internal
Audit department. The directors are satisfied with the risk management processes in the Group as these have contributed to
the minimisation of losses arising from risky exposures.
34.8
Strategic risk
This refers to current and prospective impact on a Group’s earnings and capital arising from adverse business decisions or
implementing strategies that are not consistent with the internal and external environment. To manage this risk, the Group
always has a strategic plan that is adopted by the Board of Directors. Further, attainment of strategic objectives by the various
departments is monitored periodically at management level.
34.9
Environmental, Social & Governance (ESG) Risk
Environment, Social and Governance (ESG) or sustainability risk is the consideration of non-financial risks arising from the
environment (flora and fauna) as well as societal issues. The Group is not only concerned about making profits, but is also
keen on assessing the impact it has on the planet and the people it interacts with. There is a growing number of frameworks
and standards aimed at addressing global concerns on sustainability. Global risk reports show that environmental and societal
risks have overtaken economic and geopolitical risks in terms of both likelihood and impact.
34.9.1 Reserve Bank of Zimbabwe Ratings
The Reserve Bank of Zimbabwe conducted an onsite inspection on the Group’s banking subsidiary on 24 November 2016.
Below are the final ratings from the onsite examination.
34.9.1
CAMELS* Ratings
CAMELS Component
Latest RBS** Ratings
24/11/2016
Previous RBS Ratings
30/06/2013
Previous RBS
Ratings
31/01/2008
Capital Adequacy
Asset Quality
Management
Earnings
Liquidity
Sensitivity to Market Risk
Composite Rating
2
3
3
2
3
2
3
2
4
3
2
2
2
3
4
2
3
3
3
3
3
*CAMELS is an acronym for Capital Adequacy, Asset quality, Management, Earnings, Liquidity and Sensitivity to Market
Risk. CAMELS rating system uses a rating scale of 1-5, where ‘1’ is Strong, ‘2’ is Satisfactory, ‘3’ is Fair, ‘4’ is Weak and ‘5’ is
Critical.
**RBS stands for Risk-Based Supervision.
102
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
34.9.1.2 Summary RAS ratings
RAS Component
Latest RAS*** Ratings
24/11/2016
Previous RAS Ratings
30/06/2013
Overall Inherent Risk
High
Overall Risk Management
Systems
Acceptable
Overall Composite Risk
Moderate
Direction of Overall Compos-
ite Risk
Stable
*** RAS stands for Risk Assessment System.
Moderate
Acceptable
Moderate
Stable
34.9.1.3 Summary risk matrix – 24 November 2016 on - site examination
Previous RAS
Ratings
31/01/2008
Moderate
Acceptable
Moderate
Stable
Type of Risk
Level of Inherent
Risk
Adequacy of Risk
Management
Systems
Overall
Composite
Risk
Direction of Overall
Composite Risk
Acceptable
Acceptable
Acceptable
Acceptable
Acceptable
Acceptable
Acceptable
Acceptable
Acceptable
High
High
Moderate
Low
Moderate
Moderate
Moderate
Moderate
Moderate
Stable
Stable
Stable
Stable
Stable
Stable
Stable
Stable
Stable
Credit
Liquidity
High
High
Interest Rate
Moderate
Foreign Exchange
Low
Strategic Risk
Moderate
Operational Risk
Moderate
Legal & Compliance Moderate
Reputation
High
Overall
Moderate
KEY
High
Moderate
Low
Level of Inherent Risk
Level of Inherent Risk
Low – reflects a lower than average probability of an adverse impact on a banking institution’s capital and earnings. Losses in
a functional area with low inherent risk would have little negative impact on the banking institution’s overall financial condition.
Moderate – could reasonably be expected to result in a loss which could be absorbed by a banking institution in the normal
course of business.
High – reflects a higher than average probability of potential loss. High inherent risk could reasonably be expected to result in
a significant and harmful loss to the banking institution.
Adequacy of Risk Management Systems
Weak – risk management systems are inadequate or inappropriate given the size, complexity and risk profile of the banking
institution. Institution’s risk management systems are lacking in important ways and therefore a cause of more than normal
supervisory attention. The internal control systems will be lacking in important aspects particularly as indicated by continued
control exceptions or by the failure to adhere to written policies and procedures.
103
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
34.
RISK MANAGEMENT (continued)
Acceptable – management of risk is largely effective but lacking to some modest degree. While the institution might be
having some minor risk management weaknesses, these have been recognised and are being addressed. Management
information systems are generally adequate.
Strong – management effectively identifies and controls all types of risk posed by the relevant functional areas or per inherent
risk. The board and senior management are active participants in managing risk and ensure appropriate policies and limits are
put in place. The policies comprehensively define the bank’s risk tolerance, responsibilities and accountabilities are effectively
communicated.
Overall Composite Risk
Low – would be assigned to low inherent risk areas. Moderate risk areas may be assigned a low composite risk where
internal controls and risk management systems are strong and effectively mitigate much of the risk.
Moderate – risk management systems appropriately mitigates inherent risk. For a given low risk area, significant weaknesses
in the risk management systems may result in a moderate composite risk assessment.
On the other hand, a strong risk management system may reduce the risk so that any potential financial loss from the activity
would have only a moderate negative impact on the financial condition of the organisation.
High – risk management systems do not significantly mitigate the high inherent risk. Thus, the activity could potentially result
in a financial loss that would have a significant impact on the bank’s overall condition.
Direction of Overall Composite Risk
Increasing – based on the current information, risk is expected to increase in the next 12 months.
Decreasing – based on current information, risk is expected to decrease in the next 12 months.
Stable – based on the current information, risk is expected to be stable in the next 12 months.
34.9.2
External Credit Ratings
The external credit ratings were given by Global Credit Rating (GCR), a credit rating agency accredited with the Reserve Bank
of Zimbabwe.
Security class
Long term
2020
-
2019
BB-
The current rating which was due to expire in August 2020 was withdrawn by GCR on 23 June 2020 following the Bank’s
waiver of external ratings.
The Bank waived the 2020/2021 external ratings in line with a general dispensation extended by the Reserve Bank of
Zimbabwe due to the COVID-19 pandemic.
34.10
Regulatory Compliance
There was no regulatory breach resulting in penalties during the period under review. The Bank is committed to comply with
and adhere to all regulatory requirements.
34.11 Capital management
34.11.1 Holding company
The capital allocation to the subsidiary units is in accordance with the regulatory requirements of the business undertaken by
the subsidiary.
104
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (Cont'd)
for year ended 31 December 2020
34.11.2 Banking subsidiary
The primary objective of the Bank’s capital management is to ensure that the Bank complies with the RBZ requirements. In
implementing the current capital requirements, the RBZ requires the Banking subsidiary to maintain a prescribed ratio of total
capital to total risk weighted assets.
Regulatory capital consists of Tier 1 capital, which comprises share capital, share premium, retained earnings (including
current year profit), statutory reserve and other equity reserves.
The other component of regulatory capital is Tier 2 capital, which includes subordinated term debt, revaluation reserves and
portfolio provisions.
Tier 3 capital relates to an allocation of capital to market and operational risk.
