1
NMBZ Holdings Limited
ANNUAL
REPORT
2023
Tribe28ANNUAL REPORT 2023 2
CONTENTS
ABOUT US
OUR HISTORY
PRODUCTS & SERVICES
NMB BANK BRANCHES & AGENCY NETWORK
CHAIRMAN’S STATEMENT
CHIEF EXECUTIVE OFFICER’S STATEMENT
CORPORATE GOVERNANCE STATEMENT
FINANCIAL SUMMARY
INDEPENDENT AUDITOR’S REPORT
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
HISTORICAL FIVE YEAR FINANCIAL SUMMARY
NOTICE TO MEMBERS
1
2
4
5
6
8
10
19
20
26
27
29
31
33
94
97
1
ABOUT US
Who We Are
NMBZ Holdings Limited (NMBZ) is a Zimbabwe based investment
holding company involved in Banking, Microfinance, Real Estate,
Customised Technology Services and Bancassurance. The
holding company is listed on the Zimbabwe Stock Exchange.
Our Vision
• Excellence: Our Excellence is intentional and reflects our
unyielding passion and unfaltering commitment to strive to
provide outstanding products and unsurpassed service that
delivers premium value to our customers.
• Loyal and Dedicated Staff: We value, recognise, celebrate
and reward our teams’ passion and commitment to the
NMB vision.
To be the leading financial services group in our chosen markets.
•
Our Mission
To provide premium financial services to high net worth
individuals and businesses, and uniquely branded technology
enabled products to SMEs and the broader market.
Our Values
• Professionalism: We believe in being accountable to an
exceptional standard of excellence and performance,
exhibiting expertise and flair in our work.
•
Integrity: We are a people defined by integrity, uprightness,
principles, ethics, virtue, decency, fairness, sincerity,
truthfulness and trustworthiness.
Innovation: We strive to understand our customers’ needs,
embrace constant change in our industry, challenge the
status quo, adapt and meet those needs through creativity
and new technology.
• Shareholder Value: When we leverage all our core values
we drive revenue and profit generation.
• Partnerships: Our Employees are partners in building NMB to
be the most respected financial services provider across all
customer segments. We relate to our Customers as partners.
We develop strong relationships based on mutual trust and
respect as we take care of their finances. We actively solicit
their input into our financial solutions, products and services.
SUBSIDIARIES
N M B B A N K L I M I T E D
P R O P ER T I E S
NMB Bank Limited
NMB Properties Limited
XPlug Solutions Limited
NMB Bank Limited is a registered
commercial bank and the principal
subsidiary of NMBZ, established in
October 1992.
NMB Properties Limited is a property
development and services company
established in 2023.
custom made
Xplug Solutions Limited is a provider
technology
of
solutions across
financial
services sector and beyond.
the
Tribe28ANNUAL REPORT 2023
2
OUR HISTORY
Established in October 1992 as the National Merchant Bank of Zimbabwe, NMB Bank Limited is a registered commercial bank and a subsidiary of
NMBZ Holdings. Opening its doors on the 1st of June 1993, NMB Bank was founded by a group of Zimbabwean entrepreneurs who had previously
held senior positions in reputable international financial institutions such as the World Bank and the International Finance Corporation.
1993
National Merchant Bank of Zimbabwe is born with key differentiators being innovation and customer service
excellence differentiating NMB from competitors. Became the largest merchant bank in Zimbabwe within the first 18
months of operating.
1997
The Group had a dual listing on the Zimbabwe Stock Exchange and the London Stock Exchange. In Zimbabwe, shares
were oversubscribed 4.5 times whilst in London the over-subscription was 2.5 times.
2000
The Bank underwent its first domain transition to become a Commercial Bank concentrating on the high-net worth
niche market.
2010
African Century Financial Services Investments, an investment partnership based in the United Kingdom, becomes a
shareholder in the bank holding 19% shareholding.
2013
In 2013 ARISE (Norfund, FMO, Rabobank) became investors into NMBZ Holdings acquiring an 18% stake.
2015
The Bank evolved to capture SME’s and the broader market through digitally enabled platforms.
2020
Transition into a Digital Bank
NMBConnect
NMBConnect Online
*241#
Virtual Branch Services
Self Services Portal
Loan Automation
•
•
•
•
•
•
•
2023
•
•
•
•
Partnered with ZimPost to become the widest agency banking distribution in Zimbabwe accessible across
more than 100 branches.
Launched XPlug Solutions Limited
Launched NMB Properties Limited
Launched NMB Microfinance Division
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OUR AWARDS
DIGITAL INNOVATION AWARD
Banks and Banking Survey
Awards, 2023
OUTSTANDING CONTRIBUTION
TO CHILDREN EDUCATION
SUPPORT & COMMUNITY
EMPOWEREMENT
Zimbabwe National ESG & CSR
Achievement Awards, 2023
OVERALL BEST PERFORMING
2ND RUNNER-UP OVERALL
BANK
BANK OF THE YEAR
Banks and Banking Survey
AMH Banks and Banking Survey
Awards, 2022
Awards, 2019
BEST INNOVATION OF THE YEAR
PEOPLE’S CHOICE AWARD
MAZ
Exceptional Marketing
AMH Banks and Banking Survey
Awards, 2019
Awards, 2018
BEST BANKING CORPORATE
FINANCIAL INSTITUTION OF THE
GOVERNANCE
2018
YEAR
NCC Awards, 2015
BEST BANK SUPPORTING SMES
2014
BEST BANKING CORPORATE
GOVERNANCE
2014
BEST BANK IN ZIMBABWE
Financial Times
Banker Magazine, 2002 & 2001
WON EURO MONEY BEST BANK
IN ZIMBABWE
1999 & 1998
4
PRODUCTS & SERVICES
NMBZ Holdings Limited through its subsidiaries, offers a wide array of products to individuals, companies, non-governmental organisations
and other institutional clients.
Customised Technology Services
• Software Development
• Cybersecurity Services
• Robotic Process Automations
• Training & Consulting
Treasury and International Banking
• Money Market Investments
•
• Exchange control services.
• Offshore trade finance
Letters of Credit
Microfinance
• Working capital loans
• Order Financing
Business Banking
• Overdrafts
• Acceptance Credits
• Short-Term Loans
• Commodity Financing
• Bank Guarantees
• Trade Finance
•
• Project Finance
• Order Finance
• Bill Discounting
• Structured Finance.
Leasing Products
Consumer Banking
• Personal Current Accounts
• Personal Savings Accounts
• Business Current Accounts
• Business Savings Accounts
• Safe Custody
• DSTV payments
• Staff loan schemes
• Equity Release Loans
• MTA Services
Bancassurance
• Home insurance
• Travel Insurance
• Funeral Cover
• Business Insurance
• Buildings Insurance
• Plant, Machinery and Content
Insurance
• Stock Insurance
• Money insurance
• All Risk Insurance
• Business Interruption Insurance
• Accounts Receivable Insurance
• Glass insurance
• Electronic equipment Insurance
• Fidelity Insurance
• Personal Accident Insurance
• Goods in transit Insurance
• Crop Insurance
• Motor Traders Insurance
Real Estate Services
• Valuation Services
•
Land Development
• Property Construction
• Property Management
• Facilities Management
Tribe28ANNUAL REPORT 2023 5
NMB BANK BRANCHES & AGENCY NETWORK
NMB Bank Limited has branches in Harare, Bulawayo, Masvingo, Kwekwe, Mutare, Gweru, Bindura, Chitungwiza, Victoria Falls and Chinhoyi. The
Bank’s branch 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 (formerly known as Borrowdale Road), 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 Borrowdale Road, Borrowdale, Harare
Joina City - Shop 105A, First floor, Joina City Corner Jason Moyo / Innez Terrace, Harare
Kwekwe - Shop 5 First Mutual Centre, Robert Mugabe way, Kwekwe
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
Victoria Falls - 1865 Sawanga Shopping Mall, Victoria Falls
The Bank’s Automated Teller Machine (ATM) network, covers the following locations:
- Avondale - Harare
- Borrowdale - Harare
- Bulawayo
- Card Centre - Harare
- Chinhoyi
- Eastgate - Harare
- Kwekwe
- Gweru
- Joina City - Harare
- Masvingo
- Msasa - Harare
- Mutare
- Southerton – Harare
- Victoria Falls
At the beginning of 2023, the Bank entered into an agency relationship with Zimpost where customers can access selected services across
over 100 branches countrywide.
NMB Bank Branches
FMC Finance Branches
ZIMPOST Branches
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CHAIRMAN’S STATEMENT
INTRODUCTION
The year 2023 saw the country hold its harmonized elections in August. There was also a number of significant policy changes as the authorities
pushed to stabilise the local currency. The multi-currency regime was extended by another five years to 2030. During the period under review,
the economy recorded positive growth with export earnings increasing by 10% to USD 7.2 billion. Month-on-month blended inflation closed the
year at 4.7% compared to 0.1% in January 2023. On the commodities market, prices of selected minerals notably the platinum group of metals
(PGMs) and diamonds plummeted resulting in export receipts declining by 9% as of Q3 2023 on account of global uncertainty and reduced
aggregate demand. The Group however continued to pursue its growth strategy despite the challenges within the operating environment.
Local Operating Environment
The year 2023 commenced with the review of the interest rates by the monetary authorities aimed at aligning positive inflation developments
to consolidate and sustain price stability and resilience of the domestic economy. The bank policy rate was reduced from 200% to 130% to align
with the inflation outlook. Lending to the productive sectors including individuals was also reviewed from 100% to 70% per annum. However, in
June 2023, month-on-month blended inflation peaked to a high of 74.5% compared to 0.1% in January largely on account of a huge preference
for United States dollars, an increase in money supply growth and market indiscipline. In response to the adverse movements in the exchange
rate and inflation, the authorities announced a cocktail of measures namely scrapping of import duty on basic commodities, removal of the
15% foreign currency surrender requirement on domestic sales, interest review to curb speculative borrowing and the foreign auction market
fine-tuning. Despite the signs of resilience and recovery, the economy remained vulnerable to exchange rate pressures due to the softening
of commodity prices.
Global Economic Developments
The global economy is forecasted to further recover from the impact of the COVID-19 pandemic, uncertainty, and low aggregate demand.
However, the tightening of financial conditions in response to high levels of inflation and high debt overhang in many economies is likely to
slow down global growth prospects to 2.7% in 2024.
Economic Outlook
The operating environment is likely to remain challenging on account of exchange rate volatility, high inflation and the El Nino-induced effects
as well as softening commodity prices. Notwithstanding these challenges, the economy is expected to record growth in accommodation
services, diaspora remittances and construction sectors.
Group Results
Financial Performance
Operating income increased from ZWL 201.5 billion to ZWL 613.3 billion for the year ended 31 December 2023. This was largely driven by a
significant increase in fees and commission income which increased from ZWL 73.7 billion in 2022 to ZWL 228.9 billion in 2023.
The Group achieved profit after tax amounting to ZWL 275.6 billion compared to ZWL 57.7 billion for the previous year representing a growth of
378%. Basic earnings per share amounted to ZWL 67 073 cents (Dec 2022 – ZWL 14 484 cents).
The macro economic challenges led to a significant increase in operating costs from ZWL 91.3 billion to ZWL 216.8 billion which was largely
in response to the deteriorating exchange rate and inflation pressures. The Group continues to exploit its strength in the digitization and
automation area to find ways of providing service in a cost effective manner.
Financial Position
The impact of inflation and exchange rate deterioration on the foreign exchange based assets saw a significant increase in assets in ZWL
terms, closing the year at ZWL 1.50 trillion when compared to ZWL 650.1 billion for the previous period. The banking subsidiary accessed a line of
credit from Trade and Development Bank (TDB) in 2023 which contributed to the increase in borrowings from ZWL 102 billion to ZWL 263.3 billion.
Loans and advances stood at ZWL 494.5 billion as at 31 December 2023, growing by 122.3% on the back of credit line drawdowns. The NPL ratio
stood at 1.11% reflecting the banking subsidiary’s prudent lending processes.
The Bank maintained a sound liquidity position throughout the year and was consistently above the statutory minimum of 30%.
Capital and leverage
The capital adequacy ratio of the banking subsidiary remained strong at 35% compared to a regulatory minimum of 12%. The banking subsidiary
was adequately capitalised to cover all risks and was compliant with the minimum capital requirement of USD 30 million.
Subsequent to year end, the Group received approval for a USD 15 million guarantee facility from the African Development Bank. This facility
will assist our clients who need international trade financing.
SUSTAINABILITY
NMBZ Holdings considers sustainability as a core element of its business strategy. In the year under review, we consolidated our sustainability
practices and strengthened our reporting capabilities. The Board undertook deliberate actions to provide guidance on the emerging
sustainability issues.
We embarked on a company-wide Environmental, Social and Governance (ESG) training and capacity building programme aimed at
equipping all employees on the implementation of ESG in line with International Finance Corporation Performance Standards (IFC PS). A total
of 338 members of staff were trained on ESG. The Board and Executive management also participated in the training. Further, our Board and
Executive Management received training under the Oxford Leading Sustainable Corporations (OLSC) initiative.
Our people remain a priority in all activities that we undertake. In the year 2023, we continued to provide fair remuneration, medical support
through a medical aid scheme and other measures aimed at motivating our staff. Our renewed focus on wellness transcends beyond the
mere absence of injury and disease, but is inclusive of all elements of human well-being including the facet of mental health.
Looking ahead, the Board is committed to mainstreaming ESG in all aspects of the Group’s operations and continually improving sustainability
practices. We shall continue to prioritise compliance and meeting regulatory requirements in addition to stakeholder requirements. We will
continue to uphold ethics and governance at all levels of the organisation.
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DIVIDEND
An interim dividend of ZWL 556 cents a share was declared as at 30 June 2023 and paid out subsequent to that date. As at the end of the year,
the Group declared a final dividend of ZWL 4 101 cents per share on 20 March 2024. In light of the current macroeconomic environment this
dividend will be paid in United States Dollars as USD 0.21 cents per share. A detailed notice to shareholders was issued on 3 April 2024.
DIRECTORATE
Mr. Ben Chikwanha retired as at 31 December 2023 and I took over from him as Chairman while Mrs. Emilia Chisango was appointed deputy
Chairperson of the Board. We thank Mr. Chikwanha for his sterling leadership of the Board since 2013 and wish him well in his future endeavours.
I look forward to a fruitful and successful tenure as Board Chairman for NMBZ Holdings Limited.
OUTLOOK
The Group will focus on disciplined execution of its strategy which is anchored on broadening the Group structure and diversifying sources
of income. The Group will leverage on technology to deliver robust digital platforms and effectively deliver convenient financial solutions to
its customers. Raising of credit lines remains a key focus area as we continue to fund export oriented productive sectors of the economy as
part of our drive to support the growth of the Zimbabwean economy. The Group is considering the acquisition of a complementary business
and processes are underway. Stakeholders will be updated on the progress of this strategic initiative which if concluded, may have a material
effect on the company’s securities.
APPRECIATION
On behalf of the Board, I wish to thank our valued clients, funding partners, shareholders, regulatory authorities and other key stakeholders for
their continued support. My gratitude also goes to my fellow board members, management and staff for their continued diligence, dedication
and resilience in the face of a challenging operating environment.
MR. P. GOWERO
CHAIRMAN
20 March 2024
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CHIEF EXECUTIVE OFFICER’S STATEMENT
INTRODUCTION
In the year 2023, the Group’s diversification thrust gathered momentum as we setup new verticals and strengthened the banking business.
The Group established two new subsidiaries, namely NMB Properties Limited, a property company and XPlug Solutions Limited, a technology
company during the year under review. The Banking subsidiary, on the other side diversified its revenue by setting up a MicroFinance Division.
We intensified our focus on the core banking business and support for the productive sectors of the economy. We accessed two additional
lines of credit to complement our support to the productive sector of the economy. Riding on our robust digital platforms, we managed to offer
seamless transacting capabilities to our customers which is further supported by our Agency Network. Over 91% of accounts are now being
opened via our Digital Platforms with no human intervention.
The other strategic focus areas in 2023 included digitalisation, partnerships, sustainability, value chain, customer experience and shareholder
value.
On the macro-economic front, the year started off well with stable interest rates until about April when some turbulence started to set in.
Towards the end of the half year period, the exchange rate deteriorated rapidly, breaching the ZWL 7,000 mark to the USD. However, timely
interventions by the authorities including tightening money supply saw the exchange rate retreating to levels below ZWL 5,000 and remaining
relatively stable until the end of the year. According to the World Bank, economic growth is projected to slow down to 2.7% in 2024, a decrease
from 4.5% in 2023 due to depressed global growth and low agricultural output as a result of the predicted erratic and below-average rainfall
caused by the El Niño weather pattern.
PERFORMANCE REVIEW
The Group achieved total comprehensive income of ZWL 327.6 billion, which was a 444% increase compared to ZWL 60.3 billion for the previous
year. Fees and commission income grew by 210% and was largely earned through our various digital platforms. Cost to income ratio was
35%, down from 45% the previous period. The deterioration in the exchange rate as well as inflationary pressures continue to push the cost of
doing business upwards and we continue to mitigate this through continued focus on digitalisation, automation of processes and improved
efficiencies.
Given the macroeconomic environment, the Group continued to forge ahead with value preservation strategies and focus on hard currency
income streams.
BUSINESS REVIEW
NMB BANK LIMITED
The banking subsidiary continued to make inroads into new markets and cementing relationships with existing clients through the following
main business units:
Digital Banking
The Bank continues to pursue a digital bank model with digitalisation of both front-end and back-end processes. The digital banking platforms
now account for the bulk of the bank’s non-funded income. We progressed well in building the foundation for a strong digital ecosystem, an
activity which will remain a focus area for the foreseeable future. In the year 2023, ZWL 1.3 trillion worth of transactions were realised on our
mobile banking platform compared to ZWL 19.9 billion in the previous year. Internet banking and card transactions achieved similar growth
in values. We on-boarded and integrated 7 new billers in 2023, bringing the total number of billers to 14. These are for service providers from
Telecommunications, Councils, Universities, Financial Brokers to Medical Aid sectors.
Consumer Banking
The Bank continues to make strides in providing unparalleled convenience to customers through our virtual banking platform. In 2023 we
expanded the platform to include DSTV payments. Through the Consumer Banking and Value-Added Services (CBVAS) department, the Bank
continues to focus on delighting and serving customers by providing simple, convenient and affordable banking, insurance, remittances and
payments services. CBVAS also utilises the digital banking services offered through the use of our USSD (*241#) and NMBConnect platform.
CBVAS contributed income amounting to ZWL 137.5 billion for the year ended 31 December 2023.
Geographical Representation
During the year under review, we increased our geographical representation through partnerships under Agency Banking. The Agency
Banking services ride on our digital banking platforms and we offer the same customer experiences through 136 agents across the country.
Through these partnerships, we have physical touch points in all the 10 provinces of the country, bringing us close to our customers. In
November 2023, we re-established presence in the resort town of Victoria Falls, as we reopened our branch. This brought the total number
of branches to 14 and these also act as hubs in support of our agency network.
Business Banking
Despite the highs and lows in the macroeconomic environment, our Business Banking division remained a reliable partner to businesses. The
Bank focused on enhancing its financial intermediation role as we secured medium to long-term funding for key sectors of the economy
through offshore lines of credit. The Bank partnered with Rabobank, one of the world’s leading Food & Agriculture Bank on a three-year Food
and Agriculture support program. This should assist NMB Bank grow the Agribusiness Unit as we contribute significantly to this key economic
sector. Furthermore, NMB Bank partnered with the Government of Zimbabwe through the National Enhanced Agriculture Productivity Scheme
(NEAPS) and financed 7,100 hectares of maize and soya beans in the 2023 summer cropping season through primary producers, agro-
dealers and seed houses. Loan book quality remains strong on the back of proactive monitoring and maintaining of close relationships with
all customers.
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9
XPLUG SOLUTIONS LIMITED
The subsidiary was officially launched in July 2023. It was established from the Bank’s ICT department under which a number of digital banking
solutions and operational efficiency systems were developed for NMB Bank Limited. The company now has a full product suite encompassing
transacting platforms, (mobile and internet banking solutions) as well as operational efficiency systems (Robotic Process Automation and
Workflow Solutions). XPlug Solution is positioning itself to be a preferred partner on the current digitalisation drive within Africa as companies
embrace technology to improve efficiencies and reallocate resources towards increased productivity. The technology company has received
a number of mandates from local and regional institutions in banking as well as insurance sectors. The company is set to increase its
contribution to group performance in 2024.
NMB PROPERTIES LIMITED
Established in May 2023, NMB Properties Limited has been mainly focused on projects within the investment property portfolio of NMB Bank
Limited. This is over and above the 26 cluster housing project at Reoville Homes which the company completed in 2023. NMB Properties,
working with a number of partners has a project pipeline for 2024 that includes cluster housing developments, residential stands and a
shopping centre. The establishment of NMB Properties has positioned the Group for sustained growth in the real estate sector.
STRATEGIC PRIORITIES
The Group is pursuing a growth strategy and group diversification remains a focus area as we pursue new markets. The Group is set to
leverage on technology to drive business growth and offer unique customer experience across all its subsidiaries. The Bank made a strategic
decision to change its Core Banking System (CBS) in 2023. This is in line with our focus on providing seamless services to our clients in a cost
effective and efficient manner. We expect to go live on the new CBS at the beginning of the second quarter of 2024. The environment which the
Group is operating in necessitates that it prioritises value preservation. NMB Properties Limited will be a key anchor in this strategic priority. The
banking division is also pursuing foreign currency revenue generation opportunities in line with the market dynamics. XPlug Solutions Limited
on the other side is establishing a regional clientele base and will be a key foreign currency contributor to the Group.
CORPORATE SOCIAL INVESTMENTS AND SUSTAINABILITY
Our Corporate Social Investment (CSI) continued to soar high as we played our part for the betterment of our society. We assisted a number
of stakeholders such as Kuchengetana Trust, Society for the Destitute Aged (SODA), Horticultural Development Council (HDC) Investment
Forum and Friends of Dzikwa Trust. The Bank supported societal causes such as cleft lip surgery, breast cancer awareness, blood donations
and National Tree Planting Day. With our business growth, we are taking up more responsibility and contributing to different societal groups.
OUTLOOK
The operating environment is expected to remain challenging but also with some pockets of growth opportunities. Running an efficient and
cost effective business will be key in this environment and agility to move and close in on the opportunities remains key. The Group has
capabilities to take advantage of the opportunities presented by the environment and manage the related risks. The Bank was successful in
raising lines of credit in the previous year and we are looking forward to accessing more funding. The Group diversification drive will gather
momentum in the coming year as we fully operationalize the new subsidiaries.
APPRECIATION
I thank the NMBZ Holdings team, board and shareholders for their immense support during 2023. I am sincerely grateful to our valued clients,
funding partners, shareholders, stakeholders and regulatory authorities for their various contributions in our pursuit of delivering on our vision.
MR. G. GORE
CHIEF EXECUTIVE OFFICER
20 March 2024
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CORPORATE GOVERNANCE STATEMENT
We have pleasure in presenting to shareholders our report and the audited financial statements of the Group for the year ended 31 December
2023.
1. SHARE CAPITAL
The authorised and issued share capital of the Company are as follows:-
• Authorised: 600 000 000 ordinary shares of ZWL0,00028 each.
• Issued and fully paid: 435 126 312 ordinary shares of ZWL0,00028 each. 43 720 share options were exercised during the year.
2. GROUP ACTIVITIES AND RESULTS
The Group’s total comprehensive income was ZWL 328 billion for the year ended 31 December 2023 (2022 – ZWL 60 billion).
3. CAPITAL ADEQUACY
As at 31 December 2023, the Bank’s regulatory capital adequacy ratio was 37.25% (Historical – 35.39%) (2022 – 25.86% in inflation adjusted
terms).
4. DIRECTORATE
Board of Directors
As at 31 December 2023, the following were the Directors of the Company.
Mr. P. Gowero
Mr. G.Gore*
Mrs. M. Chipunza*
Mr. J. de la Fargue
Ms. C. Glover
Mr. J. Tichelaar
Ms. J. Maguranyanga
Mr. G. Taputaira
Mrs. E. Chisango
Mr. D. Matenga
* Executive
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
Independent Non-Executive Director
Independent Non-Executive Director
•
In accordance with Article 83 of the Company’s Articles of Association, one third of the Directors will retire by rotation at the forthcoming
Annual General Meeting (AGM). Messrs J. Maguranyanga, and J. de la Fargue retire by rotation. The retiring Directors, being eligible, offer
themselves for re-election.
• Mr P. Gowero retires in terms of Article 91.2 of the Company’s Articles of Association having been appointed during the course of the year.
Being eligible, he offers himself for re-election.
Tribe28ANNUAL REPORT 2023 11
Directors’ Interests
As at 31 December 2023, 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:-
Mr. P. Gowero
Ms. J. Maguranyanga
Mr. G. Gore
Mrs. M. Chipunza
Mr. J. de la Fargue*
Ms. C. Glover*
Mr. J. Tichelaar*
Ms. J. Maguranyanga
Mr. G. Taputaira
Mrs. E. Chisango
Mr. D. Matenga
31/12/2023
Shares
31/12/2022
Shares
-
600
5 577
-
-
-
-
-
-
600
5 415
-
-
-
-
-
4 586
4 540
-
-
-
-
10 763
10 555
*Mr. J. de la Fargue represents African Century Financial Investments Limited which holds (84,767,523 shares), Ms. C. Glover represents Arise
which holds (79,449,374 shares) and Mr J. Tichelaar represents AfricInvest which holds (40,707,918 shares) in NMBZ Holdings Limited.
5. CORPORATE GOVERNANCE APPROACH
The Board of NMBZ Holdings Limited continues to align its internal governance practices to local and international best practice including
the National Code of Corporate Governance in Zimbabwe (ZIMCODE) and the King IV Report. The Board has adopted the National Code of
Corporate Governance in Zimbabwe as its primary code of governance. The Board is committed to the principles of accountability, integrity,
transparency, sound ethical practices and professionalism. As such the Board continues to actively work towards balancing the interests of
all its stakeholders, including its shareholders, customers, employees, regulators, suppliers and the communities in which we work in.
Our management approach remains that of ensuring prudence, compliance with international best practice and sustainability are key
considerations for management as they work to deliver value to our shareholders and all other stakeholders.
5.1. Stakeholder Communication
The Board of Directors and Executive Management of the Group communicate with the Company’s stakeholders through various platforms
including the Annual General Meeting, press announcements of interim and final results as well as of key developments within to shareholders,
investor and analyst briefings were possible and Annual Reports. Through online platforms including the Company website, the Group
disseminatesfinancial and operational information to its stakeholders.
5.2.
Share Dealings
The Company has a share dealing policy which precludes directors and staff from dealing in the shares of the Company, whether directly or
indirectly, during the closed period being the period one month before the half year or financial year end up to the publication of the half year
or full year financial year end results. Directors and staff are also precluded from dealing in the shares of the Company whenever they are
aware of negotiations, discussions or information which may have a bearing on the share price. In line with the ZSE Listing rules, share dealings
by Directors and Executive / Senior Management are declared to the Zimbabwe Stock Exchange.
5.3. Declarations of Interest
All Directors are required to declare any actual, potential or perceived conflict of interest that may compromise their judgment, decision or
actions. Declaration of interests is a standing agenda item at all board meetings. It is also a requirement of the Banking Act that Directors
complete and file with the Company a Declaration of Interest form. During the year under review all Directors submitted their Conflict of
Interest Declaration forms in line with the Banking Act. Directors shareholding interests in NMBZ Holdings Limited are disclosed in the Report of
Directors on page 7.
5.4. Directors’ Remuneration
The remuneration packages for Executive Directors are determined by the Human Resources, Remuneration & Nominations Committee. The
salary packages primarily consist of a basic salary, performance based bonus and share options which are meant to be a retention mechanism.
The remuneration of Non-Executive Directors is subject to the approval of shareholders. The non-executive directors’ remuneration for the
year under review will be presented to the shareholders for their approval.
5.5. Governance Framework
The board has developed a Corporate Governance Manual which forms the backbone of the group’s governance structures. The manual
provides the guidance for promoting the very highest standards of corporate governance within the group. It sets out our practices for
implementing the corporate governance provisions required by law, regulation and best practice. As part of its corporate governance
structures, the group has board committees including the Audit, Risk Management & Compliance, Credit, Loans Review, Asset & Liability,
Information Technology and Human Capital, Remuneration & Nominations Committees, which are standing committees that assist the board
in the discharge of its duties. The board also has a Board Charter details of which are discussed below. The Corporate Governance Manual also
Tribe28ANNUAL REPORT 2023 12
clearly defines the roles andresponsibilities of the Board Chairman, the Board of Directors and those of the Chief Executive Officer, creating a
balance of power and authority and ensuring that no one individual or group of individuals has unfettered decision making powers.
5.6.
The Board’s role
The Board is responsible to all its stakeholders for creating and delivering sustainable value through the management of the group’s business.
It is responsible for determining the strategic direction of the group and for approving the relevant policies to deliver such long-term value.
The board provides overall strategic direction within a framework of rewards, incentives and controls. The Board ensures that management
strikes an appropriate balance between promoting long-term growth and delivering short-term objectives. The Board demonstrates ethical
leadership and promotes the company’s collective vision of the company’s purpose, values, culture and behaviours. The Directors lead by
example and ensure that good standards of behaviour permeate throughout all levels of the group.
5.7.
The Board’s Key focus areas
The Board meets quarterly to monitor the performance of the group and its management as well as to discuss the strategic direction of the
group. The Board retains the responsibility to ensure good governance practices are applied throughout the group. It retains some matters
for its determination and has delegated specific responsibilities to Board Committees which operate within well-defined terms of reference
as summarised below.
The Board of Directors is responsible for setting the strategic direction of the Company. Further, the Board is responsible for proactively
engaging with the Company’s Executive Management to test, challenge, improve and monitor the implementation of the Company’s strategy,
to oversee the performance of Executive Management, to provide challenge, counsel and support to Executive Management, to receive reports
from Executive Management on the performance of the Company and to provide challenge to action taken by Executive Management. The
board is also responsible for the implementation of enterprise risk management through ensuring the implementation of adequate controls,
processes and policies which enable risk to be appropriately identified and managed.
6. BOARD STRUCTURE
*NMBZ HOLDINGS LIMITED
NMB BANK LIMITED BOARD
AUDIT COMMITTEE
LOANS REVIEW COMMITTEE
CREDIT COMMITTEE
CHIEF EXECUTIVE OFFICER
ASSET AND LIABILITY
MANAGEMENT (ALCO) ,
FINANCE & STRATEGY
COMMITTEE
RISK & COMPLIANCE
COMMITTEE
HUMAN CAPITAL
REMUNERATION & NOMINATIONS
COMMITTEE
ICT & DIGITAL BANKING
EXECUTIVE COMMITTEE
*The Group set up two subsidiaries during the year 2023, NMB Properties Limited and XPlug Solutions Limited. It obtained regulatory approval
to have one Board for the entities as they stabilise their operations.
The Group is currently governed by a board made up of 10 board members and seven standing board committees, whose terms of reference
are well defined and are reviewed at least once each year.
Directorship
Gender Distribution
20%
30%
50%
60%
40%
Independent
Non-Executive
Executive
Male
Female
Diversity
The NMBZ Holdings Board endeavors to maintain an appropriate balance of diversity in terms of race, gender, age, geographical location,
educational knowledge, skills and experience to ensure robust input, governance and decision making. The NMBZ Holdings board is diverse
being comprised of five independent non-executive directors, three non-executive directors and two executive directors. Female directors
make up 40% of the Board. The board is chaired by an independent non-executive director. The directors’ ages range from 41 to 71 years of
Tribe28ANNUAL REPORT 2023 13
age. Three of the directors are based outside Zimbabwe while seven of the directors are locally based. The directors’ educational background,
skills and experience include banking, law, accounting, information technology, risk management, marketing, corporate finance, real estate
and project management among other areas. It is the Board’s view that the board size and the skills mix is appropriate for the size and nature
of business the Company is involved in.
There were no changes at executive management level during the course of the year under review. The then Board Chairman Mr B. A.
Chikwanha retired with effect from 31 December 2023, having served ten years on the board. He was succeeded by Mr. P. Gowero following the
implementation of the Board Chairperson Succession Plan. The Board Chairman is deputised by Mrs. E. Chisango.
Board Chairman
The Board Chairman provides leadership to the Board and manages the business of the Board through setting its agenda and taking full
account of issues and concerns of the Board. He actively works to establish and develop an effective working relationship with the Chief
Executive Officer and Executive directors and to drive improvements in the performance of the Board and its committees through feedback
derived from the annual board evaluation process which is communicated to directors and is used to develop an action plan to improve
board performance. The Chairman’s other roles include to assist in the identification and recruitment of talent to the Board and to proactively
manage regulatory relationships in conjunction with Executive Management where appropriate.
Deputy Board Chairperson
In the absence of the Board Chairman, the Deputy Board Chairperson performs the role of the Board Chair as detailed above.
Chief Executive Officer
The Chief Executive Officer is responsible for providing strategic and operational leadership in all areas of the Company. His responsibilities
include but are not limited to driving the transformation agenda of the group to reach its strategic aspirations, providing credible and agile
leadership to the Executive and Senior Management team, setting long term and short-term business goals and holding individual executive
and senior management team members to account. The Chief Executive officer is also responsible for ensuring high employee engagement
levels and a culture which enables customer focus and optimum performance, ensuring delivery of effective people processes including
talent management, succession planning, performance management and reward, ensuring that the Board is fully informed on all relevant
matters, ensuring the Group maintains good relationships with regulatory and government agencies and effective relationships with its
customers and ensuring that the Group maintains sound and adequate risk management structures and adequate internal controls and is
compliant with all relevant regulator and internal compliance requirements.
Board Charter
The Board Charter sets out the roles and responsibilities of the Board, its scope of authority, and the structures through which the Board
operates. The Board Charter is reviewed on an annual basis to ensure that the Board remains aligned to its requirements and to allow
Directors an opportunity to refresh their memories on its provisions. The Board is responsible for providing entrepreneurial leadership, to set
strategy, to ensure that human and financial resources are available to achieve set objectives, to review management performance, to set
the company’s values and standards and to ensure that obligations to shareholders and other stakeholders are understood and met. The
Board Charter clearly defines the role of the Board Chairman which is separate and distinct from that of the Chief Executive Officer as well as
the responsibilities of Directors.
Board Committees
Committee
Audit Committee
Members
E. Chisango (Chairperson)
J. Maguranyanga
G. Taputaira
ALCO & Finance
D. Matenga (Chairperson)
J. de la Fargue
C. Glover
J. Tichelaar
E. Chisango
P. Gowero
G. Gore
M. Chipunza
Summary Roles & Responsibilities
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. The
Committee is responsible for the selection, compensation,
and performance review 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. 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.
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. 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.
Tribe28ANNUAL REPORT 2023 14
Committee
Loans Review
Human Capital, Remuneration & Nominations Committee
Risk & Compliance
Committee
ICT & Digital Banking
Committee
Members
Summary Roles & Responsibilities
J. Maguranyanga (Chairperson)
G. Taputaira
D. Matenga
J. Tichelaar
P. Gowero
J. Maguranyanga (Chairperson)
E. Chisango
P. Gowero
J. de la Fargue
J. Tichelaar
C. Glover
D. Matenga (Chairperson)
G. Taputaira
J. de la Fargue
C. Glover
J. Maguranyanga
P. Gowero
G. Taputaira (Chairperson)
D. Matenga
C. Glover
J. Tichelaar
G. Gore
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. The Chief
Banking 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.
is responsible
The committee
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. The group’s
remuneration policy is to provide remuneration packages that
attract and retain high performing individuals. The group’s
remuneration package is primarily made up of basic salaries,
share options and performance related bonuses. The 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.
The Risk and Compliance Management Committee oversees
the quality, integrity and reliability of the Group’s enterprise
risk management systems and reviews all group-wide
risks. The Chief Executive Officer, Chief Risk Officer and Head
of Compliance 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.
the
technology-related
The IT & Digital Banking Committee provides governance
investments,
and oversight on
operations and strategies and their alignment with the Bank’s
overall strategy. It also oversees the Bank’s technology risk
management and security framework and its effectiveness (in
conjunction with the Risk & Compliance Committee). 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.
Executive Committee
Executive & Heads of Departments
Directors Attendance Register
NAME OF DIRECTOR
No. of Meetings Held
B. A. Chikwanha
D. Matenga
E. Chisango
G. Taputaira
J. Maguranyanga
C. Glover
J. Tichelaar
J. de la Fargue
P. Gowero*
G. Gore
M. Chipunza
INED
INED
INED
INED
INED
NED
NED
NED
INED
E
E
* P. Gowero - Appointed 26 April 2023
MAIN BOARD
6
6
6
6
4
5
6
5
6
5
6
6
AUDIT
6
N
N
6
6
6
N
N
N
N
N
N
The role of the Executive Committee is to assist the Chief
Executive Officer in the performance of his duties and in
dealing with the day to day activities of the Group’s business
including development and implementation of the strategy,
business plans and annual budget as approved by the Board,
development, implementation and monitoring of policies
and procedures as approved by the Board, assessment and
management of risk, prioritisation and allocation of resources
and management and development of talent.
CREDIT
ALCO & FINANCE
4
4
N
4
N
N
N
N
3
N
4
N
4
N
4
4
N
N
4
3
4
3
4
4
Tribe28ANNUAL REPORT 2023 15
NAME OF DIRECTOR
LOANS REVIEW
HUMAN CAPITAL, REMUNERATION &
NOMINATIONS
RISK & COMPLIANCE
ICT & DIGITAL
No. of Meetings Held
B. A. Chikwanha
D. Matenga
E. Chisango
G. Taputaira
J. Maguranyanga
C. Glover
J. Tichelaar
J. de la Fargue
P. Gowero*
G. Gore
M. Chipunza
4
N
4
N
3
4
N
3
N
3
N
N
5
5
N
5
N
5
5
4
5
4
N
N
4
N
4
N
3
3
4
N
4
3
N
N
*B A Chikwanha retired from the Board with effect from 31 December 2023.
* P. Gowero joined the Board with effect from 26 April 2023.
7
7
6
N
5
N
6
6
N
N
7
N
KEY
- INED = Independent Non-Executive Director
- NED = Non-Executive Director
- E = Executive Director
- N = Not a member
Continuous Professional Development
Continuous professional development remains a key focus area for the Board, meant to support Directors to meet the continually evolving
demands of our regulatory, economic and business environment and to ensure that the Directors are equipped with the relevant knowledge
and skills to oversee the implementation of the Company’s strategic objectives. During the year under review, one director attended an Audit
Committee training which provides Audit Committee and Board Members with practical insights, resources and peer exchange opportunities
focused on strengthening oversight of financial reporting, audit quality, IT security matters and how to address the array of challenges facing
boards and businesses today. Five directors were trained on AML/CFT by the Reserve Bank of Zimbabwe and the full board attended a training
on board dynamics, board archetypes and what makes for a high performing board which was facilitated by an external consultant.
Board Meetings
The Board holds meetings on a quarterly basis and as and when necessary to do so. The Board Meetings Calendar is set and approved in
advance. During the year under review the Board held 6 meetings, four set meetings in each quarter and two strategy review meetings. The
meetings were held physically and where directors could not attend the meetings in person they had the option to attend the meetings
virtually. The focus areas for the Board during the year included strategy review, business continuity, financial performance, risk management
and governance. The board held two strategy review sessions offsite during the course of the year. The Board Chair aims to ensure that
adequate time is allocated to each agenda item to allow for thorough debate and challenge during meetings. It is a tenet of the Board that
all Directors be allowed to independently exercise their judgment and to actively participate during meetings. To assist the Board in the
discharge of its duties, management prepare comprehensive reports for Board and Committee meetings which are circulated in advance
of the meetings to allow Directors to have timely and up to date information which they use in their decision making. Further, Executive and
Senior management attend meetings by invitation and attest to the adequacy and accuracy of information submitted to the Board.
Annual Board Evaluation
Board and Director evaluations are useful in that they assist the Board and Senior management to identify potential opportunities and areas
for improvement, provide a platform to remind Directors of their role and responsibilities, provide Directors an opportunity to confidentially
raise any concerns or feedback they may have and provide the Chairperson with an opportunity to address any performance shortfalls /
weaknesses in the board or any of its committees. In line with the RBZ Corporate Governance Guideline the Board undertakes an annual
performance evaluation. The assessment involves a review of the performance of the Board, the Board Chairperson and Individual Director
Performance. A report summarising the evaluation process, the outcome and the action plan arising out of the evaluation is submitted to
the Reserve Bank of Zimbabwe by the 31st of March each year. The Board conducted its evaluation during the year under review and the
evaluation concluded that Board performance was strong.
Company Secretary
The Directors have access to the Company Secretary whose role includes the provision of professional guidance and advice to individual
directors and to the Board as a whole. In addition, the Company Secretary is responsible for ensuring that the Board adheres to applicable
rules, regulations and procedures and ensures the effective functioning of the Board through a seamless flow of information between the Board
and Management. The Company Secretary also reminds the Board of their roles and responsibility to the Company and all its stakeholders.
Access to Information by Directors
The Board is entitled to seek information concerning the Company from any Group employee or from any other source. Directors have the
right to attend any meeting of any Board Committee, provided that they first seek the permission of the Chairperson of the Committee
concerned (which permission shall not be unreasonably withheld) and that the board member so concerned, not being a member of the
Committee shall not have a right to vote during such meeting. A board member who attends a Committee meeting of which they are not a
member is not entitled to a fee for such attendance.
Information periodically availed to the board includes strategic and operating plans and budgets, strategic plans, budgets and financial
performance reports are reviewed every quarter by the board. The board also reviews and approves capital expenditure budgets and receives
quarterly updates on capital expenditure from management. The operating subsidiaries report to the board on a quarterly basis. The board
Tribe28ANNUAL REPORT 2023 16
also receives information pertaining to asset and liability management, enterprise risk management, significant credit facilities and material
defaults, major Information Technology projects, dividend payments proposals, significant litigation involving the Group, key reputational
matters, key compliance matters, any proposals on joint ventures, mergers and acquisitions and any significant human capital matters.
Professional Advice
In the discharge of their duties, the Group’s Directors are entitled to have access to independent professional advice at the Group’s expense
where necessary.
7. Auditors
At the forthcoming Annual General Meeting, the shareholders will be asked to authorise the Directors to approve the auditors’ remuneration
for the year ended 31 December 2023. The Group’s external auditors, Ernst & Young served their 5-year term and a further 2 years following
the granting of an extension by the regulatory authorities and the shareholders during the 2022 Annual General Meeting. The extended term
expires at the conclusion of the 2024 Annual General Meeting. The Board therefore proposes the appointment of KPMG as the auditors of the
Group for the ensuing year until the conclusion of the next Annual General Meeting.
8. Statement of Compliance
The Group continues to review and align its governance practices in line with the Companies and Other Business Entities Act [Chapter 24:31]
and the Zimbabwe Stock Exchange Listing Requirements Rules SI 34 of 2019 which were both enacted in 2019 and whose implementation is
ongoing. In addition to the above, the Group also ensured it complied with the Banking Act [Chapter 24:20], the Banking Regulations SI 205 of
2000, the National Payment Systems Act [Chapter 24:23], the Money Laundering and Proceeds of Crime Act [Chapter 9:24] and the Exchange
Control Act [Chapter 22:05] as its key regulations. The Board advises that it complied with all relevant regulatory provisions throughout the
year ended 31 December 2023.