Various limits are applied to elements of the capital base. The core capital (Tier 1) shall comprise not less than 50% of the
capital base and the regulatory reserves and portfolio provisions are limited to 1.25% of total risk weighted assets.
The Bank’s regulatory capital position at 31 December was as follows:
Inflation Adjusted
Historical Cost
2020
ZWL
2019
ZWL
Restated
2020
ZWL
2019
ZWL
Less: capital allocated for market and operational risk
Share capital
Share premium
Retained earnings
Functional currency translation reserve
726 287
1 287 623 341
1 816 157 257
287 529 426
------------------
3 392 036 311
(192 509 961)
-------------------
Tier 1 capital
3 199 526 350
Tier 2 capital (subject to limit as per Banking Regulations) 765 139 640
668 131 497
Fair valuation gains on land and buildings
Subordinated debt
-
Stage 1 & 2 ECL provisions – (limited to 1,25%
97 008 143
of risk weighted assets)
Tier 1 & 2 capital
3 964 665 990
Tier 3 capital (sum of market and operational risk capital) 192 509 961
--------------------
4 157 175 951
===========
7 909 196 976
Total risk weighted assets
Total capital base
726 287
1 287 623 341
975 166 841
287 529 426
--------------------
2 551 045 895
(61 484 344)
-------------------
2 489 561 551
568 942 764
487 104 622
1 355 410
80 482 732
3 058 504 315
61 484 344
--------------------
3 119 988 659
===========
6 438 618 594
16 506
31 474 502
2 142 925 978
11 619 648
-------------------
2 186 036 634
(192 509 961)
--------------------
1 993 526 673
1 162 890 432
1 067 266 443
-
16 506
31 474 502
329 398 472
11 619 648
----------------
372 509 128
(13 706 269)
-----------------
358 802 859
194 315 734
176 079 950
294 339
17 941 445
95 623 989
553 118 593
3 156 417 105
13 706 269
192 509 961
-----------------
-------------------
3 348 927 066
566 824 862
=========== ==========
7 649 919 150 1 435 315 609
Tier 1 ratio
Tier 2 ratio
Tier 3 ratio
Total capital adequacy ratio
RBZ minimum required
35.
EVENTS AFTER REPORTING DATE
40.45%
9.67%
2.43%
52.56%
12.00%
38.67%
8.84%
0.95%
48.46%
12.00%
26.06%
15.20%
2.52%
43.78%
12.00%
25.00%
13.54%
0.95%
39.49%
12.00%
Subsequent to the Group’s year end date of 31 December 2020, the Government of Zimbabwe announced more stringent
COVID-19 induced lockdown measures in an attempt to contain the spread of the novel Corona virus. The Directors assessed
this development and concluded that this had no impact on the Group’s operations, largely due to the fact that the nation had
been operating under lockdown conditions of varying degrees for the greater part of the year and no material adverse impact
was noted in terms of the Group’s operations.
105
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
HISTORICAL FIVE YEAR FINANCIAL SUMMARY (Cont'd)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Interest income
Interest expense
Net interest income
Net foreign exchange gains
Fee and commission income
Revenue
Other income
Operating income
Operating expenditure
Impairment losses on financial assets
measured at amortised cost
Impairment losses on loans and advances
Profit before taxation
Taxation credit/(charge)
Profit after taxation
Other comprehensive income
Revaluation of land and buildings,
net of tax
Translation gain on change in functional
currency, net of tax
Total comprehensive income
for the year
2020
ZWL
2019
ZWL
2018
ZWL
2017
ZWL
2016
ZWL
501 216 271
(90 638 279)
---------------------
410 577 992
217 274 144
815 541 357
---------------------
1 443 393 493
1 226 846 996
---------------------
2 670 240 489
(814 190 000)
(127 974 740)
-
---------------------
1 728 075 749
85 514 320
--------------------
1 813 590 069
70 557 190
(16 894 088)
--------------------
53 663 102
99 863 112
87 242 303
---------------------
240 768 517
206 622 639
---------------------
447 391 156
(105 937 502)
39 333 178
(8 865 016)
-------------------
30 468 162
1 899 670
28 539 376
--------------------
60 907 208
4 968 447
--------------------
65 875 655
(34 720 428)
32 061 931
(9 157 095)
-------------------
22 904 836
1 583 164
18 832 185
--------------------
43 320 185
1 129 001
--------------------
44 449 186
(27 578 347)
33 860 139
(11 075 067)
------------------
22 785 072
743 255
15 179 149
------------------
38 707 476
1 737 860
------------------
40 445 336
(26 176 706)
(11 048 567)
-
---------------------
330 405 087
(44 504 548)
--------------------
285 900 539
(4 011 952)
-
--------------------
27 143 275
(5 922 074)
-------------------
21 221 201
-
(3 853 149)
--------------------
13 017 690
(3 078 864)
-----------------
9 938 826
-
(8 059 726)
-------------------
6 208 904
( 1 150 738)
-----------------
5 058 166
891 168 492
175 943 209
46 431
90 310
(2 970)
-
---------------------
11 619 648
-----------------
-
-------------------
-
-------------------
-
------------------
2 704 776 561
============
473 463 396
==========
21 267 632
===========
10 029 136
5 055 196
=========== ===========
106
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
HISTORICAL FIVE YEAR FINANCIAL SUMMARY (Cont'd)
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
SHAREHOLDER’S FUNDS
Share capital
Reserves
Functional currency translation reserve
Revaluation reserves
Retained earnings
Total equity
Subordinated loan
Redeemable ordinary shares
Total shareholders’ funds and
shareholders liabilities
LIABILITIES
Deposits and other liabilities
Deferred tax liabilities
Current tax liabilities
Capital employed
ASSETS
Cash and cash equivalent
Investments securities
Deferred tax assets
Current tax assets
Loan, advances and other assets
Non-current assets held for sale
Quoted and other investments
Trade investments
Investment properties
Property and equipment
Intangible assets
Employment of capital
2020
ZWL
2019
ZWL
2018
ZWL
2017
ZWL
2016
ZWL
84 116
19 121 607
11 619 648
1 067 266 442
2 143 095 638
---------------------
3 241 187 451
132 632 641
14 335 253
--------------------
84 116
19 184 170
11 619 648
176 079 950
329 505 569
--------------------
80 975
64 040 438
-
-
-
-------------------
78 751
49 821 935
-
-
-
-------------------
78 598
37 771 065
-
-
-
------------------
536 473 453
28 360 340
14 335 253
-----------------
64 121 143
1 505 647
14 335 253
-----------------
49 900 686
1 415 904
14 335 253
-----------------
39 849 663
1 415 490
14 335 253
-----------------
3 388 155 345
--------------------
579 169 046
-----------------
79 962 313
-----------------
65 651 843
-----------------
55 600 406
-----------------
6 413 943 465
174 727 794
57 205 065
--------------------
10 034 031 669
============
1 964 637 240
1 081 820 457
-
-
3 730 886 733
-
-
10 877 672
1 653 496 476
1 588 179 384
4 133 707
---------------------
10 034 031 669
============
1 268 146 016
97 653 191
624 937
-----------------
1 945 593 190
447 105 283
-
-
-----------------
527 067 596
============ ============
492 304 267
107 166 155
-
-
817 960 242
-
-
1 612 131
229 867 982
295 285 227
1 397 186
---------------------
1 945 593 190
112 440 912
117 249 434
1 908 532
285 822