BY ORDER OF THE BOARD
MRS. V. T. MUTANDWA
COMPANY SECRETARY
20 March 2024
Tribe28ANNUAL REPORT 2023 17
Board of Directors
A summary profile of each of the Directors is stated below:
Pearson Gowero– Independent Non-Executive Director (Chairman)
Pearson Gowero is a seasoned business leader with extensive experience working in consumer facing
businesses. He is a holder of a Bachelor of Science Degree in Economics from the University of Zimbabwe
and a Masters in Business Leadership from the University of South Africa. He served for SAB Miller Africa
as the Country Managing Director for Zambia and Malawi from September 2006 to June 2011. He has held
several leadership and management positions during his career at Delta Corporation Limited in Marketing,
Sales and Distribution and General Management. He served as Chief Executive Officer of Delta Corporation
Limited, (an associate of ABInBev) from June 2012 until his retirement in June 2021. He has sat on various
boards of listed companies, subsidiaries and associates of the Delta Group. He has also served as a
member of the National Council of the Confederation of Zimbabwe Industries. Currently, Pearson is the
Board Chairman of SeedCo Limited. Additionally, he is a director of Zambeef Products PLC Zambia and
Marksbury Investments Private Limited.
Gerald Gore – Chief Executive Officer
Gerald Gore has over 18 years banking experience that spans over digital transformation, risk management,
corporate banking, treasury and retail banking. Prior to his appointment as Chief Executive Officer on 1
January 2022, Gerald served as the Deputy CEO since September 2019 as well as Chief Operating Officer
since 2015 supporting the CEO in strategy execution and responsible for the Bank’s digital transformation.
He also served as Chief Risk Officer of NMB Bank. Prior to joining NMB in 2008, he worked for a number of
financial institutions in corporate banking, treasury & risk management. Gerald holds a Master in Business
Leadership (MBL) from Unisa, MSc in Finance & Investments from NUST, BComm Banking from NUST and an
Executive Development Program from Wits Business School. He is also an Alumnus of the USA International
Leadership Development Program (IVLP) under emerging African leaders.
Margret Chipunza – Chief Finance Officer
Margret is a Chartered Accountant having trained with Deloitte. She is a holder of a Bachelor of Accounting
Science degree from the University of South Africa, and a Certified Microfinance Expert with Frankfurt
School of Finance and Management. She has over 20 years of experience in the financial services sector,
having held senior positions in various financial institutions. She is an alumnus of the Boulder Institute of
Microfinance, the School of African Microfinance and the HBS Accion program on Strategic Leadership in
Inclusive Finance which is offered by Harvard Business School – Executive Education. Prior to joining NMB
Bank, Margret was the Chief Finance Officer of African Century Limited.
Emilia Chisango – Independent Non-Executive Director
Emilia is a Chartered Accountant with 28 years working experience, 21 of which were with KPMG where she
left at Partner level. She spent a further 6 years working as the Chief Finance Officer and Finance Director
at Econet Wireless Zimbabwe Limited and Ecocash Holdings respectively.
On 1 March 2021, Emilia left Ecocash Holdings to concentrate on consolidating the Hempac Trading (Private)
Limited operations. She is the founder and current Group Chairperson of Hempac. Emilia has recorded
several firsts in her career, having been the first black female partner in any accounting firmin Zimbabwe.
She also became the first female and youngest president of the Institute of Chartered Accountants in
Zimbabwe (ICAZ) in its 90-year-old history then. Testament to her achievements, she was selected to
represent Zimbabwe in the Fortune /US State Department Global Women’s Mentoring Partnership in 2016,
a rigorous process where only one female executive is selected in any year.
Givemore Taputaira – Independent Non-Executive Director
Givemore Taputaira is an independent non-executive director who was appointed to the NMBZ Holdings
Limited and NMB Bank Limited boards on 2 January 2020. Givemore holds a Bachelor of Science General
degree and a Masters in Business Administration degree from the University of Zimbabwe. He is both a
Certified International Professional Leader (CIPL) and Certified International Professional Strategist (CIPS).
Certification is obtained from Cambridge Global Learning in the United Kingdom. Givemore has over 18
years’ experience in ICT and Business Development in 7 different countries within Africa. He previously was
a board member of CBZ Holdings Limited, wherein he had the opportunity to chair the Risk and Compliance
Committee, as well as the Strategy and Innovation Committee at different times during his tenure on that
Board. Givemore is currently the Managing Director at Digital Edge Solutions.
Tribe28ANNUAL REPORT 2023 18
James de la Fargue – Non-Executive Director
James de la Fargue represents African Century on the Board. He was appointed to the Board on 4 May
2016. He is a holder of a BA Business Organisation(Herrit-Watt University), ACCA, Diplomas in Marketing &
Marketing Research and a Certificate in General Agriculture. James worked for a number of international
organizations including Deloitte & Touché Management Consultants, Unilever PLC and Chargeurs SA. He
is a former president of the Zimbabwe Tobacco Association and worked at MBCA as a senior executive in
charge of Corporate Finance. James was involved in business consultancy work and management of an
integrated farm in Centenary from 1998 to 2008. Since 2009, James has been with African Century Limited
where he initially consulted for the group and later took up a position as Business Development Director
of African Century Financial Holdings and as Executive Chairman of Frango King. He currently is the Chief
Executive Officer of Lake Harvest, the largest tilapia farming operation in Africa.
Christine Glover – Non-Executive Director
Christine Glover represents Arise B.V. on the Board, having been appointed as a director on 26 June 2019.
She has over thirty years of strategic and operational experience in financial services, with a strong focus
on low-cost housing and development finance. She recently retired from Old Mutual Investment Group
(South Africa), where she was employed as Head of Development Impact Funds for ten years. She has also
held several international consulting and executive management roles throughout her career, where she
has made an immense contribution to the development of financial services for low-income households.
Christine is a qualified town planner and holds a Master’s degree in City and Regional Planning as well as
an Honours degree in Architectural History.
Jean Maguranyanga – Independent Non-Executive Director
Jean Maguranyanga is a lawyer by profession with over 25 years’ experience. She was appointed to the
Board on 10 July 2015. Jean commenced her career as a Prosecutor in the Ministry of Justice Legal and
Parliamentary affairs and moved after one year to Parliamen tof Zimbabwe. 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.
Dzingira Matenga – Independent Non-Executive Director
Dzingira Matenga is an independent non-executive director who was appointed to the board on 19 July
2022. Dzingira is the founder of Zamlim Investments, a pan-African company with interests in Intelligent
Automation and Artificial Intelligence (via its partnership with New York based Workfusion Inc.) as well
as a focus on management consulting for clients in South Africa. He is a Managing Director in Accenture
SA’s Strategy & Consulting Division and is a former Executive Director of Ernst & Young’s Africa Consulting
practice. Dzingira is a Chartered Management Accountant, a Prince2 Certified Project Management
practitioner and holds a BA (Hons) in Accounting and Finance. He has worked extensively across the globe,
including 12 years spent working in Europe (UK, Spain, Greece, France, Germany), Asia (Kazakhstan, China)
and North America and has spent the past 13 years working across sub-Saharan Africa on mining, power,
logistics and financial services engagements. Dzingira was a special advisor to the Rwandan Development
Board (2017 – 2018) and has worked closely with many of Africa’s Development Finance Institutions as well
as major State Owned Enterprises.
Julius Tim Tichelaar – Non Executive Director
Julius Tichelaar is a Partner at AfricInvest and represents AfricInvest on the Board. He was appointed to
the Board on 31 October 2016. Julius leads investments across Africa in disruptors and traditional financial
institutions, with a focus on strategic expansion and digital transformation. Julius has 12 years’ experience
in private equity with sourcing, structuring and execution of transactions in Africa. Previously, he worked
on a predecessor fund for financial services at AfricInvest and on a wide range of transactions in other
industries. Julius serves as board member for institutions across East and Southern Africa.Julius holds a
Master in Science of Management (Msc) with a specialization in Finance from the Erasmus University in
Rotterdam, the Netherlands, and graduated with honors.
Tribe28ANNUAL REPORT 2023 19
FINANCIAL SUMMARY
Inflation Adjusted
Historical Cost
31 Dec 2023
ZWL ‘000
31 Dec 2022
ZWL ‘000
31 Dec 2023
ZWL ‘000
31 Dec 2022
ZWL ‘000
Operating profit before impairment charge and loss on net monetary position
396 553 900
110 175 693
450 015 864
30 169 029
Total comprehensive income
Basic earnings per share (cents)
Diluted earnings per share (cents)
Deposits from customers
Total gross loans and advances
327 597 809
60 258 826
467 959 674
31 302 191
67 073
66 393
14 484
14 125
93 824
92 872
6 396
6 237
528 530 915
255 718 976
528 530 915
53 215 217
494 536 518
222 417 933
494 536 518
46 285 257
Total shareholders’ funds and shareholders’ liabilities
538 627 404
209 462 226
512 648 441
39 155 092
ENQUIRIES:
NMBZ HOLDINGS LIMITED
Gerald Gore, Chief Executive Officer, NMBZ Holdings Limited
Margret Chipunza, Chief Finance Officer, NMBZ Holdings Limited
geraldg@nmbz.co.zw
margretc@nmbz.co.zw
Website:
Email: enquiries@nmbz.co.zw
Telephone: +263 8688003347
http://www.nmbz.co.zw
Tribe28ANNUAL REPORT 2023
20
INDEPENDENT AUDITOR’S 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 24 2750905-14 or 2750979-83
Fax: +263 24 2750707 or 2773842
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 inflation adjusted Consolidated Financial Statements
Qualified Opinion
We have audited the accompanying inflation adjusted consolidated financial statements of NMBZ
Holdings Limited and its subsidiaries (the Group)’, as set out on pages 26 to 96, which comprise the
inflation adjusted consolidated statement of financial position as at 31 December 2023 and the
related inflation adjusted consolidated statement of comprehensive income, the inflation adjusted
consolidated statement of changes in equity and the inflation adjusted consolidated statement of
cash flows for the year then ended, and notes to the consolidated financial statements, including
material accounting policy information.
In our opinion, except for the effects of the matters described in the Basis for qualified opinion
section, the accompanying financial statements present fairly, in all material respects the financial
position of the Group as at 31 December 2023, and its financial performance and its cash flows for
the year then ended in accordance with International Financial Reporting Standards (IFRSs), and the
manner required by the Companies and Business Entities Act (Chapter 24:31) and the Banking Act
(Chapter 24:20).
Basis for qualified opinion
Matter 1: Non-compliance with International Financial Reporting Standards IAS 21- The Effects of
Changes in Foreign Exchange Rates, IFRS 13 - Fair Valuation Measurement and IAS 8 - Accounting
Polices, Changes in Accounting Estimates and Errors.
Impact of the prior year modification on the current year audit report and opening balances.
i) Valuation of investment properties, freehold land and buildings
In the prior years up to financial year ended 31 December 2021, the Group valued Investment
property and freehold land and buildings using USD denominated inputs and converting these to ZWL
at the closing auction rate. We believed that applying conversion rate to a USD valuation to calculate
ZWL property values did not accurately reflect market dynamics, as risks associated with currency
trading do not reflect the risks associated with the properties and therefore did not meet IFRS 13
requirements.
Management has not restated the prior year amounts in line with the requirements of IAS8,
consequently, corresponding amounts, that is, the revaluation gain, other income and tax expense
on the inflation adjusted consolidated statement of profit or loss and other comprehensive income
remain misstated. Our audit report on the current period’s inflation adjusted consolidated financial
statements is therefore modified because of the possible effect of this matter on the comparability
of the current period’s figures.
ii) Inappropriate accounting for blocked funds
In prior year, the group included in other assets local balances denominated in the group’s functional
currency, this related to a legacy debt balance held with the central bank which had been treated as
a foreign currency denominated asset and translated at the foreign auction exchange rate as at 31
December 2022 in contravention of IAS 21 which defines ‘foreign currency’ as a currency other than
the functional currency of the entity resulting in an overstatement of the balance.
A member firm of Ernst & Young Global Limited
21
Independent Auditor’s report (continued)
NMBZ Holdings Limited
Management has not restated the prior year amounts in line with the requirements of IAS8,
consequently, corresponding amounts for other assets on the inflation adjusted consolidated
statement of financial position and Net foreign exchange gains on the inflation adjusted consolidated
statement of profit or loss and other comprehensive income remain misstated. Our audit report on
the current period’s inflation adjusted consolidated financial statements is therefore modified
because of the possible effect of this matter on the comparability of the current period’s figures.
Matter 2: Inappropriate valuation of treasury bills
Included in Investment securities are treasury bills received from the central bank in lieu of the
Reserve Bank of Zimbabwe (RBZ) Deposit made in 2019 of ZWL63 127 959 650,98 (2022: ZWL6
599 867 282,51) with maturity dates ranging from three years to twenty years. These have not been
discounted to take into account the time value of money which is in contravention of IFRS 9 that
requires financial assets measured at amortized cost to be discounted using effective interest method.
Had the treasury bills been recognized at fair value that is the discounted future value balance would
have been reduced by ZWL25 851 316 805,02 (2022: ZWL3 260 789 866). Consequently, the
foreign exchange gains of ZWL68 337 098 567,18 and retained earnings of ZWL84 173 485 180,76
(2022: ZWL96 589 483 350) relating to the treasury bills are also overstated.
Our prior year audit opinion was modified due to this matter.
Matter 3: Consequential impact on IAS29 - Financial Reporting in Hyperinflationary Economies
Furthermore, notwithstanding that IAS 29 has been applied correctly, it is noted that its application
was based on prior and current periods’ financial statements which were not in compliance with IFRS
9, and IAS 8 as described above. Had the correct base numbers been used, the above stated accounts
would have been materially different. Consequently, monetary loss of ZWL65 818 336 892 (2022:
ZWL31 352 720 000) is impacted as a result of misstatements above.
The effects of the above departures from IFRS are material but not pervasive to the consolidated
inflation adjusted financial statements.
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 consolidated Inflation adjusted financial statements section of our report of the Group.
We are independent of the Group 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 of the group 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 qualified opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the consolidated financial statements of the current period. In addition to the matter(s)
described in the Basis for Qualified Opinion section, we have determined the matters described below
to be the key audit matters to be communicated in our report. These matters were addressed in the
context of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters. For each matter below, our
description of how our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
consolidated financial statements section of our report, including in relation to these matters.
Accordingly, our audit included the performance of procedures designed to respond to our
assessment of the risks of material misstatement of the financial statements. The results of our audit
procedures, including the procedures performed to address the matters below, provide the basis for
our audit opinion on the accompanying financial statements.
22
Independent Auditor’s report (continued)
NMBZ Holdings Limited
Key audit matter
Issue 1: Expected credit losses on financial assets
33% of the Group’s total assets comprise of
“Total Loans and Advances” which are disclosed
on Note 20 to the financial statements. The
loans are significant to the Group in value and
comprise of a large volume of balances of
varying magnitude. A significant amount of
to
audit effort
independently verify the existence of the loans.
therefore
required
is
The Group is exposed to credit risk on its
portfolio. Significant judgement is exercised by
Management in assessing the impairment of
loans and advances as disclosed on note 20.3 to
the financial statements. Due to the size of the
Group’s loan book and the significant degree of
estimation in determining the impairment of
loans and advances, the issue was considered to
be a key audit matter.
Management applied judgment on:
• Amount and timing of cash flows
• Evaluation of the borrower’s financial
situation and the net realisable value of
collateral.
is
in
involved
subjectivity
the
There
determination of the amounts of advances
deemed uncollectable and requiring impairment
by Management. The determination of
uncollectible amounts is based on a client-by-
client basis.
applied
We refer to Note 2.5 which details the methods,
judgments and assumptions
by
management in estimating the impairment of
loans and advances. The matter required
significant interactions between the auditor and
Management.
Issue 2: Presumed risk in revenue recognition
The bank’s income which comprises of Interest
Income and Fees & Commission Income was an
area of most significance for the audit in the
current year due to Interest income being a
significant component of the bank's financial
statements, both streams of income are highly
automated therefore completeness & accuracy
is an area of audit focus and that the bank's
operations are largely dependent on interest
income generation.
How our audit addressed the matter
In evaluating the adequacy of impairment of
loans and advances we performed the
following procedures:
• We obtained an understanding of the
credit approval and
loan on-boarding
process to confirm appropriateness of the
loan information in the IT system which is
used as basis for the impairment loss
allowance calculation.
followed
• We obtained an understanding of the
process
the
impairment allowance for the various
the
financial
controls around the process.
in calculating
instruments
including
• We performed tests on the accuracy and
completeness of inputs in the ECL model,
and special emphasis was put on days past
due as a key input to the impairment loss
allowance calculation.
• We reviewed the staging of the loans by
analysing
the
staging, such as payment behaviour,
financial ratios, and industry of the clients
with the loans.
factors affecting
the
• We reviewed lawyers’ letters and identified
all loans under litigations and verified if
those were allocated to the correct stage
per the credit policy. All loans being
handled by the lawyers were appropriately
to stage 3 as per our
allocated
expectations.
In validating the recognition of revenue, we
performed the following procedures:
• We updated our understanding of the
revenue recognition process, performed
walkthroughs
our
understanding and evaluated the design
effectiveness of controls related to the
significant risk identified.
confirm
to
• We compared results with those of prior
periods and those expected for the current
period and discussed significant variations
with management for reasonability.
• Our Technology Risk team confirmed the
automated aspects of the interest, fees and
commission
calculations are
configured correctly and have been
income
23
Independent Auditor’s report (continued)
NMBZ Holdings Limited
operating effectively throughout the audit
period and performed recalculations on
most automated revenue lines.
• We performed year end cut off procedures
on the revenue transactions.
• We reviewed the treatment of income on
impaired financial instruments.
• Our
Technology
also
recalculated the income for suspended
interest.
team
Risk
• We performed tests of details on non-
automated revenue lines. We also obtained
and inspected supporting documentation
for manual
fully
automated accounts to confirm accuracy
of these transactions.
journals made
in
• We selected manual
journal entries
processed to all revenue accounts to
confirm validity and business rationale as
well as the appropriateness of manual
adjustments processed.
• We reviewed the process followed by the
independent
confirm
valuators
appropriateness of methodology and
valuation
assumptions
purposes in the determination of fair value
adjustments.
for property
to
• We also reviewed the compliance of the
banking operations to the transaction fees
in
issued by the
regulator.
line with directives
• We assessed the appropriateness of the
Revenue recognition criteria used by
management as per
IFRS 15
requirements.
the
• We reviewed the relevant disclosures on
the annual report in accordance with IFRS
15 through our financial statement review
process.
Issue 3: Suspense accounts with long outstanding reconciling items
In prior years the Bank has experienced
significant increase in volumes of transactions
processed in its accounting systems arising
from the extensive use of its digital platforms
like mobile banking, POS and Zimswitch.
in
to
Accordingly,
transactions, there have been some delays in
reconciling all accounts.
increase
due
the
Long outstanding and unreconciled balances
create an opportunity
fraud and
manipulation which may not be detected and
corrected
in material
misstatements of the financial statements for
both suspense and bank accounts.
resulting
timely
for
In validating the suspense accounts, we
performed the following procedures:
• We updated our understanding of how the
bank’s suspense accounts operate.
• We obtained an understanding of the
system of internal control with regards to
the review and approval thereof and
evaluate the precision and sensitivity of
thresholds applied by management in the
review process.
• We compared the prior year and current
year balance of suspense accounts to
identify any significant increases in the
balance at year end.
tested
account
reconciliations at year end to confirm that
suspense
• We
the
24
Independent Auditor’s report (continued)
NMBZ Holdings Limited
these have been appropriately performed
and we followed up on reconciling items.
Other information
The directors are responsible for the other information. The other information comprises of the
Chairman’s Statement, Directors’ Profiles and the Report of the Directors but does not include the
inflation adjusted consolidated financial statements and our auditor’s report thereon. Our opinion on
the inflation adjusted consolidated financial statements does not cover the other information and we
do not express an audit opinion or any form of assurance conclusion thereon.
In connection with our audit of the inflation adjusted financial statements, our responsibility is to
read the other information and, in doing so, consider whether the other information is materially
inconsistent with the inflation adjusted consolidated financial statements or our knowledge obtained
in the audit, or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. As described in the Basis for Qualified Opinion section above, the Group
did not comply with the requirements of IAS 8 Accounting Policies, IFRS 13 Fair value measurement,
Changes in Accounting Estimates and Errors, we disagree with treatment of blocked funds as foreign
currency in contravention with IAS 21 and we disagree with the valuation of treasury bills in lieu of
blocked funds as well as the application of IAS 29 - Financial Reporting in Hyperinflationary
Economies on incorrect base numbers. We have concluded that the other information is materially
misstated for the same reasons.
Responsibilities of the Directors for the Inflation adjusted Consolidated Financial Statements
The directors are responsible for the preparation and fair presentation of the inflation adjusted
consolidated financial statements in accordance with International Financial Reporting Standards and
the requirements of the Companies and Other Business Entities Act (Chapter 24:31) and the Banking
Act (Chapter24;20), and for such internal control as the directors determine is necessary to enable
the preparation of inflation adjusted financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the inflation adjusted consolidated financial statements, the directors are responsible
for 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 the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Inflation adjusted Consolidated Financial Statements
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 issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance but is not a guarantee that an audit conducted in accordance with ISAs will always detect
a material misstatement 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 inflation adjusted consolidated
financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain
professional scepticism 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 involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
25
Independent Auditor’s report (continued)
NMBZ Holdings Limited
• 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 Bank’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
• 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.
• Evaluate the overall presentation, structure and content of the inflation adjusted
consolidated financial statements, including the disclosures, and whether the inflation
adjusted consolidated financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express an opinion on the consolidated
inflation adjusted financial statements. We are responsible for the direction, supervision and
performance of the Group audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the inflation adjusted consolidated financial statements of the current
period and are therefore the key audit matters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Mr Walter
Mupanguri (PAAB Number 367).
Ernst & Young
Chartered Accountants (Zimbabwe)
Registered Public Auditors
Harare
28 March 2024
26
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
GROUP
Inflation Adjusted
Historical Cost*
Interest revenue calculated using the effective interest method
Interest expense calculated using the effective interest method
Net interest income
Fee and commissions income
Net foreign exchange gains
Revenue
Other income
Operating income
Operating expenditure
Note
31 Dec 2023
ZWL’000
31 Dec 2022
ZWL’000
31 Dec 2023
ZWL’000
31 Dec 2022
ZWL’000
3
4
5.1
5.2
5.3
127 941 940
101 251 280
72 076 896
15 800 168
( 29 724 126)
( 30 645 349)
( 14 651 080)
( 4 591 382)
98 217 814
70 605 931
57 425 816
228 862 632
73 731 203
137 756 521
11 208 786
10 705 516
128 137 119
18 351 775
136 315 649
4 048 384
455 217 565
162 688 909
331 497 986
25 962 686
158 115 100
38 803 578
249 250 716
17 940 335
613 332 665
201 492 487
580 748 702
43 903 021
6
( 216 778 764)
( 91 316 794)
( 130 732 838)
( 13 733 992)
Operating income before impairment charge and loss on net monetary position
396 553 901
110 175 693
450 015 864
30 169 029
Expected credit impairment losses on financial assets measured at amortised cost
20.3
( 8 394 325)
( 1 596 336)
( 14 961 385)
( 1 191 393)
Loss on net monetary position
( 65 818 337)
( 31 352 720)
-
-
Profit before tax
Taxation
Profit for the period
Other comprehensive income:
322 341 239
77 226 637
435 054 479
28 977 636
7.1
( 46 710 860)
( 19 550 861)
( 49 494 612)
( 3 509 130)
275 630 379
57 675 776
385 559 867
25 468 506
Revaluation gains on land and buildings, net of tax**
5.4
51 967 431
2 583 050
82 399 807
5 833 685
Total comprehensive income for the period
327 597 810
60 258 826
467 959 674
31 302 191
Earnings per share (ZWL cents)
- Basic
- Diluted
- Headline
8.3
8.3
8.3
67 073
66 393
39 203
14 484
14 125
6 996
93 824
92 872
49 422
6 396
6 237
2 952
* The Historical Cost information has been shown as supplementary information for the benefit of users. The Auditors have not expressed an
opinion on the Historical Cost information.
** The revaluation gains on land and buildings will not be recycled into profit or loss in the subsequent reporting period. They will however
be recycled through equity.
COMPANY
Inflation Adjusted
Historical Cost*
Note
31 Dec 2023
ZWL’000
31 Dec 2022
ZWL’000
31 Dec 2023
ZWL’000
31 Dec 2022
ZWL’000
Other income
Operating expenditure
-
1 453 688
-
302 410
( 401 331)
-
( 260 220)
-
Operating loss before impairment charge and loss on net monetary position
Gain on net monetary position
( 401 331)
6 574 800
1 453 688
( 260 220)
302 410
124 185
-
-
Profit/(Loss) before tax
6 173 469
1 577 873
( 260 220)
302 410
Taxation
7.1
-
286
-
14
Profit/(Loss) for the period
6 173 469
1 578 159
( 260 220)
302 424
* The Historical Cost information has been shown as supplementary information for the benefit of users.
Tribe28ANNUAL REPORT 2023 27
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
GROUP
Inflation Adjusted
Historical Cost*
NOTE
31 Dec 2023
ZWL’000
31 Dec 2022
ZWL’000
31 Dec 2023
ZWL’000
31 Dec 2022
ZWL’000
SHAREHOLDERS’ FUNDS
Share capital
Share Premium
Treasury shares reserve
Functional currency translation reserve
Revaluation reserve
Share Option Reserve
Retained earnings
Total equity
9.2.1
95 172
95 149
124
10
10
10
10
10
26 793 275
20 906 488
3 174 723
( 2 046)
( 2 046)
7 634 508
7 634 508
( 394)
11 620
78 520 998
26 553 568
90 149 489
1 541 282
1 236 145
359 242
416 856 086
148 587 085
411 765 508
115
172 496
( 394)
11 620
7 749 682
129 569
30 165 681
531 439 275
205 010 897
505 460 312
38 228 768
Subordinated term loan
11
7 188 128
4 451 329
7 188 128
926 323
-
Total shareholders’ funds and shareholders’ liabilities
538 627 403
209 462 226
512 648 440
39 155 092
LIABILITIES
Deposits
Other liabilities
Borrowings
Current tax liabilities
Deferred tax liabilities
Total liabilities
Total shareholders’ funds and liabilities
ASSETS
Cash and cash equivalents
RBZ Digital Gold Tokens
Investment securities
Loans and advances
Other assets
Assets held for sale
Trade and other investments
Current tax assets
Investment properties
Intangible assets
Property and equipment
13.1
14
16
7.3
18
19
17
20
21
22
23
7.3
25
26
27
528 530 915
255 718 976
528 530 915
99 339 523
56 665 849
97 909 352
53 215 217
11 792 185
263 289 317
102 240 322
263 289 317
21 276 250
4 107 692
-
4 107 692
-
68 350 958
26 049 115
58 121 957
3 964 776
963 618 406
440 674 262
951 959 233
90 248 428
1 502 245 809
650 136 488
1 464 607 673
129 403 519
352 383 289
103 502 091
352 383 289
21 538 825
19 567 202
-
19 567 202
-
148 655 609
80 510 025
148 655 609
16 754 166
494 536 518
222 417 933
494 536 518
46 285 257
54 416 951
42 492 142
51 698 828
8 504 329
-
1 829 062
-
2 566 889
-
1 225 641
211 665
2 566 889
-
380 629
255 056
44 048
268 101 729
108 688 700
268 101 729
22 618 160
3 374 834
4 760 955
17 052
23 147
158 642 788
84 498 274
127 080 556
12 999 902
-
Total assets
1 502 245 809
650 136 488
1 464 607 673
129 403 519
* The Historical Cost information has been shown as supplementary information for the benefit of users.
Tribe28ANNUAL REPORT 2023 28
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
COMPANY
Inflation Adjusted
Historical Cost*
NOTE
31 Dec 2023
ZWL’000
31 Dec 2022
ZWL’000
31 Dec 2023
ZWL’000
31 Dec 2022
ZWL’000
SHAREHOLDERS’ FUNDS
Share capital
Share Premium
Treasury shares reserve
Share Option Reserve
Other Reserve
Retained earnings
Total equity
LIABILITIES
Other liabilities
Total liabilities
9.2.1
95 172
95 149
124
115
26 793 279
20 906 488
3 178 672
172 496
( 2 045)
1 462 962
-
( 2 046)
1 236 145
-
( 394)
( 394)
354 001
129 569
-
-
5 921 466
13 453 599
( 4 308 602)
( 88 343)
34 270 833
35 689 335
( 776 199)
213 442
14
1 165 457
1 407
1 165 751
294
1 165 457
1 407
1 165 751
294
Total shareholders’ funds and liabilities
35 436 290
35 690 742
389 552
213 736
ASSETS
Cash and cash equivalents
Current tax assets
Other assets
Group companies
Deferred tax assets
Total assets
19
7.3
21
24
18
14
76
2 417
66
363
14
76
14
77
259 746
2 417
54 053
35 433 717
35 430 500
387 031
159 564
67
67
14
28
35 436 290
35 690 742
389 552
213 736
The NMB Way
Disruption
We dare to be different and question the status quo
Tribe28ANNUAL REPORT 2023 29
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
GROUP
Inflation Adjusted
Share Capital Share
Premium
Treasury
Shares
Functional
Currency
Translation
Reserve
Share Option
Reserve
Revaluation
Reserve
Retained
Earnings
Total
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
Balance as at 1 January 2022
94 916
20 087 263
( 139)
7 634 508
545 919
23 970 518
92 836 801
145 169 786
Profit for the year
Revaluation of land and buildings, net of tax
Share options exercised
Share buy back
Scrip dividends paid
Dividend paid
Redeemable ordinary shares
Employee share schemes – value of employee services
-
-
1
-
11
-
221
-
-
-
43 212
-
-
-
-
( 1 907)
668 061
-
107 952
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
( 11 287)
-
-
-
-
701 513
-
57 675 767
57 675 767
2 583 050
-
-
-
-
-
-
-
-
2 583 050
31 926
( 1 013 567)
( 1 015 474)
( 668 072)
( 0)
( 243 844)
( 243 844)
-
-
108 173
701 513
Balance at 31 December 2022
95 149
20 906 488
( 2 046)
7 634 508
1 236 145
26 553 568
148 587 085
205 010 897
Profit for the year
Revaluation of land and buildings, net of tax
Share options exercised
Share buy back
Scrip dividends paid
Dividend paid
Employee share schemes – value of employee services
-
-
23
( 0)
-
-
-
-
-
-
( 3 949)
5 890 736
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
( 23)
-
-
-
305 160
-
275 630 378
275 630 378
51 967 431
-
-
-
-
-
-
-
51 967 431
-
( 453 491)
( 457 440)
( 5 890 736)
-
( 1 017 151)
( 1 017 151)
-
305 160
Balance at 31 December 2023
95 172
26 793 275
( 2 046)
7 634 508
1 541 282
78 520 998
416 856 086
531 439 275
GROUP
Historical Cost*
Share Capital
Share
Premium
Treasury
shares
Functional
Currency
Translation
Reserve
Share Option
Reserve
Revaluation
Reserve
Retained
Earnings
Total
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
Balance as at 1 January 2022
84
19 122
( 7)
11 620
27 768
1 915 997
5 085 121
7 059 705
Profit for the year
Revaluation of land and buildings, net of tax
Share options exercised
Share buy back
Scrip dividends paid
Dividend paid
Redeemable ordinary shares
Employee share schemes – value of employee services
-
-
0
-
2
-
-
-
5 727
-
-
-
-
( 387)
133 341
-
29
14 306
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
( 1 496)
-
-
-
-
103 297
-
25 468 506
25 468 506
5 833 685
-
-
-
-
-
-
-
-
5 833 685
4 231
( 205 933)
( 206 320)
( 133 343)
-
( 48 670)
( 48 670)
-
-
14 335
103 297
Balance at 31 December 2022
115
172 496
( 394)
11 620
129 569
7 749 682
30 165 681
38 228 769
Profit for the year
Revaluation of land and buildings, net of tax
Share options exercised
Share buy back
Scrip dividends paid
Dividend paid
Employee share schemes – value of employee services
-
-
9
-
-
-
( 0)
( 3 949)
-
-
-
3 006 176
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
( 9)
-
-
-
229 682
-
385 559 866
385 559 866
82 399 807
-
-
-
-
-
-
-
82 399 807
-
( 453 491)
( 457 440)
( 3 006 176)
-
( 500 372)
( 500 372)
-
229 682
Balance at 31 December 2023
124
3 174 723
( 394)
11 620
359 242
90 149 489
411 765 508
505 460 312
* The Historical Cost information has been shown as supplementary information for the benefit of users.
Tribe28ANNUAL REPORT 2023 30
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
COMPANY
Share Capital
Share
Premium
Inflation Adjusted
Treasury
shares
reserve
Currency
Translation
Reserve
Share Option
Reserve
Revaluation
Reserve
Retained
Earnings
Total
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
Balance as at 1 January 2022
94 916
20 087 263
( 139)
Profit for the period
Share options exercised
Share buy back
Scrip dividends paid
Dividend paid
-
1
-
11
-
-
43 212
-
-
-
( 1 906)
668 064
-
Redeemable ordinary shares
221
107 953
Employee share schemes – value of employee services
-
-
-
-
-
-
Balance at 31 December 2022
95 149
20 906 492
( 2 045)
Profit for the period
Share buy back
Scrip dividends paid
Dividends paid
Employee scheme - value of employee services
-
-
( 0)
( 3 949)
5 890 736
-
-
-
23
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
545 919
-
( 11 287)
-
-
-
-
701 513
1 236 145
-
-
-
-
226 817
Balance at 31 December 2023
95 172
26 793 279
( 2 045)
-
1 462 962
-
-
-
-
-
-
-
-
-
-
-
-
-
13 280 187
34 008 146
1 578 163
1 578 163
-
31 926
( 1 013 566)
( 1 015 472)
( 668 075)
-
( 243 844)
( 243 844)
-
108 174
520 734
1 222 247
13 453 599
35 689 340
6 173 470
6 173 470
( 453 491)
( 457 440)
( 5 890 736)
-
( 7 361 377)
( 7 361 377)
-
226 840
5 921 466
34 270 833
COMPANY
Share Capital
Share
Premium
Inflation Adjusted
Treasury
shares
reserve
Currency
Translation
Reserve
Share Option
Reserve
Revaluation
Reserve
Retained
Earnings
Total
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
Balance as at 1 January 2022
84
19 122
( 7)
Profit for the period
Share options exercised
Share buy back
Scrip dividends paid
Dividend paid
Redeemable ordinary shares
Employee share schemes – value of employee services
-
0
-
2
-
29
-
-
5 727
-
-
-
( 387)
133 341
-
14 306
-
-
-
-
-
Balance at 31 December 2022
115
172 496
( 394)
Profit for the period
Share buy back
Scrip dividends paid
Dividends paid
Employee scheme - value of employee services
-
( 0)
-
-
9
3 006 177
-
-
-
-
-
-
-
-
-
Balance at 31 December 2023
124
3 178 672
( 394)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
27 768
-
( 1 496)
-
-
-
-
103 297
129 569
-
-
-
-
224 432
-
-
-
-
-
-
-
-
-
-
-
-
-
( 27 598)
19 369
302 424
302 424
-
4 231
( 205 933)
( 206 320)
( 133 343)
-
( 48 670)
( 48 670)
-
14 335
24 777
128 073
( 88 343)
213 442
( 260 220)
( 260 220)
( 453 491)
( 453 491)
( 3 006 177)
9
( 500 372)
( 500 372)
-
224 432
354 001
-
( 4 308 602)
( 776 199)
* 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”.
Tribe28ANNUAL REPORT 2023 31
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
GROUP
Inflation Adjusted
Historical Cost*
Note
31 Dec 2023
ZWL’000
31 Dec 2022
ZWL’000
31 Dec 2023
ZWL’000
31 Dec 2022
ZWL’000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation
Non-cash items:
- Net monetary Loss
- Depreciation (excluding right of use assets)
- Depreciation –Right of use assets
- Amortisation of intangible assets
322 341 238
77 226 628
435 054 478
28 977 636
65 818 337
31 352 720
6
6
6
5 473 365
2 856 869
1 386 126
2 926 114
1 259 745
1 392 072
-
1 596 336
( 5 716 912)
( 6 800)
164 113
( 6 063 858)
( 283 695)
-
-
( 263 762)
81 046
( 3 322 605)
-
1 559 712
458 700
6 094
14 961 385
-
-
222 437
71 926
4 395
1 191 393
( 1 189 691)
( 2 311 833)
( 126 465)
( 254 724)
-
( 3 322 605)
( 218 556)
( 1 803)
( 26 722)
-
( 142 186 114)
( 32 823 582)
( 236 921 078)
( 16 380 731)
- Impairment losses on financial assets measured at amortised costs
20.3
8 394 325
- Sundry income - non -cash
- Investment properties fair value gains
- Trade and other investments fair value gains adjustment
- Profit on disposal of property and equipment
- Loss/(profit) on disposal of investment properties
- Profit in disposal of non-current assets held for sale
- Unrealised foreign exchange gain
25
23
5.3
5.3
( 158 229 037)
( 22 532 677)
( 158 229 037)
( 4 689 059)
- Non-cash employee benefits expense – share-based payments
305 160
701 513
229 682
103 297
Operating cash flows before changes in operating assets and liabilities
96 591 090
55 255 575
51 104 309
8 064 521
Changes in operating assets and liabilities
Increase in customer deposits
Increase in other liabilities
Increase in loans and advances
Increase in other assets
272 811 939
42 673 674
83 493 295
475 315 699
42 789 270
11 223 592
86 117 167
9 041 268
( 265 590 748)
( 91 199 645)
( 448 101 647)
( 11 924 809)
( 7 158 362)
( 43 194 500)
( 42 196 512)
( 7 793 984)
-
Net cash generated from operations
134 561 146
51 614 455
121 241 028
9 904 563
Corporate tax paid
( 20 287 014)
( 14 251 002)
( 15 566 380)
( 2 472 504)
Net cash inflow from operations
114 274 132
37 363 453
105 674 648
7 432 059
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of intangible assets (note 26)
Acquisition of investment securities
Net acqusitions of RBZ digital gold tokens
Proceeds on disposal of property and equipment
Dividend income from trade and other investments
Acquisition of trade and other investments
Acquisition of property and equipment (note 27)
Proceeds on disposal of investment properties
Acquisition of investment properties (note 25)
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of lease liabilities
Cash dividend paid
Issue of shares
Borrowings repaid
Borrowings raised
Share buyback
26
17
23
27
25
15
16
16
-
( 75 513)
-
( 346 421 331)
( 79 500 160)
( 132 072 378)
( 4 319 410)
263 762
-
-
-
9 690
-
-
( 4 319 410)
126 465
-
-
( 14 133)
( 6 143 914)
-
1 515
-
-
( 8 927 055)
( 12 071 479)
( 4 197 432)
( 2 162 776)
3 881 320
748 884
2 611 986
134 369
( 21 108 234)
( 18 493 384)
( 11 345 113)
( 2 764 347)
( 376 630 948)
( 109 381 962)
( 149 195 882)
( 10 949 286)
( 3 694 925)
( 1 017 151)
-
( 318 454)
( 243 844)
31 925
( 2 140 382)
( 500 372)
-
( 28 795 014)
( 1 589 812)
( 16 684 703)
270 808 081
( 457 440)
11 844 318
( 1 015 612)
258 697 770
( 457 440)
( 70 173)
( 48 670)
4 231
( 322 394)
16 873 751
( 206 320)
Net cash inflow from financing activities
236 843 551
8 708 521
238 914 873
16 230 425
Net (decrease)/increase in cash and cash equivalents
( 25 513 265)
( 63 309 988)
195 393 639
Net foreign exchange and monetary adjustments on cash and cash equivalents
274 394 463
86 327 431
135 450 825
Cash and cash equivalents at beginning of the year
103 502 091
80 484 648
21 538 825
12 713 198
3 953 365
4 872 262
Cash and cash equivalents at the end of the year
19
352 383 289
103 502 091
352 383 289
21 538 825
ADDITIONAL INFORMATION ON OPERATING CASH FLOWS FROM INTEREST
Interest received
129 182 666
101 251 280
188 199 343
15 395 364
Interest paid (including interest on lease liabilities)
( 24 751 971)
( 30 645 349)
( 9 678 924)
( 4 591 382)
Tribe28ANNUAL REPORT 2023 32
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
COMPANY
Inflation Adjusted
Historical Cost*
Note
31 Dec 2023
ZWL’000
31 Dec 2022
ZWL’000
31 Dec 2023
ZWL’000
31 Dec 2022
ZWL’000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation
Non-cash items:
- Net monetary Loss
6 173 469
1 577 873
( 260 220)
302 410
( 6 574 800)
( 124 185)
-
-
Operating cash flows before changes in operating assets and liabilities
( 401 331)
1 453 688
( 260 220)
302 410
Changes in operating assets and liabilities
(Decrease)/increase in other liabilities
Decrease/(increase) in other assets
1 164 050
( 3 447)
1 165 457
-
257 329
( 220 020)
51 637
( 51 649)
Net cash generated/(used) from operations
1 020 048
1 230 221
956 874
250 761
Net cash inflow/(outflow) from operations
1 020 048
1 230 221
956 874
250 761
CASH FLOWS FROM FINANCING ACTIVITIES
Cash dividend paid
Issue of shares
Share buy-back
-
-
( 243 844)
31 925
-
-
( 48 671)
4 231
( 457 440)
( 1 015 472)
( 251 120)
( 206 320)
Net cash outflow from financing activities
( 457 439)
( 1 227 390)
( 251 120)
( 250 760)
Net (decrease)/increase in cash and cash equivalents
562 608
2 831
705 754
Net foreign exchange and monetary adjustments on cash and cash equivalents
( 562 660)
( 2 995)
( 705 754)
Cash and cash equivalents at beginning of the year
66
229
Cash and cash equivalents at the end of the year
19
14
66
14
14
1
( 1)
14
14
Tribe28ANNUAL REPORT 2023 33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL INFORMATION
The NMBZ Holdings Limited Group (the Group) comprises the company (NMBZ Holdings Limited) and wholly owned subsidiaries, NMB Bank
Limited (the Bank), NMB Properties Limited and Xplug Solutions Limited.
NMB Bank Limited 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 and agency network in Harare, Bulawayo, Masvingo, Kwekwe, Mutare, Gweru, Bindura, Chinhoyi and Victoria Falls.
NMB Properties Limited is a property development and services company established in 2023. It was set up to broaden the NMBZ Holdings
product offering suite and optimize a significant portfolio of properties and real estate opportunities within and beyond the Group.
Xplug Solutions Limited services is a subsidiary of the NMBZ Holding Group whose main thrust is to use technology to transform any size of
business into achieving business growth, agility and composability.
The Holding Company is incorporated and domiciled in Zimbabwe and is an investment holding company. Its registered office address is
19207 Liberation Legacy Way, Borrowdale, Harare. 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. SUMMARY SIGNIFICANT ACCOUNTING POLICIES
2.1. BASIS OF PREPARATION
Compliance with local legislation
The condensed consolidated financial statements 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 and Zimbabwe Stock Exchange (ZSE) Listing Rules of 2019.
In addition, the Group’s Banking subsidiary is generally compliant with the following statutes:
• RBZ Banking Regulations, Statutory Instrument 205 of 2000;
• Bank Use Promotion and Suppression of Money Laundering (Chapter 24:24);
• Exchange Control Act (Chapter 22:05);
• Deposit Protection Act (Chapter 24.29);
• National Payments Systems Act (Chapter 24:23);
• Capital Adequacy and prudential lending guidelines.
Compliance with IFRS
The condensed consolidated financial statements are prepared with the aim of complying fully with International Financial Reporting Standards
(IFRSs) and have been able to achieve this with the exception of IAS 21 - The Effects of Changes in Foreign Exchange Rates, IFRS 9 – Financial
Instruments, IFRS 13 - Fair Value Measurement, IAS 8 – Accounting Policies, Changes in accounting estimates and errors and the consequential
impact on IAS 29 – Financial Reporting in Hyperinflationary Economies as indicated in the Independent Auditor’s Report.
The 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)
until 31 January 2023.