254 202 945
36 000
-
112 501
20 950 606
17 844 069
2 036 775
--------------------
527 067 596
============ ============
356 912 509
-
-
-----------------
422 564 352
============
89 553 202
92 245 425
1 204 449
231 007
210 483 221
36 000
88 650
102 347
18 977 000
7 335 988
2 380 180
--------------------
422 564 352
============
265 384 520
-
-
-----------------
320 984 926
===========
69 421 257
24 744 752
2 264 907
368 445
199 617 095
2 261 300
68 220
88 930
14 202 270
6 280 286
1 647 034
------------------
320 984 926
===========
107
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
HISTORICAL FIVE YEAR FINANCIAL SUMMARY (Cont'd)
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
CLOSING NUMBER OF SHARES
404 171 689
404 171 689
392 955 196
384 974 542
384 427 351
2020
ZWL
2019
ZWL
2018
ZWL
2017
ZWL
2016
ZWL
Share performances
Net asset value per share (ZWL cents)
Basic earnings per share (ZWL cents)
Dividend per share (ZWL cents)
Dividend cover (times)
Price/earnings ratio
Closing price per share (ZWL cents)
724.70
448.72
-
-
0.89
400
136.28
71.56
-
-
0.57
41
19.98
16.69
5.43
0.96
5.64
4.44
24
2.58
0.15
17.2
3.49
9
14.46
1.32
-
-
2.97
3.9
Market capitalisation (ZWL)
1 616 686 756
165 710 392
94 309 247
34 647 709
14 992 667
Financial performance
Return on shareholders’ funds (%)¹
Return on assets (%)
Total cost/net income total income (%)²
Non-interest income/total income (%)
Effective tax rate (%)
92.34%
26.96%
35.28%
81.85%
-4.95%
81.75%
24.42%
26.15%
44.50%
18.79%
27.03
4.03
58.8
47.37
21.85
15.28
2.37
70.7
40.1
23.7
9.1
1.6
84.6
43.7
18
1. The return on shareholders’ funds is based on shareholders’ funds at the end of the year.
2. Includes charge for impairment of losses on loans and advances.
At an Extraordinary General Meeting held on 19 February 2014, the Company approved a share consolidation exercise at a ratio of 10:1 and
consolidated 3 500 000 000 (3.5 billion) shares with a nominal value of ZWL0.000028 per share to 350 000 000 (350 million) shares with a
nominal value of ZWL0.00028 per share. The Company also approved an increase in the authorized share capital from 350 000 000 shares
with a nominal value of ZWL0.00028 per share to 600 000 000 shares with a nominal value ZWL0.00028 per share.
108
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT
SUSTAINABILITY REPORT
Sustainability Key Performance Indicators for the year ended 31 December 2020.
Below is a list of the Group’s Key Performance Indicators (KPIs) based of GRI standards against the Sustainable Development Goals (SDGs). The reporting was mainly
qualitative and the group is working on a framework to adopt quantitative impact analysis
GRIs
Disclosure
SDG No.
Focus Area
Measure
Environmental No.7 -
Energy
Affordable and
clean energy.
Reduce electricity
consumption or
purchase and
invest in green
solar energy.
Organizational
Achievements
Generates 50kWp
from solar energy.
Progress
subsidiary
The Banking
has
been aggressive in implementing
reduce energy
measures
that
its operations
in
consumption
that
through various
initiatives
include switching off of
lights
when not in use and acquisition of
sensor light bulbs. The Bank also
successfully established its own and
first solar energy power source at
the newly built Headquarters (HQ)
in Borrowdale, Harare. The new
green energy source generates up
to 50kWp (kilowatts peak). Of this,
50% of the energy is used to power
the HQ‘s entire Data Centre and
the remaining 50% is intended to
be used to power the head office’s
lighting and air conditioning systems.
The Banking subsidiary is also in
consultation with various partners
with the aim offering green energy
products. The Bank will finance the
purchase and installation of solar
equipment
for corporate entities
as well as for households. The
Group has started operationalizing
its carbon footprint measurement
procedures.
and
processes
Measurement of the base year’s
metric tonnes of carbon dioxide
equivalent (CO2e) is under way
and the Group’s Greenhouse Gas
(GHGs) contributions
Emissions
are expected to be disclosed in the
next reporting period. As a result, the
bank’s direct and indirect sources
of emissions are recorded and
monitored as per Greenhouse Gas
Protocol guidelines(Scope1, Scope
2 & Scope 3).
109
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
SUSTAINABILITY REPORT (Cont'd)
GRIs
Disclosure
SDG No.
Focus Area
Measure
Environmental No.13 - Climate
Action.
Financing of
sustainable
projects.
Responsible
financing
Organizational
Achievements
ESRM policy,
trainings, Exclusion
list, NMB Bank
statement of
commitment to
Responsible
Financing.
Progress
For NMB Bank, the safety of people
and the environment is of paramount
importance. The Group recognizes
that environmental management
is integral to good business prac-
tice and this is outlined within the
bank’s Environmental & Social Risk
Management Policy (ESRM). The
framework provides NMB Bank’s
Statement of Commitment to Re-
sponsible Financing as well as the
Financing Exclusion List. The Bank
only supports business projects and
operations that are considered to
have lesser E&S risks or implement-
ed effective mitigatory measures. As
a result, the Bank performs an Envi-
ronmental and Social Due Diligence
screening process before any finan-
cial support to both Corporates and
SMEs. The Group also considers
suppliers who are sensitive to sus-
tainability
implementation
of Environmental and Social Man-
agement Systems as appropriate
to their businesses and align them
with best practice activities including
the following; setting environmental
and social targets, reduce impact
and report progress. The Group en-
courages its corporate customers to
prioritize their respective employee
rights, workers’ health & safety, child
labor issues as well as to effectively
manage their greenhouse emissions
as they carry out their business op-
erations. Corporate and SMEs bor-
rowers with a combined exposure of
ZWL7,9million or 0.33% of the total
loan book had their projects rated
high risk (Cat A) but with adequate
and effective control measures in
place. The remaining portion of the
book (99.67%) was rated medium
risk (Cat B) and low risk (Cat C).
through
110
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT SUSTAINABILITY REPORT (Cont'd)
GRIs
Disclosure
SDG No.
Focus Area
Measure
Environmental No. 14 - Life
below water
Promotion of life
on land and below
water.
Environmental
management
compliance as
well as being
among leaders in
promoting initiatives
that seek to protect
life below water
as well as flora &
fauna.
Organizational
Achievements
Complying with
by-laws, national
and international
regulations and
best standards.
Progress
local
assessment
NMB Bank respects and promotes
international
both
and
environmental
management
regulations and best
initiatives,
practices regarding the wetlands,
protected areas and species. The
Group ensures that environmental
issues are embedded in the core
business strategy and operations
form part of credit
as well as
risk
processes.
Environmental risk standards are
clearly referenced
in our credit
sanctioning policies. Our property
and land valuers together with our
credit processes & procedures
assist in assessing the history of a
piece of land and the operational
implications of a site’s current or
intended commercial use. Through
Environmental & Social (E&S) risk
due diligence and related covenants,
our
compelled
to identify E&S risks within their
operations and organizations, take
measures that reduce the risks as
well as disclose them to relevant
stakeholders.
customers are
111
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT SUSTAINABILITY REPORT (Cont'd)
GRIs
Disclosure
SDG No.
Focus Area
Measure
Environmental No.12 -
Responsible
Construction &
Production.
Sustainable
projects and
production.
Effective waste
management
processes,
procedures and
enhancement
of other carbon
emission measures.
Organizational
Achievements
Waste management
policies and
paperless banking
model.
Progress
innovation and
At NMB Bank, the prevention of
waste takes priority over recycling
or disposal. Therefore, every effort
is made during the development
of products to ensure that as little
waste is generated as possible. Un-
avoidable operational waste (mainly
paper) is recorded disposed proper-
ly. The Group continues to automate
and replace paper with technology
driven solutions. Through prod-
uct
technological
investments,
the Bank continues
to embrace digitalization through
automation of its operational and
customer
transactional process-
es across the entire business. The
Bank invested into various appli-
cations and systems that included
NMBMobile, NMBConnect for easy
and mobile account opening and
customer
IApprove
transactions,
for internal applications & authority
sought, SmartStream software for
stationery acquisitions and account-
ing, Credit Quest for loan application
and assessment as well as Point
of sale machines for withdrawals
and deposits. Resultantly, the use
of paper and ink (printers) reduced
significantly during the current year.
Through its influence, NMB Bank
encourages its customers to uphold
best waste management practices.
The bank conducts relevant screen-
ing for its borrowers, suppliers and
partners in fulfilment of its commit-
ment to sustainable financing and
way of doing business. The Group
also work in close cooperation with
the key stakeholders such as the
government’s Environmental Man-
agement Agency (EMA) in managing
disposables and the environment at
large.
112
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT SUSTAINABILITY REPORT (Cont'd)
GRIs
Disclosure
Social
SDG No.
Focus Area
Measure
No. 16 -
Peace, Justice
and strong
Institutions.
Human Rights
advocacy and
promotion.
Promote Human
Rights initiatives
through support
and embedding in
our systems and
policies relevant
measures.
Organizational
Achievements
Complying
with national
& international
Human Rights law
and best standards.
Staff and customers
rights policies &
procedures.
Progress
The Group operates in accordance
with the Zimbabwe Human Rights
Commission Act and recognizes
other internationally accepted human
rights standards, including the UN
Guiding Principles on Business and
Human Rights. We respect and
promote human rights through our
employment policies and practices,
through our supply chain screening
and engagement as well as through
the responsible provisioning of our
products and services. NMB Bank’s
Human Resources (HR) Manual,
of Conduct, Consumer
Code
Protection Policy, Service Standards
and Prevention of Bullying &
Sexual Harassment at Work Policy
are all drawn and summarize our
objectives and commitment to this
aspect. These are reviewed at least
once per year. Human rights issues
are incorporated into our client and
customer due diligence processes.
Our Code of Conduct outlines how
we expect our staff to behave and
the required standards of working.
The code makes specific reference
to human rights and covers a
number of issues relevant to client
review. The bank continues to put
in place controls and monitoring
measures that assist in enhancing
human rights management systems.
113
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT SUSTAINABILITY REPORT (Cont'd)
GRIs
Disclosure
Social
SDG No.
Focus Area
Measure
No.4 Quality
Education.
Training and
Education.
Create an
environment and
products that
support education
for all and staff
training.
Organizational
Achievements
NMBEdulearn,
Customer and
staff educational
loans.(School &
University fees
loans).
Progress
As a Group, we will continue to make
substantial investment in our people
through training and development to
enable them to execute their duties
effectively and to support them to
fulfil their individual ambitions. The
Banking subsidiary makes use of its
online NMBEdulearn platform that
seeks to promote communication,
training and development of all its
employees across all units and
levels. This ranges from induction
courses for new employees, product
knowledge, academic and technical
skills. A number of workshops and
trainings were also conducted
through other online platforms and
channels such as Zoom and Teams.
Resultantly, each and every staff
member (100%) was afforded an
opportunity to go through knowledge
or and skills enhancement session
through trainings and workshops.
In support, the Group offers a wide
range of educational loan facilities
to its customers and staff. The
credit facilities are meant to assist
primary, secondary and
tertiary
level students. The same facilities
were also extended to educational
corporate service providers, school
teachers and
lecturers across
the country. As a result, a total
of ZWL45,8million was directly
advanced to the education sector as
at 31 December 2020.
114
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT SUSTAINABILITY REPORT (Cont'd)
GRIs
Disclosure
Social
SDG No.
Focus Area
Measure
No.5 Gender
Equality.
Diversity and equal
opportunity.
Diversity and equal
opportunity for
employment and
access to financial
services by all
customers.
Organizational
Achievements
NMB Bank Staff
Gender Policy,
Recruitment &
Selection and
Promotions &
Transfer Policies.
Social
No.5 Gender
Equality.
Remuneration for
women and men.
Equal remuneration
for women and
men.
Performance
Management
Policy, Performance
Based Reward
& Remuneration
Policy and
Benefit Policies &
Procedures.
Social
No.6 Clean
water&
sanitation
Access to basic
social amenities.
Mortgage loans,
funding to
municipalities, road
& dam construction
and health.
Offer products
that directly and
indirectly promote
provisioning of
clean water and
sanitation, health
and transport
infrastructure.
Progress
The Group respects and promotes
diversity and equal opportunities to
all staff and customers regardless
of gender. Employment and staff
promotions are based on merit.
Our staff promotions are based
on performance, qualification and
experience. Our Human Resources
policies such as Gender Policy,
Recruitment & Selection, and
Promotions & Transfer Policies
outline the Group’s commitment to
diversity and equal opportunities for
all. As at 31 December 2020, 40.74%
of staff complement were women
and the institution is targeting a 50%
proportion as and when opportunities
arise. The Banking subsidiary offers
its products to both new and existing
customers regardless of gender.
Resultantly, a total of ZWL22,7million
worth of credit facilities was granted
to women only businesses.
Clear and transparent remuneration
policies are
in place. Employee
salaries are based on merit and
not one’s gender. Performance
Management Policy, Benefit Policies
& Procedures and Performance
Based Reward & Remuneration
Policies are all in place in support
of this noble cause. Employees who
occupy same positions are equally
graded and remunerated based on
the Paterson Job Grading system.
In
specific
NMB Bank has been financing
various projects both in the public
and private sectors in support of
clean water provisioning, health,
housing and transport infrastructure
building.
terms,
these included financing of dam
construction by private corporates,
financing of local council operations,
housing projects and borehole
drilling
for schools as well as
donations to various communities.