On the 3rd of March 2023, the Government issued SI 27 of 2023, which defined the term “rate of inflation” and introduced a new inflation
rate measurement method. Consequently, ZIMSTAT stopped reporting ZWL inflation and CPI figures and only released blended CPI figures.
There were further changes that introduced a geometric method of calculating inflation in September 2023. These changes have created a
challenge for the Group, as it had been using the ZWL CPI for reporting hyperinflated historical figures.
The use of indices issued by ZIMSTAT made comparability possible for business in Zimbabwe. While it is preferable for all companies using
the ZWL functional currency to use the same index, the standard provides that each business may determine an index for the purpose of
compliance with IFRS.
The determination of the indices is a significant area of judgement. The timing of the resolution of the uncertainty regarding the CPI is unknown.
Refer to the table below for the CPI sensitivity analysis
ZIMSTAT publishes monthly statistics on the Total Consumption Poverty Line (TCPL) in ZWL , which measures the amount required to purchase
both non-food and food items. By analysing the correlation between the movement in TCPL and the officially published CPI from January 2019
to January 2022, a very strong relationship with a coefficient correlation of 0.99 was observed and management consequently determined
that from February 2023 going forward CPI can be estimated by adjusting the last published CPI based on the monthly movement of the TCPL.
The conversion factors used to restate the financial statements as at 31 December 2023 are as follows:
Dates
31 Dec 18
31 Dec 19
31 Dec 20
31 Dec 21
31 Dec 22
31 Dec 23
Indices
88.81
551.63
2474.52
3977.46
13672.91
65703.44
Conversion factor
739.8202
119.1078
26.5520
16.5189
4.8054
1.0000
The indices have been applied to the historical costs of transactions and balances as follows:
Tribe28ANNUAL REPORT 2023 34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
• All comparative figures from 31 December 2018 to date have been restated by applying the change in the index to 31 December 2023;
• Income statement transactions have been restated by applying the change in the index from the approximate date of the transactions to
31 December 2023;
• 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
2023;
• 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 2023;
• Equity has been restated by applying the change in index from the date of issue to 31 December 2023;
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.
2.1.1. CPI SENSITIVITY
The Group considered various methodologies in determining the ZWL inflation indices to use for the purposes of preparation of consolidated
inflation adjusted financial statements. The methodologies applied were consistent with those required by International Accounting Standard
(IAS 29) – Financial Reporting in Hyperinflationary Economies. In determining the indices, the group settled on the movement in TCPL as the
best estimate based on the analysis above.
The analysis below seeks to demonstrate the sensitivity of the indices used in preparing hyperinflation accounts.
If the CPI as determined by TCPL for the year increased by 10% and 20%, the effect of the movement on key financial metrics will be as follows
Operating income decrease
Profit for the year decrease
Total assets increase
Total equity and reserves increase
Total liabilities increase
Scenario 1:
Increase by 10%
ZWL ‘000
( 5 346 196)
( 10 992 949)
3 763 814
2 597 896
1 165 917
Scenario 2:
Increase by 20%
ZWL ‘000
( 10 692 393)
( 21 985 898)
7 527 627
5 195 793
2 331 835
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.
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. The consolidated
financial statements are rounded to the nearest dollar.
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.
2.2.
BASIS OF CONSOLIDATION
The consolidated and separate financial statements comprise of the financial statements of the Group and company. All companies in the
Group have a December year end. Inter-group transactions, balances, income and expenses are eliminated on consolidation.
2.2.1. 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.
Tribe28ANNUAL REPORT 2023 35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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.
2.3.
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.
2.4.
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.
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.
2.5.
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
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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) 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.
b) 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).
Initial recognition and measurement
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.
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 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.
Business model: the business model reflects how the Bank manages the assets in order to generate cash flows. That is, whether the Bank’s
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
objective is solely to collect the contractual cash flows taking. These securities are classified in the ‘other’ business model and measured
at FVPL. 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.
Other Financial Assets
The Bank holds other financial assets that are neither cash, debt nor equity instruments, namely ZiG Gold-Backed Digital Tokens (ZiG). These
are a form of digital currency that was introduced by the Reserve Bank of Zimbabwe (RBZ) in October 2023 as a means to increase fungibility
of the gold coins introduced in 2022 by the RBZ. The Bank holds both its own ZiG and on behalf of its customers as part of its custodial services.
In relation to the ZiG held on behalf of customers, the Bank has made a determination that it does not hold control over the Zig in accordance
with the guidance from the Conceptual Framework as it cannot obtain economic benefits flowing from holding the ZiG and has no right to
deploy the ZiG held on behalf of customers in its activities. This therefore means that the ZiG held on behalf of customers does not qualify as
either an asset or a liability in the Bank’s financial statements and it is not disclosed in the Bank’s financial statements.
i. Recognition of ZiG purchased by the Bank
In relation to the ZiG purchased by the Bank, as there is no specific IFRS that directly applies to its classification, recognition and
measurement, according to IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors, management has elected to
recognise it as a financial asset according to IAS 32: Financial Instruments - Presentation. This is because the Bank has a contractual
right to receive cash from the RBZ after a 180 day redemption period.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
ii. Classification and measurement
The ZiG purchased by the bank is classified and measured at Fair Value Through Profit or Loss (FVTPL) as the ZiG does not have an interest
component.
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 Effective Interest Rate (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:
a) significant financial difficulty of the issuer or the borrower;
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;
d) it becoming probable that the borrower will enter bankruptcy or other financial reorganisation;
e) the disappearance of an active market for that financial asset because of financial difficulties; or
f) the purchase or origination of a financial asset at a deep discount that reflects the incurred credit losses.
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.
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.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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.
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.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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) Has no obligation to make payments unless it collects equivalent amounts from the assets;
ii) Is prohibited from selling or pledging the assets; and
iii) 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.
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
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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 2.20 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.
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.
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
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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.
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.
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.
2.6. 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.
2.7.
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.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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.
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.
Computers
Motor Vehicles
Furniture and Equipment
Buildings
Land and capital work-in-progress are not depreciated.
2.8. NON-CURRENT ASSETS HELD FOR SALE
20%
25%
20%
2%
The bank receives collateral from counter-parties in form of immovable property and other approved qualifying collateral as security against
loan advances in the normal course of the business. It is not the intention of the bank to recover loans advanced through collateral disposal,
as the bank will always consider all the options available to recover loans advanced to customers, by considering the borrowers’ changed
circumstances and cash flows and to find out whether restructuring options will result in the customers settling their outstanding obligations
to the bank.
However, in the unlikely event that the bank is left with no option, except to dispose the loan collateral security, and all the formalities have been
completed by the borrower to have the collateral transferred to the bank, such collateral will not become part of the bank’s asset portfolio.
The Bank will initiate the process of disposal of the recovered collateral in order to clear the customer’s outstanding obligations with the bank.
Such immovable properties and the other approved qualifying collateral will be accounted for under Non-current assets held for sale, given
the timing differences between the dates the immovable asset is recovered by the bank and the time it will be finally disposed off.
Initial measurement is the fair value less cost to sell of which the fair values are through a professional valuer. Subsequently the bank will
measure the carrying amount subject to changes in fair value less cost to sale of these assets.
2.9.
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:
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Computer Software
2.10. LEASES
20%
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.
2.11.
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.
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.
2.12.
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.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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.
2.13. 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.
2.14. 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.
2.15. 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 to transaction and service fees, which are expensed as the services are received.
The performance obligations, as well as the timing of their satisfaction, are identified, and determined, at the inception of the contract.
2.16.
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.
2.17.
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.
2.18. 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.
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
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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.
2.19. 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.
2.20. 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.
Treasury shares
Own equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from equity. No gain or loss is recognised
in profit or loss on the purchase, sale, issue or cancellation of the Group’s own equity instruments. Any difference between the carrying amount
and the consideration, if reissued, is recognised in the share premium.
2.21. 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 2023 is included in the following notes.
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. Refer to Note 27 for more information
on the nature and carrying amounts of the Land and Buildings as well as the inputs used.
Investment properties
Investment properties were valued by an independent professional valuer. The properties market is currently not stable due to liquidity
constraints. Refer to Note 25 for more information on the nature and carrying amounts of the Investment Property as well as the inputs used.
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. Refer to Note 2 for more
information on the nature and carrying amounts of the impairment losses on loans and advances as well as the inputs used.
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.
Determination of the functional currency
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
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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 USD with effect from 22 February 2019.
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.
2.22. STANDARDS ISSUED AND EFFECTIVE
a) New standards and amendments – applicable 1 January 2023
The following International Financial Reporting Standards and amendments are effective for the first time for the December 2023 year-end
reporting period
Standard
IFRS 17 Insurance Contracts
Effective Date
1 January 2023
(deferred from 1
January 2021)
Disclosure of Accounting
Policies – Amendments to IAS
1 and IFRS Practice
“
Statement 2”
1 January 2023
Definition of Accounting
Estimates – Amendments to
IAS 8
1 January 2023
Executive Summary
IFRS 17 was issued in May 2017 as replacement for IFRS 4 Insurance Contracts. It requires a current
measurement model where estimates are remeasured in each reporting period. Contracts are
measured using the building blocks of:
- discounted probability-weighted cash flows
- an explicit risk adjustment, and
“- a contractual service margin
the contract which is”
recognised as revenue over the coverage period.
the unearned profit of
representing
(CSM)
The standard allows a choice between recognising changes in discount rates either in the
statement of profit or loss or directly in other comprehensive income. The choice is likely to
reflect how insurers account for their financial assets under IFRS 9.
An optional, simplified premium allocation approach is permitted for the liability for the
remaining coverage for short duration contracts, which are often written by non-life insurers.
There is a modification of the general measurement model called the ‘variable fee approach’
for certain contracts written by life insurers where policyholders share in the returns from
underlying items. When applying the variable fee approach, the entity’s share of the fair value
changes of the underlying items is included in the CSM. The results of insurers using this model
are therefore likely to be less volatile than under the general model.
The new rules will affect the financial statements and key performance indicators of all entities
that issue insurance contracts or investment contracts with discretionary participation features.
Targeted amendments made in July 2020 aimed to ease the implementation of the standard
by reducing implementation costs and making it easier for entities to explain the results from
applying IFRS 17 to investors and others. The amendments also deferred the application date of
IFRS 17 to 1 January 2023.
Further amendments made in December 2021 added a transition option that permits an entity
to apply an optional classification overlay in the comparative period(s) presented on initial
application of IFRS 17. The classification overlay applies to all financial assets, including those
held in respect of activities not connected to contracts within the scope of IFRS 17. It allows those
assets to be classified in the comparative period(s) in a way that aligns with how the entity
expects those assets to be classified on initial application of IFRS 9. The classification can be
applied on an instrument-by-instrument basis.
The group has not applied these amendments as they are not applicable
The IASB amended IAS 1 to require entities to disclose their material rather than their significant
accounting policies. The amendments define what is ‘material accounting policy information’
and explain how to identify when accounting policy information is material. They further clarify
that immaterial accounting policy information does not need to be disclosed. If it is disclosed,
it should not obscure material accounting information.
To support this amendment, the IASB also amended IFRS Practice Statement 2 Making Materiality
Judgements to provide guidance on how to apply the concept of materiality to accounting
policy disclosures.
No significant impact has resulted from these amendments.
The amendment to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
clarifies how companies should distinguish changes in accounting policies from changes in
accounting estimates. The distinction is important, because changes in accounting estimates
are applied prospectively to future transactions and other future events, whereas changes in
accounting policies are generally applied retrospectively to past transactions and other past
events as well as the current period.
No significant impact has resulted from these amendments.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Standard
Deferred Tax related to Assets
and Liabilities arising from a
Single Transaction –
Amendments to IAS 12
Effective Date
1 January 2023
Executive Summary
The amendments to IAS 12 Income Taxes require companies to recognise deferred tax on
transactions that, on initial recognition, give rise to equal amounts of taxable and deductible
temporary differences. They will typically apply to transactions such as leases of lessees and
decommissioning obligations, and will require the recognition of additional deferred tax assets
and liabilities.
The amendment should be applied to transactions that occur on or after the beginning of
the earliest comparative period presented. In addition, entities should recognise deferred tax
assets (to the extent that it is probable that they can be utilised) and deferred tax liabilities
at the beginning of the earliest comparative period for all deductible and taxable temporary
differences associated with:
- right-of-use assets and lease liabilities, and
- decommissioning, restoration and similar liabilities, and the corresponding amounts
recognised as part of the cost of the related assets
The cumulative effect of recognising these adjustments is recognised in retained earnings, or
another component of equity, as appropriate.
IAS 12 did not previously address how to account for the tax effects of on-balance sheet leases
and similar transactions and various approaches were considered acceptable. Some entities
may have already accounted for such transactions consistent with the new requirements.
These entities will not be affected by the amendments.
No significant impact has resulted from these amendments.
Sale or contribution of assets
between an investor and its
associate or joint venture –
Amendments to IFRS 10 and
IAS 28
N/A
The IASB has made limited scope amendments to IFRS 10 Consolidated Financial Statements
and IAS 28 Investments in Associates and Joint Ventures.
The amendments clarify the accounting treatment for sales or contribution of assets between
an investor and their associates or joint ventures. They confirm that the accounting treatment
depends on whether the nonmonetary assets sold or contributed to an associate or joint
venture constitute a ‘business’ (as defined in IFRS 3 Business Combinations).
Where the non-monetary assets constitute a business, the investor will recognise the full gain
or loss on the sale or contribution of assets. If the assets do not meet the definition of a business,
the gain or loss is recognised by the investor only to the extent of the other investor’s interests
in the associate or joint venture. The amendments apply prospectively.
In December 2015, the IASB decided to defer the application date of this amendment until such
time as the IASB has finalised its research project on the equity method.
No significant impact has resulted from these amendments.
b) Forthcoming requirements
The following standards and interpretations had been issued but were not mandatory for the 2023 financial year-end reporting period
Standard
Effective Date
Executive Summary
Classification of Liabilities as
Current or Non-current –
Amendments to IAS 1
1 January 2024 (deferred from 1 January 2023
having been deferred again from 01 January
2022)
Non-current liabilities with
covenants – Amendments to
IAS 1
01 Jan 24
Lease liability in sale and
leaseback – amendments
to IFRS 16
01 Jan 24
The narrow-scope amendments to IAS 1 Presentation of Financial Statements clarify that
liabilities are classified as either current or non-current, depending on the rights that exist at the
end of the reporting period. Classification is unaffected by the entity’s expectations or events
after the reporting date (e.g. the receipt of a waver or a breach of covenant). The amendments
also clarify what IAS 1 means when it refers to the ‘settlement’ of a liability.
The amendments could affect the classification of liabilities, particularly for entities that
previously considered management’s intentions to determine classification and for some
liabilities that can be converted into equity. They must be applied retrospectively in accordance
with the normal requirements in IAS 8 Accounting Policies, Changes in Accounting Estimates
and Errors. Since issuing these amendments, the IASB issued an exposure draft proposing
further changes and the deferral of the amendments until at least 1 January 2024.
The Group plans to adopt the amendments when they become effective. No significant impact
has resulted from these amendments in the current year.
Amendments made to IAS 1 Presentation of Financial Statements in 2020 clarified that liabilities
are classified as either current or non-current, depending on the rights that exist at the end of
the reporting period. Classification is unaffected by the entity’s expectations or events after the
reporting date (e.g. the receipt of a waiver or a breach of covenant). The amendments also
clarified what IAS 1 means when it refers to the ‘settlement’ of a liability. The amendments were
due to be applied from 1 January 2022. However, the effective date was subsequently deferred
to 1 January 2023 and then further to 1 January 2024. In October 2022, the IASB made further
amendments to IAS 1 in response to concerns raised about these changes to the classification
of liabilities as current or non-current. The new amendments clarify that covenants of loan
arrangements will not affect classification of a liability as current or non-current at the reporting
date if the entity must only comply with the covenants after the reporting date. However, if
the entity must comply with a covenant either before or at the reporting date, this will affect
the classification as current or non-current, even if the covenant is only tested for compliance
after the reporting date. The amendments require disclosures if an entity classifies a liability as
noncurrent and that liability is subject to covenants that the entity must comply with within 12
months of the reporting date. The disclosures include:
• the carrying amount of the liability
• information about the covenants, and
• facts and circumstances, if any, that indicate that the entity may have difficulty complying
with the covenants.
The amendments must be applied retrospectively in accordance with the normal requirements
in IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. Special transitional
rules apply if an entity had early adopted the 2020 amendments regarding the classification of
liabilities as current or noncurrent
The Group plans to adopt the amendments when they become effective. No significant impact
has resulted from these amendments in the current year.
In September 2022, the IASB finalised narrow-scope amendments to the requirements for sale
and leaseback transactions in IFRS 16 Leases which explain how an entity accounts for a sale
and leaseback after the date of the transaction.
The amendments specify that, in measuring the lease liability subsequent to the sale and
leaseback, the seller-lessee determines ‘lease payments’ and ‘revised lease payments’ in a way
that does not result in the seller-lessee recognising any amount of the gain or loss that relates
to the right of use that it retains. This could particularly impact sale and leaseback transactions
where the lease payments include variable payments that do not depend on an index or a rate.
The Group plans to adopt the amendments when they become effective. No significant impact
has resulted from these amendments in the current year.
Tribe28ANNUAL REPORT 2023 49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Standard
Sale or contribution of assets
between an investor and its
associate or joint venture –
Amendments to IFRS 10 and
IAS 28
Effective Date
N/A
Executive Summary
The IASB has made limited scope amendments to IFRS 10 Consolidated Financial Statements
and IAS 28 Investments in Associates and Joint Ventures.
The amendments clarify the accounting treatment for sales or contribution of assets between
an investor and their associates or joint ventures. They confirm that the accounting treatment
depends on whether the non-monetary assets sold or contributed to an associate or joint
venture constitute a ‘business’ (as defined in IFRS 3 Business Combinations).
Where the non-monetary assets constitute a business, the investor will recognise the full gain
or loss on the sale or contribution of assets. If the assets do not meet the definition of a business,
the gain or loss is recognised by the investor only to the extent of the other investor’s interests in
the associate or joint venture. The amendments apply prospectively. *** In December 2015, the
IASB decided to defer the application date of this amendment until such time as the IASB has
finalised its research project on the equity method.
The Group plans to adopt the amendments when they become effective. No significant impact
has resulted from these amendments in the current year.
For management purposes, the Group is organised into six operating segments based on products and services as follows:
Retail banking
Corporate banking
Treasury
Microfinance
Real Estate
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 microlending business
Development of investment properties for sale & rental purposes
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 2022
or 2023.
3. INTEREST REVENUE CALCULATED USING THE EFFECTIVE INTEREST METHOD
Loans and advances to banks
Loans and advances to customers
Investment securities
Inflation Adjusted
Historical Cost*
2023
ZWL’000
2022
ZWL’000
2023
ZWL’000
2022
ZWL’000
6 996 811
4 961 860
113 263 276
83 882 979
7 681 853
12 406 441
4 269 319
63 917 891
3 889 686
959 558
13 085 358
1 755 252
127 941 940
101 251 280
72 076 896
15 800 168
Tribe28ANNUAL REPORT 2023 50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4. INTEREST EXPENSE CALCULATED USING THE EFFECTIVE INTEREST METHOD
Due to banks
Due to customers
Other borrowed funds
Lease liability finance costs*
Inflation Adjusted
Historical Cost*
2023
ZWL’000
2022
ZWL’000
2023
ZWL’000
2022
ZWL’000
12 411 109
4 716 906
11 388 705
28 516 720
22 761 602
6 364 664
591 987
5 086 846
3 578 448
2 761 455
6 170 785
742 178
157 325
29 718 253
14 019 086
4 477 951
1 207 406
927 096
631 994
29 724 126
30 645 349
14 651 080
113 431
4 591 382
* Finance costs related to the lease liability do not represent the cost of funding the loan book.
5. NON-INTEREST INCOME AND OTHER COMPREHENSIVE INCOME
5.1. Fees and commission income
Retail banking customer fees
Corporate banking credit related fees
Financial guarantee fees
International banking commissions
Digital banking fees
Timing of revenue recognition:
- At a point in time
- Over time
5.2. Net Foreign Exchange Gains
Inflation Adjusted
Historical Cost*
2023
ZWL’000
2022
ZWL’000
2023
ZWL’000
2022
ZWL’000
139 334 717
25 659 780
86 521 475
4 053 093
4 611 651
14 212 709
3 832 761
2 914 968
5 291 278
3 252 814
2 359 782
8 156 489
2 136 901
420 603
828 010
370 984
66 870 794
36 612 363
38 581 874
5 032 826
228 862 632
73 731 203
137 756 521
10 705 516
224 250 981
70 816 235
135 396 739
4 611 651
2 914 968
2 359 782
10 284 913
420 603
228 862 632
73 731 203
137 756 521
10 705 516
Inflation Adjusted
Historical Cost*
2023
ZWL’000
2022
ZWL’000
2023
ZWL’000
2022
ZWL’000
Foreign exchange gains relating to revaluation of gold tokens
15 280 530
-
15 194 985
Net exchange gains on foreign currency denominated assets and liablities
112 856 589
18 351 775
121 120 664
128 137 119
18 351 775
136 315 649
-
4 048 384
4 048 384
5.3. Other Income
GROUP
Fair value gains on investment properties
Profit on disposal of property and equipment
(Loss)/ profit on disposal of investment properties
Rental income
Recoveries
Auction proceeds
Other operating income
Inflation Adjusted
Historical Cost
2023
ZWL’000
2022
ZWL’000
2023
ZWL’000
2022
ZWL’000
142 186 115
32 823 582
236 921 078
16 380 730
263 762
( 81 046)
1 823 407
16 363
11 032 948
2 873 551
6 800
( 164 113)
444 636
40 759
-
5 651 914
126 465
254 724
1 104 392
8 147
8 230 318
2 605 591
1 803
26 722
95 645
5 894
-
1 429 541
158 115 100
38 803 578
249 250 716
17 940 335
Tribe28ANNUAL REPORT 2023 51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
COMPANY
Inflation Adjusted
Historical Cost
Dividend income
Other operating income
5.4. Other comprehensive income
2023
ZWL’000
-
-
-
2022
ZWL’000
1 441 612
12 075
1 453 687
2023
ZWL’000
-
-
-
2022
ZWL’000
300 000
2 410
302 410
Inflation Adjusted
Historical Cost*
2023
ZWL’000
2022
ZWL’000
2023
ZWL’000
2022
ZWL’000
Revaluations of land and buildings
Tax effect
71 020 585
3 431 256
110 945 505
7 749 051
( 19 053 154)
( 848 206)
( 28 545 698)
( 1 915 366)
51 967 431
2 583 050
82 399 807
5 833 685
6. OPERATING EXPENDITURE
The net operating income is after charging the following:
Administration costs
Audit fees:
- Current year
Amortisation of intangible assets
Depreciation (excluding right of use assets)
Depreciation – right of use assets
Directors’ remuneration
- Fees for services as directors
- Expenses
Inflation Adjusted
Historical Cost*
2023
ZWL’000
2022
ZWL’000
2023
ZWL’000
2022
ZWL’000
102 318 273
32 493 180
67 124 614
4 826 405
1 686 863
1 386 126
5 473 365
2 856 869
2 764 568
2 579 870
184 698
764 669
1 392 072
2 926 114
1 259 745
845 344
793 175
52 170
893 858
6 094
1 559 712
458 700
1 622 313
1 524 283
98 030
114 704
4 395
222 437
71 926
129 973
122 188
7 785
Staff costs – salaries, allowances and related costs*
100 292 702
51 635 670
59 067 547
8 364 152
** Included in Staff costs - salaries, allowances and related costs are employee benefit costs relating share based payments amounting to
ZWL 229 681 525 (2022: ZWL1 222 247 843).
216 778 764
91 316 794
130 732 838
13 733 992
7. TAXATION
7.1.
Income Tax Charge
Current tax
Deferred tax
COMPANY
Income Tax Charge
Current tax
Deferred tax
Inflation Adjusted
Historical Cost*
2023
ZWL’000
2022
ZWL’000
2023
ZWL’000
2022
ZWL’000
23 892 993
10 694 724
23 892 994
22 817 867
8 856 137
25 601 618
2 225 576
1 283 554
46 710 860
19 550 861
49 494 612
3 509 130
Inflation Adjusted
Historical Cost*
2023
ZWL’000
2022
ZWL’000
2023
ZWL’000
2022
ZWL’000
-
0
0
-
286
286
-
-
-
-
14
14
Tribe28ANNUAL REPORT 2023
52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
7.2.
Reconciliation of income tax charge/(credit)
Based on results for the period at a rate of 24.72% (2022:24.72%)
79 682 754
19 090 423
107 545 467
7 163 272
Inflation Adjusted
Historical Cost*
2023
ZWL’000
2022
ZWL’000
2023
ZWL’000
2022
ZWL’000
Tax effect of:
- Income not subject to tax*
- Non-deductible expenses**
- Effect of exchange rate movements
- Change in tax bases***
( 375 334 477)
( 10 317 853)
( 115 736 184)
272 580 554
41 457 641
69 782 028
51 778 167
5 907 162
( 979 237)
3 709 480
-
( 30 679 350)
-
( 6 384 384)
46 710 860
19 550 861
49 494 612
3 509 130
COMPANY
Inflation Adjusted
Historical Cost*
2023
ZWL’000
2022
ZWL’000
2023
ZWL’000
2022
ZWL’000
Based on results for the period at a rate of 24.72%
( 99 209)
359 640
( 64 326)
74 756
Tax effect of:
- Other movements in temporary differences
- Non-deductible expenses**
-
-
-
14
99 209
( 359 354)
64 326
( 74 756)
0
286
-
14
* 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 2020.
7.3. Current tax liabilities / (assets)
At 1 January
Monetary adjustment
Effect of exchange rate movement
Charge for the year
Payments during the year
Inflation Adjusted
Historical Cost*
2023
ZWL’000
2022
ZWL’000
2023
ZWL’000
2022
ZWL’000
( 211 665)
3 899 273
( 44 049)
236 049
9 962 658
( 1 390 901)
-
( 9 249 281)
836 241
( 4 174 873)
23 892 994
10 694 724
23 892 994
-
( 33 170)
2 225 576
( 20 287 014)
( 14 251 002)
( 15 566 380)
( 2 472 504)
4 107 692
( 211 665)
4 107 692
( 44 049)
COMPANY
Inflation Adjusted
Historical Cost*
At 1 January
Monetary adjustment
8. EARNINGS PER SHARE
2023
ZWL’000
( 363)
287
2022
ZWL’000
( 1 247)
884
2023
ZWL’000
2022
ZWL’000
( 77)
-
( 77)
-
( 76)
( 363)
( 77)
( 77)
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.
Tribe28ANNUAL REPORT 2023 53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
8.1. Earnings
Profit for the year
Headline earnings for the period
275 630 378
57 675 767
385 559 866
25 468 506
163 890 250
28 567 343
205 178 372
12 055 490
Inflation Adjusted
Historical Cost*
2023
ZWL’000
2022
ZWL’000
2023
ZWL’000
2022
ZWL’000
8.2. Number of shares
8.2.1. Basic earnings per share
Weighted average number of ordinary shares for basic earnings per share
Number of shares at beginning of period
398 195 181
404 157 689
398 195 181
404 157 689
Inflation Adjusted
Historical Cost*
2023
2022
2023
2022
Share options exercised
Shares issued - scrip dividend
Share buy back
8.2.2. Diluted earnings per share
Number of shares for basic earnings
Effect of dilution:
3 643
13 529 471
176 402
1 999 625
3 643
13 529 471
176 402
1 999 625
( 787 748)
( 8 138 536)
( 787 748)
( 8 138 536)
410 940 547
398 195 181
410 940 547
398 195 181
Inflation Adjusted
Historical Cost*
2023
2022
2023
2022
410 940 547
398 195 181
410 940 547
398 195 181
Share options approved but not granted (ESOS)
4 211 471
10 141 568
4 211 471
10 141 568
8.2.3. Headline earnings
Profit for the period
Add/(deduct) non-recurring items
Trade and other investments fair value gains
Fair value gains on investment property
Profit on disposal of property and equipment
Non - recurring sundry income
415 152 018
408 336 749
415 152 018
408 336 749
Inflation Adjusted
Historical Cost*
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
275 630 378
57 675 767
385 559 866
25 468 506
( 6 063 858)
( 283 695)
( 2 311 833)
( 218 556)
( 142 186 115)
( 32 823 582)
( 236 921 078)
( 16 380 730)
( 263 762)
( 6 800)
( 126 465)
-
( 5 716 912)
-
( 1 803)
( 1 189 691)
( 26 722)
Loss/(profit) on disposal of investment properties
81 046
164 113
( 254 724)
Tax effect thereon
36 692 561
9 558 452
59 232 605
4 404 487
Headline earnings is a non-IFRS performance measure and the Group has determined it in accordance with ZSE Listing Requirements.
163 890 250
28 567 343
205 178 372
12 055 490
8.3.
Earnings per share (ZWL cents)
Basic
Diluted
Headline
Inflation Adjusted
Historical Cost*
2023
ZWL
67 073
66 393
39 203
2022
ZWL
14 484
14 125
6 996
2023
ZWL
93 824
92 872
49 422
2022
ZWL
6 396
6 237
2 952
Tribe28ANNUAL REPORT 2023 54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
9. SHARE CAPITAL
9.1. Authorised
Ordinary shares of ZWL 0.00028 each
600 000
600 000
168
168
Inflation Adjusted
Historical Cost*
31 Dec 2023
Shares
thousands
31 Dec 2022
Shares
thousands
31 Dec 2023
ZWL ‘000
31 Dec 2022
ZWL ‘000
9.2.
Issues and fully paid
9.2.1. Ordinary shares
Balance at 01 January
Share options exercised
Share buy back
Redeemable ordinary shares
Shares issued – scrip dividend
Inflation Adjusted
31 Dec 2023
Shares
thousands
31 Dec 2022
Shares
thousands
31 Dec 2023
ZWL ‘000
31 Dec 2022
ZWL ‘000
404 315
300 000
95 149
94 916
44
31 891
-
( 846)
176
( 8 000)
104 000
8 139
23
( 0)
-
-
1
11
221
-
Balance at 31 December
435 403
404 315
95 172
95 149
Historical Cost*
31 Dec 2023
Shares
thousands
31 Dec 2022
Shares
thousands
31 Dec 2023
ZWL ‘000
31 Dec 2022
ZWL ‘000
Balance at 01 January
Share options exercised
Share buy back
Redeemable ordinary shares
Shares issued – scrip dividend
404 315
300 000
44
31 891
-
( 846)
176
( 8 000)
104 000
8 139
Balance at 31 December
435 403
404 315
115
9
( 0)
-
-
124
84
0
2
29
-
115
Of the unissued ordinary shares of 165 million shares (2022 - 196 million), options which may be granted in terms of the 2024 ESOS amount to
13 684 418 (2022 – 10 141 568).
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.
10. CAPITAL RESERVES
GROUP
Share premium
Treasury shares
Share option reserve
Revaluation reserve
Inflation Adjusted
Historical Cost*
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
26 793 275
20 906 488
( 2 046)
1 541 282
( 2 046)
1 236 145
3 174 723
( 394)
359 242
2022
ZWL ‘000
172 496
( 394)
129 569
78 520 998
26 553 568
90 149 489
7 749 682
Functional currency translation reserve
106 853 509
48 694 155
93 683 060
7 634 508
7 634 508
11 620
8 051 352
11 620
Total capital reserve
114 488 017
56 328 663
93 694 680
8 062 972
10.1. Nature and purpose of reserves
10.2. Share premium
This reserve represents the excess amount paid for the shares over and above the nominal value of the shares.
Tribe28ANNUAL REPORT 2023 55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
10.3. 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 32.3 for further details of these plans.
10.4. 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 when
the functional currency was changed in 2019.
10.5. Revaluation reserve
The Reserve represent gains on the revaluation of land and buildings.
10.6. Treasury shares reserve
This reserve records ordinary shares held by the holding company and its subsidiaries. The shares are recorded at the cost at which they were
acquired. As at 31 December 2023 the Group held 8 152 534 (2022: 8 152 534) of its own shares.
11. SUBORDINATED LOAN
At 1 January
Monetary adjustment
Exchange revaluation
Inflation Adjusted
Historical Cost*
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
4 451 329
3 685 623
926 323
( 3 525 006)
( 5 371 200)
-
223 115
-
6 261 805
6 136 907
6 261 805
703 208
7 188 128
4 451 329
7 188 128
926 323
In 2013, the Bank received a subordinated term loan amounting to USD1.4 million from a Development Financial Institution which currently
attracts interest rate based on the Secured Overnight Accommodation Rate (SOFR). The loan had a maturity date of June 2020.The Group
defaulted on 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. Consequently, the Group registered it as a legacy debt together with other offshore lines of
credit and transferred the ZWL equivalent of these debts at a rate of USD /ZWL1:1 to the RBZ in terms of the RBZ directive. The Reserve Bank of
Zimbabwe issued Treasury Bills worth USD 1 400 000 in settlement of this loan, which are in the custody of the bank. The Treasury Bills have a
0% coupon rate and a three-year maturity profile.
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.
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 2023.
12. TOTAL SHAREHOLDERS’ FUNDS AND SHAREHOLDERS’ LIABILITIES
GROUP
Inflation Adjusted
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
Shareholders’ funds and shareholders’ liabilities
538 627 403
209 462 226
512 648 439
39 155 092
COMPANY
Inflation Adjusted
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
Shareholders’ funds and shareholders’ liabilities
34 270 828
35 689 331
( 776 199)
213 442
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 9), capital and reserves (refer to Note 10), functional currency translation reserve (refer to Note 10), retained earnings and
the subordinated loan (refer to Note 11).
Tribe28ANNUAL REPORT 2023 56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
13. DEPOSITS
13.1. Deposits and current accounts from customers
Current and deposit accounts from customers
528 530 915
255 718 976
528 530 915
53 215 217
Inflation Adjusted
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
13.2. 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
Inflation Adjusted
Historical Cost
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
495 482 422
219 942 328
495 482 422
45 770 082
20 990 436
31 203 965
20 990 436
6 493 557
1 732 600
3 393
1 732 600
1 892
4 454 999
1 892
10 323 565
114 291
10 323 565
-
-
-
706
927 087
23 785
-
528 530 915
255 718 976
528 530 915
53 215 217
The maturity analysis covers the Group’s total deposits only and does not include other trade payables.
13.3. Sectoral analysis of deposits
Agriculture
Banks and other financial institutions
Distribution
Individuals
Manufacturing
Mining companies
Municipalities and parastatals
Services
Transport and telecommunications
14. OTHER LIABILITIES
Inflation Adjusted
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
70 094 255
33 913 680
70 094 255
44 069 266
26 436 401
44 069 266
93 929 202
54 395 906
93 929 202
43 055 920
20 831 735
43 055 920
55 870 725
18 498 582
70 733 934
27 031 918
55 870 725
-
18 498 582
29 108 801
70 733 934
82 951 542
40 134 423
82 951 542
49 327 490
23 866 112
49 327 490
7 057 450
5 501 425
11 319 809
4 335 092
5 625 352
-
6 057 553
8 351 989
4 966 546
528 530 915
255 718 976
528 530 915
53 215 217
Inflation Adjusted
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
Trade and other liabilities*
99 339 523
56 665 849
97 909 352
11 792 185
COMPANY
Inflation Adjusted
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
Trade and other liabilities*
1 165 457
1 407
1 165 751
294
*The carrying amounts of current accounts and trade and other payables approximate the related fair values due to their short term nature.
These relate to the Group and Company’s operational liabilities to suppliers, employees and regulators. Expense provisions and deferred
income are also included. 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 lease. Also included in trade and other liabilities are ECL provisions in respect of guarantees and facilities approved but
not drawn down.
1 165 457
1 407
1 165 751
294
Tribe28ANNUAL REPORT 2023 57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15. LEASE LIABILITIES
At 1 January
Monetary adjustment
Remeasurements
Finance costs accrual
Payment of lease liabilities
16. BORROWINGS
Banks and financial institutions
Offshore borrowings
Other institutions
Inflation Adjusted
Historical Cost*
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
1 761 246
1 601 064
366 516
96 923
-
( 3 764 255)
-
( 520 335 655)
5 135 584
( 521 890 197)
338 611
34 406
338 611
-
446 036
7 160
( 3 694 925)
( 1 245 553)
( 2 140 382)
( 183 603)
( 521 930 723)
1 761 246
( 523 325 453)
366 516
Inflation Adjusted
Historical Cost*
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
27 694 383
2 883 224
27 694 383
600 000
235 594 934
91 668 598
235 594 934
19 076 270
-
7 688 500
-
263 289 317
102 240 322
263 289 317
1 599 980
21 276 250
Opening balances of borrowings
102 240 322
97 702 728
21 276 250
5 914 585
Loans raised
Repayments made
270 808 081
75 408 345
258 697 770
15 684 059
( 28 795 014)
( 1 589 812)
( 16 684 703)
( 322 394)
Monetary effect of exchange rate
( 80 964 072)
( 69 280 939)
-
-
Closing balance
263 289 317
102 240 322
263 289 317
21 276 250
*Included in Offshore borrowings are loan balances of ZWL 42 328 291 405 (2022 ZWL27 110 714 075), ZWL7 188 127 720 (2022 ZWL4 603 871 704)
and ZWL 22 513 148 622 (2022 ZWL15 178 274 427) due to Nederlandse Financierings-Maatschappij Voor Ontiwikkelingslanden (FMO), Norfund
and Swedfund respectively. These loans, together with the subordinated debt referred to in note 10, form the Group’s Blocked Funds which were
registered with the Reserve Bank of Zimbabwe (RBZ) for an orderly expunging of the debts. In 2021, the Government of Zimbabwe assumed the
obligation to settle these Blocked Funds in terms of Part XIII of the Finance Act No. 7 of 2021 under section 52. The Blocked funds are listed under
Annex 1 of the Finance Act no 7 of 2021. The Bank holds, on behalf of the funders, USD11,640,413 (2022: USD11,640,413) worth of Treasury Bills with
various tenors ranging from three years to twenty years. The Treasury bills have 0% coupon.
The line of credit balances have been translated at 31 December 2023 at the closing rate of USD/ZWL of 6104.7226
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 2023.
17. INVESTMENT SECURITIES
Amortised cost – Gross
Acquisitions
Monetary adjustment
Impairment allowance – Stage 1
Inflation Adjusted
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
80 510 025
66 248 154
16 754 166
346 421 331
111 214 749
132 072 378
( 277 770 210)
( 96 952 878)
-
( 505 537)
-
( 170 935)
4 010 434
12 743 732
-
-
148 655 609
80 510 025
148 655 609
16 754 166
The Group holds Treasury Bills and Government Bonds amounting to ZWL 157 401 307( 2022 - ZWL 80 510 027 000) with interest rates ranging
from 0% 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 this
amount a total of ZWL 71 701 240 139 (2022: ZWL 31 714 585 779) are with respect to blocked funds.
Included in interest income is interest from Investment securities held by the Bank
Interest income from investment securities
7 681 853
12 406 441
1 755 252
1 755 252
Inflation Adjusted
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
Tribe28ANNUAL REPORT 2023 58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
17.1.
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:
Level 2:
Level 3:
Inputs that are quoted market prices (unadjusted) in active markets for identical instruments;
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
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 2023 and 31 December 2022, 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
2023
ZWL ‘000
Level 1
ZWL ‘000
Level 2
ZWL ‘000
Level 3
ZWL ‘000
Trade and other investments
2 566 889
-
-
2 566 889
Inflation Adjusted
2022
ZWL ‘000
Level 1
ZWL ‘000
Level 2
ZWL ‘000
Level 3
ZWL ‘000
Trade and other investments
1 225 641
-
-
1 225 641
Trade and other investments
2 566 889
-
-
2 566 889
Historical Cost*
2023
ZWL ‘000
Level 1
ZWL ‘000
Level 2
ZWL ‘000
Level 3
ZWL ‘000
Trade and other investments
255 056
-
-
255 056
Historical Cost*
2022
ZWL ‘000
Level 1
ZWL ‘000
Level 2
ZWL ‘000
Level 3
ZWL ‘000
Tribe28ANNUAL REPORT 2023
59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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.
Assets
Cash and cash equivalents
RBZ digital tokens
Loans, advances and other accounts
Investment securities
Total
Liabilities
Inflation Adjusted
Historical Cost*
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
352 383 289
103 502 091
352 383 289
21 538 825
19 567 202
-
19 567 202
-
494 536 518
222 417 933
494 536 518
46 285 257
148 655 609
80 510 025
148 655 609
16 754 166
1 015 142 618
406 430 049
1 015 142 618
84 578 248
Deposits and other liabilities
528 530 915
255 718 976
528 530 915
53 215 217
528 530 915
255 718 976
528 530 915
53 215 217
Cash and cash equivalents
Cash and cash equivalents consists of balances with the Central Bank, other banks and cash on hand 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
The 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 Non negotiable certificate of deposits with the Government (government
bonds). There is currently no observable active market for these instruments; or a reliable proxy to discount the expected future cash flows.
Treasury bills are denominated in both USD and ZWL, whilst the Non-negotiable certificate of deposits (NNCDs) are in ZWL only. 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.
Trade and other investments
These are equity investments held by the Group in a third part entity. There is currently no observable active market for these equities or
a reliable proxy to discount the expected future cash flows. In performing this assessment, Directors have determined that interest rates
are consistent with the latest transactions that the Group entered into. The issuer advises the Group of the equities’ value and this value is
significantly unobservable as the equities are not traded on an active market. The fair value would therefore, increase or decrease depending
on the movements in the issuer’s net carrying assets value.
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.
Tribe28ANNUAL REPORT 2023 60
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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
Inflation Adjusted
Historical Cost
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
Allowance for impairment losses on financial assets
( 4 264 452)
( 2 077 863)
( 4 264 452)
( 432 404)
Prepayments and other assets
Lease liabilities
Right of use assets
Intangible assets
Staff loans IFRS 9 adjustments
Quoted and other investments
Investment properties
Property and equipment
Deferred income
Staff loans IFRS 9 Fair value adjustment
Provisions
-
-
( 1 106 874)
( 170 234)
699 917
( 1 250 142)
1 354 333
869 020
108 025
128 344
( 401 865)
( 818 038)
252 806
-
714 547
61 282
322 929
4 391
108 025
128 344
37 374 629
11 626 959
36 576 452
38 828 131
20 984 440
31 481 732
( 573 967)
( 68 708)
( 72 773)
( 205 698)
( 655 028)
( 68 708)
52 609
-
148 698
12 753
2 419 575
2 827 202
( 15 159)
( 136 312)
( 4 854 172)
( 3 517 956)
( 4 854 186)
( 732 088)
Closing deferred tax liabilities/(assets)
68 350 958
26 096 511
58 121 956
3 974 639
Opening balance at 1 January
26 049 115
16 392 168
3 974 639
775 720
Current year charge/(credit)
Relating to profit or loss
Relating to other comprehensive income
42 301 843
22 817 867
19 053 154
9 704 343
8 856 137
848 206
54 147 317
25 601 618
28 545 698
3 198 919
1 283 553
1 915 366
COMPANY
Inflation Adjusted
Historical Cost*
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
Group Companies
Assessed losses
Provisions
-
( 48)
( 19)
-
( 48)
( 19)
Closing deferred tax liabilities/(assets)
( 67)
( 67)
Opening balance at 1 January
( 67)
( 221)
Current year charge/(credit)
Relating to profit or loss (note 8.1)
Relating to other comprehensive income (note 5.3)
19. CASH AND CASH EQUIVALENTS
( 0)
0
-
154
286
( 286)
-
( 10)
( 4)
( 14)
( 14)
-
( 14)
-
-
( 10)
( 4)
( 14)
( 14)
-
( 14)
-
GROUP
Inflation Adjusted
Historical Cost
Balances with the Central Bank**
Current, nostro accounts* and cash
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
183 863 825
33 264 618
183 863 825
156 019 464
59 909 025
156 019 464
6 922 379
12 467 091
-
Interbank placements
12 500 000
10 328 448
12 500 000
2 149 354
COMPANY
Cash
352 383 289
103 502 091
352 383 289
21 538 825
Inflation Adjusted
Historical Cost
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
14
14
66
66
14
14
14
14
Tribe28ANNUAL REPORT 2023 61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
* 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 AND ADVANCES
Fixed term loans – Corporate
Fixed term loans – Retail
Mortgages
Overdrafts
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
Inflation Adjusted
Historical Cost*
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
354 661 582
175 275 689
354 661 582
36 474 938
137 700 082
44 533 867
137 700 082
2 023 457
2 554 699
2 023 457
151 397
53 678
151 397
9 267 515
531 634
11 170
494 536 518
222 417 933
494 536 518
46 285 257
Inflation Adjusted
Historical Cost*
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
109 013 886
36 821 057
109 013 886
7 662 476
131 282 566
83 929 807
131 282 566
17 465 825
10 367 237
8 360 477
10 367 237
61 752 699
62 535 977
61 752 699
1 739 818
13 013 761
182 120 129
209 644 128
182 120 129
43 627 023
-
-
-
-
494 536 518
401 291 446
494 536 518
83 508 903
Allowances for impairment losses on loans and advance
( 22 150 186)
( 7 705 906)
( 16 564 987)
( 1 603 602)
ECL at 1 January
Monetary adjustment
ECL charged through profit or loss
Bad debts written off
( 7 705 906)
( 6 809 262)
( 1 603 602)
( 412 209)
( 6 288 896)
4 828 444
-
-
( 8 394 325)
( 7 321 424)
( 15 111 136)
( 1 523 591)
238 941
1 596 336
149 752
332 198
Suspended interest on credit impaired financial assets
-
-
-
-
472 386 332
393 585 540
477 971 531
81 905 301
Other assets
54 416 950
42 492 142
51 698 826
8 504 329
COMPANY
Other assets
526 803 282
436 077 682
529 670 358
90 409 630
Inflation Adjusted
Historical Cost
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
2 417
259 746
2 417
54 053
2 417
259 746
2 417
54 053
The Bank is continuing recovery efforts in respect of loans written off in the year under review amounting to ZWL 238 941 264 (2022: ZWL 5 011
864 901).