As a result, facilities amounting to
ZWL767,8million were advanced
to finance the health sector, water,
ICT and roads rehabilitations and
construction projects across
the
country. A total of ZWL91,7million
worth of mortgage facilities were
also granted.
115
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT Progress
The Group respects and promotes
employee rights and their freedom
of association. In support of this,
the Banking subsidiary has in place
a Workers’ Committee & Works
Council, Disciplinary & Grievance
Procedure as well as the guidelines
for managing disciplinary hearings.
The bank continues to tolerate and
creates an enabling environment
for employee rights and freedom of
association to be respected through
support and establishment of internal
& national workers labor structures
as well as affording workers the right
to be represented in all disciplinary
processes and collective bargaining
& labor relations.
The group adheres to all government
of Zimbabwe’s laws and regulations
as well as by-laws in an effort to
protect the environment and people.
The Group works hand in hand with
institutions such as the government’s
Environmental Management Agency
(EMA) as well as local authorities
in reducing environmental, social
and related risks. The Group had no
record of monetary or non-monetary
sanctions for non-compliance with
set laws and regulations. We are
committed to continue complying
with all applicable local, national
regulations
and
social
on
issues. Beyond compliance,
the
Group continues to integrate and
enhance environmental and social
considerations into its operations
and business decisions in all units
and facets of the Bank. Compliance
to ESG regulations forms part of
terms and conditions or covenants
for our borrowers and partners.
international
environmental
and
SUSTAINABILITY REPORT (Cont'd)
GRIs
Disclosure
Social
SDG No.
Focus Area
Measure
No.16 Peace,
justice & strong
institutions.
Employee rights
and freedom of
association.
Promotion of
employee freedom
of association
and collective
bargaining.
Organizational
Achievements
Worker's
Committee &
Works Council,
Disciplinary
& Grievance
Procedures.
Social
No.16 Peace,
justice & strong
institutions.
Environmental,
Social &
Governance
(ESG) laws and
regulations.
Compliance with
internal, national
and international
laws, regulations
and best standards
Complying with
E&S management
regulations and
best standards.
(ESG Coordinator
and Compliance
Dept.).
116
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT SUSTAINABILITY REPORT (Cont'd)
GRIs
Disclosure
Social
SDG No.
Focus Area
Measure
No.3 Good
Health & well-
being.
Occupational
Health & working
Conditions.
Best practices
regarding Staff
Welfare, Heath &
working Conditions.
Organizational
Achievements
Staff Medical
Aid facility, HIV
policy, Employer
Funeral Scheme,
Pension Fund and
Covid-19 response
Committee.
Progress
The Group respects and considers
the safety and welfare of its work-
force. NMB Bank has in place; Staff
Medical Aid facility, HIV Policy, Pen-
sion Fund and Employer Funeral
assisted scheme for its employees.
The Group in fighting HIV at work
places also supplies condoms to its
staff across its branch network. It
also provides dust coats, masks and
fresh milk for tellers amongst other
interventions aimed at promoting
good health. With the outbreak of
the Covid-19 pandemic, the institu-
tion had to enhance its health and
safety measures for both customers
and employees. The Group timeous-
ly updated and operationalized its
Business Continuity Plan (BCP) as
a way to minimize the spread and
impact of the novel virus. Begin-
ning April 2020, the bank initiated
various Covid -19 induced health
and safety measures that included
awareness programs, decongestion
of workplaces through telecommut-
ing, Branch disinfections, social dis-
tancing through reduction of physical
meetings amongst staff as well as
customer physical interaction. The
group also invested in temperature
screening thermometers, hand san-
itizers, gloves, foot bath & sanitizers,
sneeze guards, face masks with
staff going for Covid-19 virus testing.
In this regard, employees were as-
sisted both financially and emotion-
ally. Those that tested positive for
the virus were afforded time to seek
medical assistance and to recover
before resuming their duties. Con-
tact tracing was also conducted and
all affected employees were put on
isolation as per World Health Orga-
nization’s guidelines. Unfortunately,
one casualty or employee death due
to the Covid-19 virus was recorded
in January 2021. The Group contin-
ues to prioritize the health and safety
of its workers and customers going
into 2021, especially considering
the Covid-19 second wave current-
ly in motion across the country. The
Group will also continue to provide
transport to its staff to and from work.
117
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT SUSTAINABILITY REPORT (Cont'd)
GRIs
Disclosure
Economic
SDG No.
Focus Area
Measure
No.16-Peace,
justice & strong
institutions.
Whistleblowing,
Bribery and
Corruption free
organization.
Bribery and
Corruption free
organization.
Organizational
Achievements
Ethics Charter,
Code of Conduct,
Anti-Bribery &
Corruption and Tip-
Offs Anonymous
reporting policies.
Economic
No.16 Peace,
justice & strong
institutions.
Grievances,
Customer
Complaints &
Privacy.
Minimize legal and
reputational risks
through reduction
of customer
complaints and
lawsuits.
Service Standards,
Confidentiality&
Interests
Declaration,
Consumer
Protection policy as
well as staff Code
of Conduct and
Ethics Charter.
Economic
Economic
performance.
No. 8 Decent
work and
economic
growth.
Financial
disclosures.
Profitable and
growing business,
which creates jobs
and contributes
to the economic
success.
118
Progress
We aspire to run our business in
an open and transparent manner
and therefore have a zero tolerance
approach to bribery and corruption.
Staff Manual, Ethics Charter, Code
of Conduct, Anti-bribery & Corruption
and
our Tip-Offs Anonymous
reporting policy summarize our
commitment
in conducting our
activities free from any form of
bribery and corruption. The Group
conducts anti-bribery and corruption
trainings and workshops as well as
comprehensive risk assessments.
This covers all units across business
functional and geographical lines.
The Group also uses its Audit Hotline
and Tip-off Anonymous facilities in
order to cab all types of malpractices
by its employees and its customers.
A total of nine permanent employees
left the bank following disciplinary
processes during the period under
review.
We are committed
to continue
offering excellent services to new
and old customers. The Code
of Conduct, Service Standards,
Competition Act, Confidentiality and
Interests Declaration, Consumer
Protection Policy are all in place to
give guidance to the staff on how to
conduct themselves and to protect
the customers. The Group provides
platforms for customers to convey
their grievances and complaints.
These include customer Complaints
& Query boxes across all our
networks, Complaints
registers,
Online Enquiries desk and various
social media platforms. Customer
complaints are
into our
Operational Loss Tracker (OLTs)
system as they are received across
all units. The complaints are then
quantified, analyzed, managed,
resolved and reported. No penalty
charge to the bank was recorded
during the reporting period.
logged
report
We
the direct economic
value generated and distributed in
our financials including revenues,
operating costs, economic value
retained and dividends paid. We
also publish our turnover, profits
and taxes paid during the reporting
period.
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT SUSTAINABILITY REPORT (Cont'd)
GRIs
Disclosure
Economic
SDG No.
Focus Area
Measure
Economic growth.
Indirect economic
impacts.
No. 8 Decent
work and
economic
growth.
Organizational
Achievements
Non-financial
disclosures and
E&S product
innovations.
Progress
to
help
environmental
To achieve long term sustainable
economic growth, a number of policy
challenges must first be addressed,
including; ESG disclosures, raising
employment, improving access to
housing and supporting families in
planning for their futures. All of these
goals rely on access to appropriate
and responsible finance. In addition,
new solutions to help tackle social
and
challenges
also need access to appropriate
financing
innovate,
develop, commercialize and scale
deployment. NMB Bank supports
SMEs and youths through offering
low cost products such as NMBlite
accounts and loan products. The
Bank recruited a number of Agents
and Brand Ambassadors to market
its products that include the Tapcard,
NMBConnet services as well as
loans to MicroFinance institutions.
With the Covid-19 pandemic adverse
effects to the business operations
in all sectors of the economy and
the bank
borrowing customers,
to consider
it upon
took
itself
to
repayment moratoriums
loan
organizations faced with cash follow
challenges. Resultantly, corporates
& SMEs with a combined exposure
of ZWL24,7mln had their monthly
repayments deferred by the bank
as a way of assisting borrowers
who could not shoulder the sudden
impact of the pandemic.
119
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT SUSTAINABILITY REPORT (Cont'd)
GRIs
Disclosure
Economic
SDG No.
Focus Area
Measure
No. 11
Sustainable
cites &
communities.
Community support Corporate Social
Responsibility
(CSR).
Organizational
Achievements
Direct and indirect
community support.
Economic
No. 12
Responsible
consumption &
production.
Best Procurement
practices.
Best Procurement
practices.
Complying with
the Zimbabwe
Procurement
Act. NMB Bank
Procurement
Committee.
Progress
As a Group, we play a broader role
in the communities in which we live
and work beyond what we deliver
through our core business activities.
We support communities by; Invest-
ing money, time and skills in partner-
ships with respected and relevant
non-governmental
organizations,
charities and social enterprises.
This enables colleagues to use their
professional skills and expertise
in a range of activities, including
volunteering and fundraising. The
Group assisted the disadvantaged
and those that were affected by the
Covid-19 pandemic. The support
was either directly or through the
industry association, Bankers Asso-
ciation of Zimbabwe (BAZ). Other
charitable assistance and participa-
tion were those to do with Covid-19
awareness campaigns, World Can-
cer, Hearing and Kidney commem-
orations day. A total of ZWL621,353
was channeled towards this societal
responsibility. The Group is also in
the process of creating a stand-alone
Covid-19 Support Fund, where all
NMB Bank stakeholders will make
voluntary contributions towards the
containment of the disease across
societies.
All suppliers are treated equally and
fairly in accordance with Zimbabwe
Procurement Act, other
relevant
laws, regulations and best standards.
We select suppliers based upon best
value and seek ways to maximize
from all segments
competition
of society. The Group considers
environmental management, human
rights, diversity and
inclusion,
societal responsibility and product
T&Cs
responsibility.
applies to prospective and existing
suppliers and compel them to comply
with all applicable national and local
laws of their specific geography. An
NMB Bank Procurement committee
is also in place.
Supplier’s
120
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT SUSTAINABILITY REPORT (Cont'd)
GRIs
Disclosure
Economic
SDG No.
Focus Area
Measure
Organizational
Achievements
Progress
No. 1 No
poverty
Job creation &
Poverty eradication.
Job creation &
Poverty eradication.
Appealing and
affordable products.
Through innovation initiatives, the
Group offers a range of exciting
and low cost products that have
seen the rural, old age, women,
the disadvantaged and the youth
being able to have bank accounts,
bank cards and employment. These
(242,103
include our NMBLite
customers) account,
for
the unbanked populace, and the
Tapcard, which is mainly aimed at
easing the cash challenges for the
commuting public. The Group also
offered credit
to SMEs
(ZWL275,7million) and individuals
(ZWL304,6million)
the
country. These included both rural
and urban customers.
targeted
facilities
across
Economic
No. 17
Partnerships
for the goals.
Attainment of
Sustainable
Development Goals
(SDGs).
Support and
collaborate with
other stakeholders
in attainment of
SDGs.
Partnerships
with Government
institutions, Local
authorities, NGOs
and International
stakeholders.
local authorities,
The Group will continue working
together with NGOs, Churches,
corporates,
the
Government and other international
organizations in ensuring that the
Sustainable Development Goals
(SDGs) are achieved. It will continue
to enhance and
introduce new
sustainable products and programs
and widen its influence in the areas
of ESG
issues. The Group will
continue to support both financially
and in kind, the attainment of SDGs
by year 2030, with the main targets
being Quality education, Clean water
& sanitation, Good health & well-
being, Zero hunger, Decent work &
economic growth, Affordable & clean
energy, Responsible consumption &
Production, Gender equality, Climate
action, Partnership for goals and
Peace, Justice & Strong institutions.
121
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT NOTICE TO MEMBERS
Notice is hereby given that the 26th Annual General Meeting of Members of NMBZ Holdings Limited will be held
virtually on Wednesday, 12 May 2021 at 1530 hours for the following purposes:
ORDINARY BUSINESS
1.
2.
3.
4.
5.
To receive and adopt the Financial Statements for the year ended 31 December 2020, together with the
reports of the Directors and Auditors thereon.
To re-appoint Directors.
In accordance with the Articles of Association, Mr. B. Chikwanha and Ms. J. Maguranyanga retire by
rotation. Being eligible, the Directors offer themselves for re-election.
To approve Directors’ fees for the year ended 31 December 2020.
To approve Messrs. Ernst & Young’s remuneration for the year ended 31 December 2020.
To appoint Ernst & Young as the Company’s Auditors for the year ending 31 December 2021.
SPECIAL BUSINESS
1.
To consider, and if deemed fit, to pass, with or without modification, the resolution set out below:
“That the Company, being duly authorised thereto by Article 10 of its Articles of Association, may
undertake general repurchases by way of open market transactions on the Zimbabwe Stock Exchange
("ZSE") of any of its own ordinary shares in such manner or on such terms as the directors may from
time to time determine provided that:
a.
b.
the maximum number of shares authorised to be acquired is no more than 10% of the Company's
ordinary issued share capital.
for each share, the minimum price shall not be lower than the nominal value of the Company’s
shares and the maximum price that may be paid is 5% above the weighted average market price
for the ordinary shares in the Company as derived from the Zimbabwe Stock Exchange (ZSE)
Daily Price Sheet for the five business days immediately preceding the date on which such ordinary
shares are contracted to be purchased.
c.
the authority in terms of this special resolution shall unless renewed prior to such time, expire on
the first anniversary of this resolution or at the conclusion of the next Annual General Meeting of
the Company, whichever is later, save that the Company, may before such expiry, enter into a
contract or contracts to purchase its ordinary shares which would or might be completed wholly
or partly after the expiry and may purchase its ordinary shares in pursuance of such contract or
contracts.’’
2.
To consider, and if deemed fit, to pass, with or without modification, the resolution set out below:
“That the Company cancels the listing of its ordinary shares (the "Shares") on the premium segment
of the Official List of the Financial Conduct Authority (London) and of trading on the Main Market of the
London Stock Exchange plc (the "LSE") (the "Delisting").”