Tribe28ANNUAL REPORT 2023 62
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20.2. Sectoral analysis of utilisations
GROUP
Inflated Adjusted
Agriculture
Conglomerates
Distribution
Food & Beverages
Individuals
Manufacturing
Mining
Services and other
Agriculture
Conglomerates
Distribution
Food & Beverages
Individuals
Manufacturing
Mining
Services and other
2023
ZWL ‘000
155 402 077
13 207 093
62 710 392
11 117 068
82 222 045
59 406 635
31 950 646
78,520,561
%
31%
3%
13%
2%
17%
12%
6%
16%
2022
ZWL ‘000
58 842 011
-
45 975 312
-
39 068 155
8 166 016
4 772 187
65 594 252
%
26%
0%
21%
0%
18%
4%
2%
29%
494 536 518
100%
222 417 933
100%
2023
ZWL ‘000
155 402 077
13 207 093
62 710 392
11 117 068
82 222 045
59 406 635
31 950 646
78 520 561
Historical Cost*
%
31%
3%
13%
2%
17%
12%
6%
16%
2022
ZWL ‘000
12 245 045
-
9 567 480
-
8 130 098
1 699 351
993 094
13 650 189
%
26%
0%
21%
0%
18%
4%
2%
29%
494 536 518
100%
46 285 257
100%
The material concentration of loans and advances is with Agriculture at 30% (2022 - 26%).
Tribe28ANNUAL REPORT 2023 63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20.3.
Impairment analysis of financial assets measured at amortised cost
Gross carrying amount at 1 January 2023
Monetary adjustment
Transfers
- to 12 months to ECL
- to lifetime ECL not credit impaired
- to lifetime ECL credit impaired
Inflation Adjusted
Stage 1
ZWL ‘000
Stage 2
ZWL ‘000
Stage 3
ZWL ‘000
Total
ZWL ‘000
257 264 901
5 859 350
2 508 049
265 632 300
( 203 727 977)
( 4 640 017)
( 1 986 123)
( 210 354 117)
( 1 745 461)
113 039
( 1 205 043)
( 653 457)
1 131 696
( 19 387)
1 205 333
( 54 250)
613 765
( 93 652)
( 289)
707 706
-
-
1
( 1)
Net movement in financial assets
486 297 333
19 614 553
5 127 683
511 039 569
Balance as at 31 December 2023
538 088 796
21 965 582
6 263 374
566 317 752
Loss allowance analysis
At 1 January 2022
- ECL – Loans, advances & guarantees
- 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
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
-
( 1)
-
4 474 160
4 232 555
( 51 593)
469 127
( 175 929)
2 239 701
2 255 542
-
3 332
( 19 173)
1 691 733
1 668 142
-
75 310
( 51 719)
-
-
-
( 27 900)
185 942
( 150 287)
( 63 556)
5 270 612
5 122 491
130 420
17 700
-
-
135 916
( 11 091)
150 474
( 3 466)
4 560
4 560
-
-
-
-
-
( 108 016)
( 174 851)
( 187)
67 022
3 119 153
2 880 212
-
-
-
8 405 594
8 156 239
( 51 593)
547 769
( 246 821)
-
0
-
0
-
8 394 325
8 007 264
130 420
17 700
-
238 941
238 941
-
-
Balance as at 31 December 2023
9 716 871
2 380 178
4 463 929
16 560 978
Loans and advances
Guarantees and facilities approved not …drawn down
Investment securities
Interbank placements
9 327 146
78 827
486 827
( 175 929)
2 396 019
4 440 338
16 163 503
-
3 332
( 19 173)
-
75 310
( 51 719)
78 827
565 469
( 246 821)
9 716 871
2 380 178
4 463 929
16 560 978
Tribe28ANNUAL REPORT 2023 64
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Gross carrying amount at 1 January 2022
Monetary adjustment
Transfers
- to 12 months to ECL
- to lifetime ECL not credit impaired
- to lifetime ECL credit impaired
Inflation Adjusted
Stage 1
ZWL ‘000
Stage 2
ZWL ‘000
Stage 3
ZWL ‘000
Total
ZWL ‘000
205 768 786
3 139 874
2 204 354
211 113 014
( 139 706 783)
( 3 739)
( 1 530 689)
( 141 241 211)
( 2 611 211)
673 084
( 2 982 479)
( 301 816)
2 211 486
( 637 923)
2 990 975
( 141 566)
399 725
( 35 161)
( 8 496)
443 382
-
-
-
-
Net movement in financial assets
193 814 109
511 729
1 434 659
195 760 497
Balance as at 31 December 2022
257 264 901
5 859 350
2 508 049
265 632 300
Loss allowance analysis
At 1 January 2021
- ECL – Loans, advances & guarantees
- 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
Net increase/(decrease) in ECL
Loans and advances
Guarantees and facilities approved not drawn down
Investment securities
Interbank placements
Bad debts written off
2 572 294
1 382 074
5 614 479
5 367 890
( 124 747)
247 035
124 301
( 77 452)
74 642
( 148 303)
( 3 791)
319 207
324 192
73 152
222 093
( 300 230)
-
300 547
300 547
894 232
894 232
6 809 258
6 562 669
( 124 747)
247 035
124 301
3 954 368
-
-
-
-
1 596 336
1 593 571
73 152
300 735
( 371 122)
-
( 3 954 368)
-
-
-
-
( 8 339)
( 14 330)
( 5 200)
11 191
805 840
782 249
-
75 310
( 51 719)
-
-
-
-
-
85 791
( 60 312)
153 503
( 7 400)
471 289
487 130
-
3 332
( 19 173)
-
-
Revaluation exchange on loans and advances ECL
( 3 954 368)
Balance as at 31 December 2022
4 474 160
2 239 701
1 691 733
8 405 594
Loans and advances
Guarantees and facilities approved not drawn down
Investment securities
Interbank placements
20.4. Loans to officers and executive directors
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
4 232 555
2 255 542
1 668 142
( 51 593)
469 127
( 175 929)
-
3 332
( 19 173)
-
75 310
( 51 719)
8 156 239
( 51 593)
547 769
( 246 821)
4 474 160
2 239 701
1 691 733
8 405 594
Inflation Adjusted
Historical Cost
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
845 016
1 284 274
175 848
( 828 386)
( 1 295 404)
257 321
273 951
-
856 146
845 016
-
-
98 103
273 951
-
77 745
-
98 103
175 848
-
273 951
845 016
273 951
175 848
Tribe28ANNUAL REPORT 2023 65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20.5. The terms and conditions applicable to loans and advances are as follows:
Product
Overdraft
Loan
Tenure
Payable on demand
Interest Rate
Penalty interest rate of eleven percentage 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 120% per annum up to a maximum of 215% per annum. Loans to employees and executive
Directors are at an interest rate that considers the relevant risk of staff which is usually lower than
the other markets for individual customers.
Bankers Acceptances
Loan payable over a minimum period
of 30 days up to 90 days.
From 50% pa to 205% per annum.
21. OTHER ASSETS
Trade and other receivables
Consumable stocks
COMPANY
Other assets
21.1. OTHER ASSETS
Services deposits*
Prepayments and stocks**
Collateral repossessions***
Other receivables****
Inflation Adjusted
Historical Cost*
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
53 483 684
42 131 692
50 869 763
8 403 647
933 266
360 450
829 063
100 682
54 416 950
42 492 142
51 698 826
8 504 329
Inflation Adjusted
Historical Cost
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
2 417
259 746
2 417
54 053
2 417
259 746
2 417
54 053
Inflation Adjusted
Historical Cost*
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
16 305 622
28 072 539
11 369 531
360 450
-
18 855 530
16 305 622
2 366 005
26 143 101
-
100 682
3 923 843
2 113 799
10 038 789
11 906 629
9 250 102
COMPANY
Inflation Adjusted
Historical Cost
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
54 416 950
42 492 140
51 698 825
8 504 329
Other receivables
2 417
259 746
2 417
54 053
2 417
259 746
2 417
54 053
* 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.
*** Collateral repossession assets are in relation to a commodity which the Group holds for sale as part of collateral exercise
**** Included in other receivables are RBZ auction funds receivable as well as miscellaneous suspense accounts.
Tribe28ANNUAL REPORT 2023 66
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22. NON-CURRENT ASSETS HELD FOR SALE
Balance at 1 January
Additions during the year
Monetary adjustment
Disposals during the year
Balance at 31 December
Inflation Adjusted
Historical Cost*
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
1 829 062
1 829 062
380 629
-
( 1 448 433)
( 380 629)
-
-
-
-
-
( 380 629)
2022
ZWL ‘000
-
380 629
-
-
-
1 829 062
-
380 629
The non-current assets held for sale comprised movable property and other qualifying assets which the bank used to hold as part of collateral
for loans and advances and have now been recovered from customers for borrowings from the bank. The Bank disposed of these assets
during the year.
23. TRADE AND OTHER INVESTMENTS
Balance at 1 January
Additions
Monetary adjustment
(Loss)/gain recognised in profit or loss
Inflation Adjusted
Historical Cost*
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
1 225 641
602 935
255 056
36 500
-
( 4 722 610)
6 063 858
-
339 011
283 695
-
-
-
-
2 311 833
218 556
2 566 889
1 225 641
2 566 889
255 056
The instruments are classified as financial assets at fair value through profit or loss as they are held in perpetuity and they represent equity
holdings in another third party entity, Society for Worldwide Interbank Financial Telecommunication (SWIFT). The gain or losses relate to foreign
exchange rate movements since the instruments are denominated in a foreign currency (Euro) and are recognised through profit or loss.
24. INVESTMENTS IN GROUP COMPANIES
COMPANY
Inflation Adjusted
Historical Cost
Investment in subsidiaries: NMB Bank Limited
Investment in subsidiaries: Xplug Solutions
Investment in subsidiaries: NMB Properties
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
35 430 628
35 430 628
386 381
159 564
475
2 609
-
-
100
550
-
-
35 433 713
35 430 628
387 031
159 564
The subsidiaries are registered in Zimbabwe, and the extent of the Group has 100% beneficial interest therein and their principal business
activities are in Banking, technology transformation and property development, respectively. The consolidated financial statements include
the financial information of the subsidiaries listed above.
On 31 May 2023, Reoville Investments, a 100% owned subsidiary of NMB Bank Limited, was transferred to NMBZ Holdings Limited and incorporated
as NMB Properties. All of its assets and liabilities were transferred from NMB Bank Limited to NMBZ Holdings Limited at a fair value of ZWL 6 772
626 955.
NMB Bank Limited derecognised its investment in subsidiary on 31 May 2023 and NMBZ Holdings Limited recognised an investment in NMB
Properties on the same date.
In April 2023, the Group incorporated Xplug Solutions as a separate subsidiary that is focused on developing digital transformation and
technology services
Tribe28ANNUAL REPORT 2023 67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
24.1.
INTERCOMPANY TRANSACTIONS AND BALANCES
24.1.1. INTERCOMPANY TRANSACTIONS
NMBZ Holdings Limited
Revenue
Shared Services Charge
NMB Bank Limited
Shared Services Charge
NMB Properties Limited
Revenue
Xplug Solutions Limited
Revenue
24.1.2. INTERCOMPANY BALANCES
NMBZ Holdings Limited
NMB Bank Limited
NMB Properties Limited
Xplug Solutions Limited
25. INVESTMENT PROPERTIES
At 1 January
Additions
Disposals
Fair value gains
Reclassification from work in progress
Reclassification from non-current assets held for sale
Translation gains on change in functional currency
NMBZ Holdings
Limited
2023
ZWL ‘000
NMB Bank
Limited
2023
ZWL ‘000
NMB Properties
Limited
Xplug Solutions
Limited
2023
ZWL ‘000
2023
ZWL ‘000
-
-
-
-
-
-
-
-
78 338
10 259
-
-
-
-
( 18 919)
( 3)
-
-
-
-
NMBZ Holdings
Limited
2023
ZWL ‘000
NMB Bank
Limited
2023
ZWL ‘000
NMB Properties
Limited
Xplug Solutions
Limited
2023
ZWL ‘000
2023
ZWL ‘000
(Payable to)/
Receivable from
(Payable to)/
Receivable from
(Payable to)/
Receivable from
(Payable to)/
Receivable from
-
1 165 457
-
-
( 1 165 457)
( 1 452 992)
( 1 345 607)
-
-
1 452 992
1 345 607
-
-
-
-
Inflation Adjusted
Historical Cost*
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
108 688 700
58 115 866
19 598 846
18 493 385
22 618 160
11 345 113
( 3 881 320)
( 744 134)
( 2 782 622)
3 518 133
2 764 347
( 45 050)
143 695 504
32 823 583
236 921 078
16 380 730
-
-
-
-
-
-
-
-
-
-
-
-
At 31 December
268 101 729
108 688 700
268 101 729
22 618 160
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.
In the current year, the group took over properties valued at ZWL11 527 500 000 in pursuit of recoveries for loans defaulted
Rental income amounting to ZWL 1 823 406 683 (2022: ZWL728 329 418) 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 Group 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. The Group has determined that the highest and best use of its
properties held is its current use
Measurement of fair value
Fair value hierarchy
The fair value of the Bank’s investment properties as at 31 December 2023 has been arrived at on the basis of valuations carried out by
independent professional valuers, Integrated Properties 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.
Tribe28ANNUAL REPORT 2023 68
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Level 3
The fair value for investment properties of ZWL264 110 843 000 (2022: ZWL108 688 000) has been categorised under level 3 in the fair value
hierarchy based on the inputs used for the valuation technique described below.
26. INTANGIBLE ASSETS
Cost
Balance 1 January 2022
Inflation adjustment
Acquisitions
Balance at 31 December 2022
Acquisitions
Inflation Adjusted
Historical Cost
ZWL ‘000
2 307 395
8 780 499
75 517
Total
ZWL ‘000
2 307 395
8 780 499
75 517
ZWL ‘000
Total
ZWL ‘000
21 261
21 261
14 133
14 133
11 163 411
11 163 411
-
-
35 394
-
35 394
-
Balance at 31 December 2023
11 163 411
11 163 411
35 394
35 394
Accumulated amortisation
Balance 1 January 2022
Amortisation for the year
Balance at 31 December 2022
Amortisation for the year
5 010 380
1 392 072
6 402 452
1 386 125
5 010 380
1 392 072
6 402 452
1 386 125
7 853
4 395
12 248
6 094
7 853
4 395
12 248
6 094
Balance at 31 December 2023
7 788 577
7 788 577
18 342
18 342
Carrying amount
At 31 December 2023
At 31 December 2022
3 374 834
3 374 834
17 052
17 052
4 760 960
4 760 960
23 147
23 147
* Included in the cost of the intangible assets are fully depreciated intangible assets with a cost of ZWL 5 373 404.
Tribe28ANNUAL REPORT 2023 69
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
27. PROPERTY AND EQUIPMENT
Cost/Revaluation amount
At 1 January 2022
Additions
Capitalisations
Remeasurement – Right of use assets
Revaluations
Disposals
At 31 December 2022
Additions
Capitalisations
Remeasurement – Right of use assets
Revaluations
Disposals
Inflation Adjusted
Capital Work
in Progress
Computers
Motor
Vehicles
Furniture &
Equipment
Right of Use
Assets**
Freehold
Land &
Buildings*
Total
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
11 959 166
12 702 692
1 135 985
6 512 660
3 558 139
47 413 820
83 282 462
5 075 834
4 702 648
1 685 309
607 688
-
-
-
-
-
-
-
-
-
-
( 4 573)
( 82 280)
-
-
-
-
-
-
4 059 908
-
-
-
12 071 479
-
4 059 908
-
-
3 431 256
3 431 256
-
( 86 853)
17 035 000
17 400 767
2 739 014
7 120 348
7 618 047
50 845 076
102 758 252
524 106
2 823 093
3 166 262
2 413 593
( 699 278)
-
-
-
-
-
-
-
-
-
-
( 185 180)
-
-
-
-
-
-
3 238 584
-
-
-
-
-
8 927 055
( 699 278)
3 238 584
71 020 585
71 020 585
-
( 185 180)
At 31 December 2023
16 859 828
20 223 860
5 720 096
9 533 941
10 856 631
121 865 661
185 060 017
Accumulated depreciation
At 1 January 2022
Charge for the year – Property and equipment
Charge for period – Right of use assets
Remeasurement – Right of use assets
Disposals
-
-
-
-
-
6 848 690
935 606
4 551 505
1 480 468
405 785
14 222 055
2 011 766
275 471
555 148
-
22 642
2 865 028
-
-
-
-
( 4 573)
( 82 280)
-
-
-
1 259 748
-
-
-
-
-
1 259 748
-
( 86 852)
At 31 December 2022
-
8 855 883
1 128 797
5 106 653
2 740 216
428 427
18 259 979
Charge for the year – Property and equipment
Charge for period – Right of use assets
Remeasurement – Right of use assets
Disposals
At 31 December 2023
Carrying amount
At 31 December 2023
-
-
-
-
2 722 883
962 793
927 252
-
872 634
5 485 562
-
-
-
-
-
( 185 181)
-
-
-
2 710 637
146 232
-
-
-
-
2 710 637
146 232
( 185 181)
-
11 578 766
1 906 409
6 033 905
5 597 085
1 301 061
26 417 229
16 859 828
8 645 094
3 813 686
3 500 036
5 259 547
120 564 600
158 642 788
At 31 December 2022
17 035 000
8 544 884
1 610 217
2 013 695
4 877 831
50 416 649
84 498 273
* 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.
**** Included in the cost of Property and Equipment are fully depreciated assets amounting to ZWL 17 877 713
Tribe28ANNUAL REPORT 2023
70
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
27.1. PROPERTY AND EQUIPMENT
Cost/Revaluation amount
At 1 January 2022
Additions
Capitalisations
Revaluations
Remeasurement – Right of use assets
Disposals
At 31 December 2022
Additions
Capitalisations
Revaluations
Remeasurement – Right of use assets
Disposals
Historical Cost*
Capital Work
in Progress
Computers
Motor
Vehicles
Furniture &
Equipment
Right of Use
Assets**
Freehold
Land &
Buildings*
Total
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
34 182
137 793
3 329
62 975
95 141
2 890 149
3 223 569
1 056 283
740 557
263 968
101 967
-
-
-
-
-
-
-
-
-
-
( 331)
( 76)
-
-
-
-
-
-
-
-
-
2 162 776
277 945
7 749 051
-
277 945
-
-
-
( 407)
7 749 051
1 090 465
878 019
267 221
164 942
373 086
10 639 200
13 412 932
354 158
1 324 769
1 123 096
1 395 408
( 489 321)
-
-
-
-
-
-
-
-
-
-
( 210)
-
-
-
-
-
-
-
-
-
4 197 432
( 489 321)
110 945 505
110 945 505
1 464 098
-
-
-
1 464 098
( 210)
At 31 December 2023
955 302
2 202 788
1 390 107
1 560 350
1 837 183
121 584 704
129 530 435
Accumulated depreciation
At 1 January 2022
Charge for the year – Property and equipment
Charge for period – Right of use assets
Remeasurement – Right of use assets
Disposals
At 31 December 2022
Charge for the year – Property and equipment
Charge for period – Right of use assets
Remeasurement – Right of use assets
Disposals
At 31 December 2023
Carrying amount
At 31 December 2023
-
-
-
-
-
-
-
-
-
-
32 048
1 799
16 865
62 917
44 446
158 075
77 470
20 885
16 965
-
103 029
218 350
-
-
-
-
( 44)
( 76)
-
-
-
71 926
( 35 200)
-
-
-
-
71 926
( 35 200)
( 120)
109 475
22 608
33 830
99 643
147 475
413 030
295 249
233 980
151 757
-
872 634
1 553 619
-
-
-
-
-
( 210)
-
-
-
458 700
24 741
-
-
-
-
458 700
24 741
( 210)
-
404 723
256 377
185 586
583 083
1 020 109
2 449 879
955 302
1 798 065
1 133 729
1 374 764
1 254 100
120 564 595
127 080 556
At 31 December 2022
1 090 465
768 545
244 612
131 113
273 443
10 491 724
12 999 901
Fair value hierarchy
Immovable properties were revalued as at 31 December 2023 on the basis of valuations carried out by independent professional valuers,
Integrated Properties 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 ZWL 18 000 and ZWL 93 000 per
square metre.