122
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT NOTICE TO MEMBERS (Cont'd)
3.
To consider and if deemed fit, to pass, with or without modification, the resolution set out below:
“That, subject to Special Resolution 1 and 2 being carried by the requisite majority, the Company be
authorised to purchase the Company’s own ordinary shares from the LSE in the period between the
date of this Notice and the date of Delisting of the Company from the LSE.”
4.
To consider and if deemed fit, to pass, with or without modification, the resolution set out below:
“That the Company be authorised to pay the transaction costs related to the Delisting for the six (6)
shareholders who make up the LSE share register.”
Notes:
1.
Details of the Virtual AGM will be emailed by our transfer secretaries, First Transfer Secretaries
(Pvt) Ltd through email to shareholders. Shareholders are advised to update their contact
details with the transfer secretaries on the following contacts:
First Transfer Secretaries (Private) Limited
1 Armagh Avenue
Eastlea, Harare
Telephone: +263 242 782869/7
Email: info@fts-net.com
2.
Shareholders are encouraged to pre-register on the online portal that will be provided by
the transfer secretaries and submit their proxy forms at least 48 hours before the meeting.
In order to ensure full consultations and shareholders participation, all queries/questions
must be submitted to the Company and/or transfer secretaries at least 48 hours before the
meeting. All the submitted questions will be read out and answered during the meeting by the
Chairman and the Directors.
3.
A member of the company entitled to attend and vote at this meeting is entitled to appoint a
proxy to attend, speak and on a poll, vote in his/her stead. A proxy need not be a member of
the company. Proxy forms should be submitted at least 48 hours before the commencement
of the meeting.
4.
A Special Resolution is required to be passed by a majority of seventy five per cent of those
present and voting (including proxy votes), representing not less than twenty five per cent of
the total number of votes in the Company.
5.
Please be advised that the 2020 Annual Report can be accessed on the company’s website:
www.nmbz.co.zw. Electronic copies of the 2020 Annual Report (which includes the financial
statements, Directors’ and Auditors’ Report) shall be emailed to those shareholders whose
email addresses are on record.
By Order of the Board
MISS. S. I. PASHAPA
COMPANY SECRETARY
10 March 2021
123
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT EXPLANATIONS REGARDING THE NOTICE OF THE ANNUAL GENERAL MEETING
EXPLANATIONS REGARDING THE NOTICE OF THE ANNUAL GENERAL MEETING
Resolution 1
The Directors of the Company are obliged to present their Report and Accounts to shareholders of the Company
at an Annual General meeting. This is a standard form of resolution common to all Annual General Meetings
Resolution 2
The Company’s Articles of Association require one third of the Directors to stand down at each Annual General
Meeting and if they are eligible, they may offer themselves for re-election. The Directors standing down are
Mr. B.A. Chikwanha and Ms. J. Maguranyanga. Both retiring Directors, being eligible, offer themselves for re-
election. Each Director shall be appointed by a separate resolution. Information about these Directors is shown
below:
Benedict Amon Chikwanha – Independent Non-Executive Director (Chairman)
Mr. Chikwanha was appointed as a non-executive director of NMB Bank Limited and NMBZ Holdings Limited
on 31 January 2014. Mr. Chikwanha is an experienced banker, with over forty years working experience in the
banking sector, 32 of which were spent at Barclays Zimbabwe. Ben Chikwanha has held various positions in Risk
Management, Retail Banking, Human Resources, Corporate Banking and Corporate Finance. Mr. Chikwanha
has held various management roles in the banking sector including being a Director Risk Management and
Managing Director.
Jean Maguranyanga – Independent Non-Executive Director
Jean Maguranyanga is a lawyer by profession with over 20 years’ experience. Jean commenced her career as
a Prosecutor in the Ministry of Justice Legal and Parliamentary affairs and moved after one year to Parliament.
She worked as a Legal Advisor at the Parliament of Zimbabwe for three years after which she left to study for her
Master’s Degree in Corporate and Commercial Law. Following the completion of her Master’s degree Jean took
up a lectureship post with the University of Zimbabwe a position she held for two years. Thereafter, Jean joined
the Reserve Bank of Zimbabwe where she served as Legal Counsel and later as Division Chief Corporate Affairs
/ Bank Secretary for a total period of seventeen years. Currently Jean is a partner at Chinamasa Mudimu and
Maguranyanga Legal Practitioners.
Resolution 3
Shareholders are requested to approve Director’s fees. The Directors’ fees for 2020 amounted to $3,520,400.
Resolution 4
The Remuneration of the auditors is required to be fixed by the Company in a General meeting in terms of section
191 (6) of the Companies and Business Entities Act [Chapter 24:31]. Accordingly, Members will be requested to
approve the remuneration paid to the external auditors - Messrs. Ernst & Young for the year ended 31 December
2020, which audit fee has been disclosed in the Annual Report.
124
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT EXPLANATIONS REGARDING THE NOTICE OF THE ANNUAL GENERAL MEETING (Cont'd)
Resolution 5
All public companies are required to appoint Auditors at each Annual General Meeting at which Financial
Statements are presented, to hold office until the next such meeting in terms of section 191 (2) of the Companies
and Business Entities Act [Chapter 24:31]. This resolution therefore proposes the appointment of auditors
in accordance with usual practice and the Banking Act [Chapter 24:20]. Ernst & Young have served as the
Company’s Auditors for four years. Being eligible for re-appointment, the directors propose their appointment as
the Company’s auditors for the year ending 31 December 2021.
Special Resolution 1
The directors are seeking authority to allow the use of the Company's available cash resources to purchase
its own shares in the market in terms of the Companies Act and the regulations of the ZSE. The directors will
only exercise the authority if they believe that to do so would be in the best interests of shareholders generally.
In exercising this authority, the directors will duly take into account following such repurchase for the next 12
months, the ability of the Company to pay its debts in the ordinary course of business, the maintenance of an
excess of assets over liabilities, and for the Company and Group, the adequacy of ordinary capital and reserves
as well as working capital.
Special Resolution 2
The directors have deemed it necessary that the Company delists from the London Stock Exchange (“LSE”).
This is because only a small amount of trading in the Shares is conducted on the LSE; taking into account
these low trading volumes and the ongoing regulatory compliance and administrative costs the Company
incurs annually as a result of its London listing, the Board determined that there is no significant benefit to the
Company in maintaining the listing. The Company does not believe that the Cancellation will adversely affect its
shareholders, since the Company’s common shares will continue to be listed on the Zimbabwe Stock Exchange
(the “ZSE”) and will continue to be tradeable. Given that the Company has its primary listing and main trading
platform on the ZSE, the continued listing on the LSE would not afford the Company a significant advantage in
terms of liquidity or additional sources of funding compared to the ongoing costs of maintaining the listing.
Special Resolution 3
The LSE register consists of 6 shareholders with a total holding of 198,443 shares. The purchase of those
shares by the Company in line with Special Resolution 1 will not exceed the authority granted to the directors.
Special Resolution 4
The LSE does not levy a charge for delisting, however there may be agency fees related to the delisting of the
shares. The costs will be minimal given the small number of shares in question.
125
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT SHAREHOLDERS’ ANALYSIS
Size of shareholding
2020 Number of
shareholders
% of Holders
2020 Issued Shares
% Shareholding
0 – 10,000
10,001 - 50,000
50,001 - 100,000
100,001 - 500,000
500,001 - 1,000,000
1,000,001 - 10,000,000
10,000,001 and above
Total
3,680
129
42
46
14
22
9
3,942
93.35 %
3.27%
1.07%
1.17%
0.36%
0.56%
0.23%
100%
2,889,490
2,992,552
3,034,802
11,358,890
9,950,114
69,426,640
304,519,201
404,171,689
0.71 %
0.74%
0.75%
2.81%
2.46%
17.18%
75.34%
100%
Size of shareholding
2019 Number of
shareholders
% of Holders
2019 Issued Shares
% Shareholding
0 – 10,000
10,001 - 50,000
50,001 - 100,000
100,001 - 500,000
500,001 - 1,000,000
1,000,001 - 10,000,000
10,000,001 and above
Total
3,656
127
42
45
13
25
8
3,916
93.36 %
3.24%
1.07%
1.15%
0.33%
0.64%
0.20%
100%
2,974,316
3,257,517
3,093,500
11,248,580
10,155,675
87,936,100
285,506,001
404,171,689
0.74 %
0.81%
0.77%
2.78%
2.51%
21.76 %
70.64 %
100%
126
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT SHAREHOLDERS’ ANALYSIS (Cont'd)
2020
Industry
Banks
CO
Employee
Estate Late
External Companies
Fund Managers
Insurance Companies
Investment Trusts And
Property
Local Resident
Nominees Local
Non Residents
Non Resident Individual
Other Corporate Holdings
Pension Fund
Total
2019
Industry
Banks
CO
Employee
Estate Late
External Companies
Fund Managers
Insurance Companies
Investment Trusts And
Property
Local Resident
Nominees Local
Non Residents
Non Resident Individual
Other Corporate Holdings
Pension Fund
Total
Shareholders
% of shareholders
2
310
239
3
7
3
10
33
0.05%
7.86%
6.06%
0.08%
0.18%
0.08%
0.25%
0.84%
3,159
80.14%
53
5
39
4
75
3,942
1.34%
0.13%
0.99%
0.10%
1.90 %
100%
Shareholders
% of shareholders
2
313
239
3
7
4
20
34
0.05%
7.99%
6.10%
0.08%
0.18%
0.10%
0.51%
0.87%
3,129
79.90%
43
5
42
4
71
3,916
1.10%
0.13%
1.07%
0.10%
1.81%
100%
Shares
19,190
61,188,517
742,143
2,229
110,029,366
2,510
42,769,956
34,127,245
14,873,679
2,901,481
112,135,058
1,624,716
5,069
23,750,530
404,171,689
Shares
19,190
50,249,241
738,310
2,229
106,866,466
18,951
64,665,221
34,393,534
9,061,883
276,689
112,097,762
1,795,226
5,069
23,981,918
404,171,689
% of Shares
0.00%
15.14%
0.18%
0.00%
27.22%
0.00%
10.58%
8.44%
3.68%
0.72%
27.74%
0.40%
0.00%
5.88%
100%
% of Shares
0.00%
12.43%
0.18%
0.00%
26.44%
0.00%
16.00%
8.51%
2.24%
0.07%
27.74%
0.44%
0.00%
5.93%
100%
127
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT SHAREHOLDERS’ ANALYSIS (Cont'd)
Rank
Shareholder
2020 Number of Shares
% Shareholding
1
2
3
4
5
6
7
8
9
10
African Century Financial
Investments Ltd Nnr,
Arise B V
Old Mutual Life Assurance
Company Of Zimbabwe
Limited
Africinvest Financial Sector
Holding,
Lalibela Limited-Nnr,
Alsace Trust
Cornerstone Trust
Omzil Stra Shareholder Trap
Fund
Drakmore Investments (Pri-
vate) Limited
Martcap Investments (Private)
Limited
76,426,874
71,632,001
40,864,553
36,702,487
23,104,516
16,885,381
16,875,582
11,065,095
10,962,712
7,728,231
18.91%
17.72%
10.11%
9.08%
5.72%
4.18%
4.18%
2.74%
2.71%
1.91%
TOTAL
312,247,432
77.26 %
Rank
Shareholder
2019 Number of Shares
% Shareholding
African Century Financial
Investments Ltd Nnr,
Arise B V
Old Mutual Life Assurance
Company Of Zimbabwe
Limited
Africinvest Financial Sector
Holding,
Lalibela Limited-Nnr,
Alsace Trust
Cornerstone Trust
Omzil Stra Shareholder Trap
Fund
Drakmore Investments (Pri-
vate) Limited
Martcap Investments (Private)
Limited
76,426,874
71,632,001
36,731,115
36,702,487
23,104,516
16,885,381
16,875,582
13,104,565
10,962,712
7,728,231
18.91%
17.72%
9.09%
9.08%
5.72%
4.18%
4.18%
3.24%
2.71%
1.91%
TOTAL
310,153,464
76.74 %
1
2
3
4
5
6
7
8
9
10
128
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT SHAREHOLDERS’ INFORMATION
MEMBERS’ DIARY
Financial year end
Reports:-
31 December 2020
- Announcement of annual results
March 2021
- Annual financial statements posted to shareholders
April 2021
- Annual General Meeting
- Announcement of AGM results
12 May 2021
14 May 2021
- Delisting of NMBZ Holdings from London Stock Exchange
11 June 2021
- Announcement of the 2021 half-year results
August 2021
129
tribe_28NMBZ HOLDINGS LIMITED | ANNUAL REPORT
SECRETARY AND REGISTERED OFFICE
Company Secretary S. I. PASHAPA
Registered Offices
NMB Head Office
19207 Liberation Legacy Way
(formerly Borrowdale Road)
Borrowdale
Harare
Zimbabwe
NMB Centre
Corner George Silundika Avenue/
Leopold Takawira Street
Bulawayo
Zimbabwe
Telephone: +(263) 8688003347
Facsimile +(263) (242) 759648
Website: http://www.nmbz.co.zw
Email: enquiries@nmbz.co.zw
+(263) (2922) 70169
+(263) (2922) 68535
Auditors
Ernst & Young Chartered Accountants (Zimbabwe)
1st floor, Angwa City
Corner Angwa Street / Kwame Nkrumah Avenue
Harare
Zimbabwe
Transfer Secretaries
In Zimbabwe
First Transfer Secretaries
1 Armagh Avenue
Eastlea
Harare
Zimbabwe
Legal Advisors
In Zimbabwe
Gill, Godlonton & Gerrans
7th Floor, Beverley Court
100 Nelson Mandela Avenue
Harare
Zimbabwe
130
In UK
Computershare Investor Services PLC
The Pavilion
Bridgewater Road
Bristol
BS599 6ZZ
United Kingdom
In UK
Dechert LLP
160 Queen Victoria Street
London
EC4V 4QQ
United Kingdom
NMBNMBZ HOLDINGS LIMITED | ANNUAL REPORT