Level 3
The fair value of immovable properties of ZWL120 564 600 000 (2022: ZWL50 416 649 000) 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:
Tribe28ANNUAL REPORT 2023 71
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 1 January
Transfers from work in progress
Revaluation gain
Depreciation
Inflation Adjusted
Historical Cost*
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
50 845 076
47 413 820
10 639 200
2 890 149
-
-
110 945 505
71 020 585
3 431 256
-
( 1 301 061)
( 428 427)
( 1 020 109)
-
7 749 051
( 147 475)
Balance at 31 December
120 564 600
50 416 649
120 564 595
10 491 724
Valuation technique and significant unobservable inputs
The following table shows the valuation technique used in measuring the fair value of immovable 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%);
•
Average market yield of 10%.
Inter-relationship between key unobservable inputs and fair
value measurement
The estimated fair value would increase /(decrease) if:
•
•
expected market rental growth were higher/ (lower); and
the risk adjusted discount rates were lower/ (higher).
Change in rate
Changes in fair value following changes in:
Expected market rental growth
Discount rates
5%
3%
1%
-1%
-3%
-5%
131 035
78 621
26 207
( 26 207)
( 78 621)
( 131 035)
460 995
276 597
92 199
( 92 199)
( 276 597)
( 460 995)
28. 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.
Tribe28ANNUAL REPORT 2023
72
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
28.1. Total position
As at 31 December 2023
Assets
Cash and cash equivalents
RBZ Digital Tokens
Current tax assets
Investment securities
Quoted and other investments
Loans, advances
Other assets
Non-current assets held for sale
Intangible assets
Property and equipment
Investment properties
Liabilities and equity
Deposits
Other liabilities
Borrowings
Current tax liabilities
Deferred tax liabilities
Equity
Subordinated loan
Up to 1 month
ZWL
‘000
1 month to 3
months
ZWL
‘000
Inflation Adjusted
3 months to 1 year
1 year to 5 years
ZWL
‘000
ZWL
‘000
Non interest
bearing
ZWL
‘000
Total
ZWL
‘000
352 383 289
19 567 202
-
-
-
-
-
-
-
62 504 219
16 930 818
1 000 000
68 220 572
-
-
-
352 383 289
19 567 202
-
148 655 609
-
-
-
-
2 566 889
2 566 889
109 013 886
131 282 566
72 119 937
182 120 129
-
494 536 518
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
54 416 951
54 416 951
-
-
3 374 834
3 374 834
158 642 788
158 642 788
268 101 729
268 101 729
543 468 595
148 213 384
73 119 937
250 340 702
487 103 190
1 502 245 809
495 482 422
20 990 436
1 734 492
10 323 565
-
528 530 915
-
-
-
7 188 128
-
-
-
-
-
-
-
-
99 339 523
99 339 523
263 289 317
263 289 317
4 107 692
4 107 692
68 350 959
68 350 959
531 439 275
531 439 275
-
7 188 128
-
-
-
-
502 670 550
20 990 436
1 734 492
10 323 565
966 526 769
1 502 245 809
Interest rate repricing gap
40 798 045
127 222 948
71 385 445
240 017 137
( 479 423 574)
Cumulative gap
40 798 045
168 020 993
239 406 438
479 423 575
-
-
-
As at 31 December 2022
Assets
Cash and cash equivalents
Current tax assets
Investment securities
Quoted and other investments
Loans, advances
Other assets
Non-current assets held for sale
Intangible assets
Property and equipment
Investment properties
Liabilities and equity
Deposits
Other liabilities
Borrowings
Current tax liabilities
Deferred tax liabilities
Equity
Subordinated loan
103 502 091
-
-
-
-
-
-
-
31 277 619
3 363 761
16 375 323
33 185 773
-
-
-
103 502 091
-
84 202 476
-
-
-
-
1 225 641
1 225 641
36 821 057
83 929 807
70 896 453
201 938 222
-
393 585 539
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
42 492 142
42 492 142
1 829 062
1 829 062
4 760 955
4 760 955
84 498 274
84 498 274
108 688 700
108 688 700
171 600 767
87 293 568
87 271 775
235 123 996
243 494 774
824 784 880
226 078 385
31 203 965
4 458 392
114 291
-
261 855 033
-
-
-
-
-
4 451 329
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
56 665 849
56 665 849
102 240 322
102 240 322
211 665
211 665
26 049 115
26 049 115
205 010 897
205 010 897
-
4 451 329
230 529 714
31 203 965
4 458 392
114 291
390 177 848
656 484 210
Interest rate repricing gap
( 58 928 947)
56 089 603
82 813 383
235 009 705
( 146 683 074)
168 300 670
Cumulative gap
( 58 928 947)
( 2 839 344)
79 974 039
314 983 744
168 300 670
-
Tribe28ANNUAL REPORT 2023 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at 31 December 2023
Assets
Cash and cash equivalents
RBZ Digital Tokens
Current tax assets
Investment securities
Quoted and other investments
Loans, advances and other assets
Other assets
Non current assets held for sale
Intangible assets
Property and equipment
Investment properties
Liabilities and equity
Deposits
Other liabilities
Borrowings
Current tax liabilities
Deferred tax liabilities
Equity
Subordinated loan
Historical Cost*
Up to 1 month
1 month to 3
months
3 months to 1
year
1 year to 5 years
Non interest
bearing
ZWL
‘000
ZWL
‘000
ZWL
‘000
ZWL
‘000
ZWL
‘000
Total
ZWL
‘000
352 383 289
19 567 202
-
-
-
-
-
-
-
-
-
-
62 504 219
16 930 818
1 000 000
68 220 572
-
-
-
-
352 383 289
19 567 202
-
148 655 609
-
-
-
-
2 566 889
2 566 889
109 013 886
131 282 566
72 119 937
182 120 129
-
494 536 518
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
51 698 829
51 698 829
-
-
17 052
17 052
127 080 556
127 080 556
268 101 729
268 101 729
543 468 595
148 213 384
73 119 937
250 340 702
449 465 056
1 464 607 673
495 482 422
20 990 436
1 734 492
10 323 565
-
528 530 915
-
-
-
7 188 128
-
-
-
-
97 909 352
97 909 352
263 334 637
( 45 320)
263 289 317
-
-
-
-
-
-
-
-
4 107 692
4 107 692
58 121 958
58 121 958
505 460 311
505 460 311
-
7 188 128
502 670 550
20 990 436
1 734 492
273 658 202
665 553 993
1 464 607 673
Interest rate repricing gap
40 798 045
127 222 948
71 385 445
( 23 317 499)
( 216 088 938)
40 798 045
168 020 993
239 406 438
216 088 937
-
-
-
Cumulative gap
As at 31 December 2022
Assets
Cash and cash equivalents
Current tax assets
Investment securities
Quoted and other investments
Loans, advances and other assets
Other assets
Non current assets held for sale
Intangible assets
Property and equipment
Investment properties
Liabilities and equity
Deposits
Other liabilities
Borrowings
Current tax liabilities
Deferred tax liabilities
Equity
Subordinated loan
21 538 825
-
-
-
-
-
-
-
6 508 884
700 000
3 407 711
6 137 571
-
-
-
21 538 825
-
16 754 166
-
-
-
-
255 056
255 056
7 662 476
17 465 825
14 753 579
42 023 421
-
81 905 301
-
-
-
-
-
-
-
-
-
-
-
380 629
-
-
-
-
-
-
-
-
8 504 329
8 504 329
-
380 629
23 147
23 147
12 999 902
12 999 902
22 618 160
22 618 160
35 710 185
18 165 825
18 541 919
48 160 993
44 400 594
164 979 514
47 046 998
6 493 557
927 793
23 784
-
54 492 132
-
-
-
926 323
-
-
-
-
-
-
-
-
11 792 185
11 792 185
21 276 250
21 276 250
44 047
44 047
3 964 776
3 964 776
38 228 768
38 228 768
-
926 323
-
-
-
-
47 973 322
6 493 557
927 793
23 784
75 306 025
130 724 482
Interest rate repricing gap
( 12 263 137)
11 672 268
17 614 126
48 137 209
( 30 905 432)
Cumulative gap
( 12 263 137)
( 590 869)
17 023 257
65 160 464
-
-
-
Tribe28ANNUAL REPORT 2023 74
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
28.2. Zimbabwean 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.
As at 31 December 2023
Assets
Cash and cash equivalents
Investment securities
Quoted and other investments
Loans, advances and other assets
Other assets
Non-current assets held for sale
Intangible assets
Property and equipment
Investment properties
Liabilities and equity
Deposits
Other Liabilities
Current tax liabilities
Deferred tax liabilities
Equity
Subordinated loan
Inflation Adjusted
Up to 1 month
1 month to 3
months
3 months to 1
year
1 year to 5 years
Non interest
bearing
ZWL
‘000
ZWL
‘000
ZWL
‘000
ZWL
‘000
ZWL
‘000
Total
ZWL
‘000
22 955 562
-
-
-
62 504 219
16 930 818
1 000 000
68 220 572
-
-
22 955 562
148 655 609
-
-
-
-
2 566 889
2 566 889
11 471 596
13 814 942
7 589 224
19 164 609
-
52 040 370
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
45 912 622
45 912 622
-
-
3 374 834
3 374 834
158 642 788
158 642 788
268 101 729
268 101 729
96 931 375
30 745 760
8 589 224
87 385 181
478 598 864
702 250 405
85 669 857
3 629 287
299 897
1 784 964
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
91 384 005
-
4 107 692
4 107 692
68 350 958
68 350 958
531 439 275
531 439 275
-
-
85 669 857
3 629 287
299 897
1 784 964
603 897 925
695 281 930
Interest rate repricing gap
11 261 519
27 116 475
8 289 327
85 600 217
( 125 299 062)
6 968 475
Cumulative gap
11 261 519
38 377 993
46 667 320
132 267 537
6 968 475
( 0)
As at 31 December 2022
Assets
Cash and cash equivalents
Investment securities
Quoted and other investments
Loans, advances and other assets
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
Equity
Subordinated loan
Inflation Adjusted
Up to 1 month
1 month to 3
months
3 months to 1
year
1 year to 5 years
Non interest
bearing
ZWL
‘000
ZWL
‘000
ZWL
‘000
ZWL
‘000
ZWL
‘000
Total
ZWL
‘000
33 176 569
-
-
-
31 277 619
3 363 761
16 375 323
29 493 319
-
-
33 176 569
80 510 022
-
-
-
-
1 225 641
1 225 641
14 728 423
8 392 981
42 537 872
10 096 911
-
75 756 187
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10 005 812
10 005 812
1 829 062
1 829 062
4 760 955
4 760 955
84 498 274
84 498 274
108 688 700
108 688 700
79 182 611
11 756 742
58 913 195
39 590 230
211 008 444
400 451 222
100 169 999
29 650 797
4 458 392
114 291
-
134 393 479
-
-
-
4 451 329
-
-
-
-
-
-
-
-
-
-
-
-
211 665
211 665
26 049 115
26 049 115
205 010 897
205 010 897
-
4 451 329
104 621 328
29 650 797
4 458 392
114 291
231 271 677
370 116 485
Interest rate repricing gap
( 25 438 717)
( 17 894 055)
54 454 803
39 475 939
( 20 263 233)
30 334 737
Cumulative gap
( 25 438 717)
( 43 332 772)
11 122 031
50 597 970
30 334 737
-
Tribe28ANNUAL REPORT 2023 75
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at 31 December 2023
Assets
Cash and cash equivalents
RBZ Digital Tokens
Investment securities
Loans and advances
Other assets
Non-current assets held for sale
Intangible assets
Property and equipment
Investment properties
Liabilities and equity
Deposits
Other liabilities
Borrowings
Current tax liabilities
Deferred tax liabilities
Equity
Subordinated loan
Historical Cost*
Up to 1 month
1 month to 3
months
3 months to 1
year
1 year to 5 years
Non interest
bearing
ZWL
‘000
ZWL
‘000
ZWL
‘000
ZWL
‘000
ZWL
‘000
Total
ZWL
‘000
22 955 562
19 567 202
-
-
-
-
-
-
62 504 219
16 930 818
1 000 000
68 220 572
11 471 596
13 814 942
7 589 224
19 164 609
-
-
-
-
22 955 562
19 567 202
148 655 609
52 040 370
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
27 124 911
27 124 911
-
-
17 052
17 052
127 080 556
127 080 556
268 101 729
268 101 729
116 498 578
30 745 760
8 589 224
87 385 181
422 324 248
665 542 990
85 669 857
3 629 287
299 897
1 784 964
-
91 384 005
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
97 909 352
97 909 352
-
-
4 107 692
4 107 692
58 121 957
58 121 957
505 460 311
505 460 311
-
-
85 669 857
3 629 287
299 897
1 784 964
665 599 313
756 983 317
Interest rate repricing gap
30 828 721
27 116 474
8 289 327
85 600 217
( 243 275 064)
( 91 440 326)
Cumulative gap
30 828 721
57 945 195
66 234 521
151 834 738
( 91 440 326)
-
As at 31 December 2022
Assets
Cash and cash equivalents
Investment securities
Loans and advances
Other assets
Non-current assets held for sale
Intangible assets
Property and equipment
Investment properties
Liabilities and equity
Deposits
Other liabilities
Borrowings
Current tax liabilities
Deferred tax liabilities
Equity
Subordinated loan
Historical Cost*
Up to 1 month
1 month to 3
months
3 months to 1
year
1 year to 5 years
Non interest
bearing
ZWL
‘000
ZWL
‘000
ZWL
‘000
ZWL
‘000
ZWL
‘000
Total
ZWL
‘000
6 904 057
-
-
-
( 7 200 813)
( 296 756)
6 508 884
700 000
3 407 711
6 137 571
3 064 990
1 746 582
8 852 147
2 101 171
-
-
16 754 166
15 764 891
-
-
-
-
-
-
-
-
-
-
-
380 629
-
-
-
-
-
-
-
-
8 504 329
8 504 329
-
380 629
23 147
23 147
12 999 902
12 999 902
22 618 160
22 618 160
16 477 932
2 446 582
12 640 487
8 238 742
36 944 724
76 748 467
20 845 415
6 170 342
927 793
23 784
-
27 967 334
-
-
-
-
-
926 323
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6 760 418
6 760 418
-
-
44 047
44 047
3 964 776
3 964 776
38 228 768
38 228 768
-
926 323
21 771 738
6 170 342
927 793
23 784
48 998 009
77 891 667
Interest rate repricing gap
( 5 293 807)
( 3 723 760)
11 712 694
8 214 958
( 12 053 285)
( 1 143 199)
Cumulative gap
( 5 293 807)
( 9 017 566)
2 695 128
10 910 086
( 1 143 199)
( 0)
Tribe28ANNUAL REPORT 2023 76
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
28.3. Other foreign currencies
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.
As at 31 December 2023
Assets
Cash and cash equivalents
Loans and advances
Other assets
Quoted investments
Liabilities and equity
Deposits
Other liabilities
Borrowings
Subordinated loan
Inflation Adjusted
Up to 1 month
1 month to 3
months
3 months to 1
year
1 year to 5
years
Non interest
bearing
ZWL
‘000
ZWL
‘000
ZWL
‘000
ZWL
‘000
ZWL
‘000
Total
ZWL
‘000
329 427 727
-
-
-
97 542 290
117 467 624
64 530 713
162 955 520
-
-
329 427 727
442 496 148
-
-
-
-
-
-
-
-
24 573 916
24 573 916
2 566 889
2 566 889
426 970 016
117 467 624
64 530 713
162 955 520
27 140 806
799 064 680
409 812 565
17 361 150
1 434 595
8 538 601
-
-
7 188 128
-
-
-
-
-
-
-
263 334 637
-
417 000 693
17 361 150
1 434 595
271 873 238
-
-
-
-
-
437 146 911
-
263 334 637
7 188 128
707 669 675
Interest rate repricing gap
9 969 323
100 106 475
63 096 118
( 108 917 717)
27 140 806
91 395 005
Cumulative gap
9 969 323
110 075 798
173 171 917
64 254 199
91 395 005
-
As at 31 December 2022
Assets
Cash and cash equivalents
Loans and advances
Other assets
Quoted investments
Liabilities and equity
Deposits
Other liabilities
Borrowings
Subordinated loan
Inflation Adjusted
Up to 1 month
1 month to 3
months
3 months to 1
year
1 year to 5
years
Non interest
bearing
ZWL
‘000
ZWL
‘000
ZWL
‘000
ZWL
‘000
ZWL
‘000
Total
ZWL
‘000
70 325 522
-
-
-
34 602 594
104 928 116
22 092 634
75 536 826
28 358 581
191 841 311
-
-
-
-
-
-
-
-
-
-
317 829 352
-
314 049
314 049
92 418 156
75 536 826
28 358 581
191 841 311
34 916 643
423 071 517
125 908 387
1 553 168
-
-
-
-
-
-
125 908 387
1 553 168
-
-
-
-
-
-
-
-
-
-
14 505 394
141 966 949
24 179 519
24 179 519
107 957 235
107 957 235
-
-
146 642 148
274 103 703
Interest rate repricing gap
( 33 490 231)
73 983 658
28 358 581
191 841 311
( 111 725 505)
148 967 814
Cumulative gap
( 33 490 231)
40 493 427
68 852 008
260 693 319
148 967 814
-
Tribe28ANNUAL REPORT 2023 77
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at 31 December 2023
Assets
Cash and cash equivalents
Loans and advances
Other assets
Unquoted investments
Liabilities and equity
Deposits
Other liabilities
Borrowings
Current tax liabilities
Subordinated loan
Historical Cost*
Up to 1 month
1 month to 3
months
3 months to 1
year
1 year to 5
years
Non interest
bearing
ZWL
‘000
ZWL
‘000
ZWL
‘000
ZWL
‘000
ZWL
‘000
Total
ZWL
‘000
329 427 727
-
-
-
97 542 290
117 467 624
64 530 713
162 955 520
-
-
329 427 727
442 496 148
-
-
-
-
-
-
-
-
24 573 916
24 573 916
2 566 889
2 566 889
426 970 017
117 467 624
64 530 713
162 955 520
27 140 805
799 064 679
409 812 565
17 361 150
1 434 595
8 538 601
437 146 911
-
-
-
7 188 128
-
-
-
-
-
-
-
-
-
263 334 637
-
-
417 000 693
17 361 150
1 434 595
271 873 238
-
-
-
-
-
-
263 334 637
-
7 188 128
707 669 675
Interest rate repricing gap
9 969 324
100 106 474
63 096 118
( 108 917 717)
27 140 805
91 395 004
Cumulative gap
9 969 324
110 075 798
173 171 917
64 254 199
91 395 004
-
As at 31 December 2022
Assets
Cash and cash equivalents
Loans and advances
Other assets
Unquoted investments
Liabilities and equity
Deposits and other liabilities
Other laibilities
Borrowings
Current tax liabilities
Subordinated loan
Historical Cost*
Up to 1 month
1 month to 3
months
3 months to 1
year
1 year to 5
years
Non interest
bearing
ZWL
‘000
ZWL
‘000
ZWL
‘000
ZWL
‘000
ZWL
‘000
Total
ZWL
‘000
14 634 768
-
-
-
7 200 813
21 835 581
4 597 486
15 719 242
5 901 432
39 922 250
-
-
-
-
-
-
-
-
-
-
66 140 410
-
65 354
65 354
19 232 254
15 719 242
5 901 432
39 922 250
7 266 167
88 041 344
26 201 583
323 215
-
-
-
-
-
-
-
-
26 201 583
323 215
-
-
-
-
-
-
-
-
-
-
-
-
3 018 578
29 543 376
5 031 767
5 031 767
22 465 942
22 465 942
-
-
-
-
30 516 287
57 041 085
Interest rate repricing gap
( 6 969 330)
15 396 028
5 901 432
39 922 250
( 23 250 120)
31 000 259
Cumulative gap
( 6 969 330)
8 426 698
14 328 129
54 250 379
31 000 259
-
Tribe28ANNUAL REPORT 2023 78
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
29. CONTINGENT LIABILITIES
Guarantees
Facilities approved but not drawn down
Expected credit losses on facilities approved but not drawdown
Expected credit losses on guarantees
Inflation Adjusted
Historical Cost*
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
19 041 517
3 569 172
19 041 517
742 746
-
-
-
-
-
( 73 152)
-
-
-
-
-
( 15 223)
Balance at 31 December
19 041 517
3 496 020
19 041 517
727 523
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.
30. CAPITAL COMMITMENTS
There were no capital commitments during the year under review. Capital commitments are financed from the Group’s own resources.
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.
31.1. Compensation of key management personnel of the Group
Short term employee benefits
Post employment benefits
Termination benefits
31.2. Balances of loans to Directors, officers and others
Executive directors
Officers
Directors’ companies
Officers companies
Expected credit loss allowance – Stage 1
31.3. Borrowing powers
Holding Company
Inflation Adjusted
Historical Cost*
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
79 780 106
37 625 616
48 579 305
6 352 080
2 976 557
1 446 854
2 063 763
2 870 290
1 165 419
666 373
313 170
309 181
84 203 518
42 559 669
50 411 098
6 974 431
Inflation Adjusted
Historical Cost*
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
-
845 020
2022
ZWL ‘000
175 849
32 295 162
23 502 633
32 295 162
4 890 907
-
-
-
-
-
-
32 295 162
24 347 653
32 295 162
( 350 793)
( 264 467)
( 350 793)
-
-
5 066 756
( 55 036)
31 944 369
24 083 186
31 944 369
5 011 720
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.
Tribe28ANNUAL REPORT 2023 79
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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 2023.
32.2. Expense recognised in profit or loss
Defined Contribution Plan – NSSA
Defined Contribution Plan – NMB Bank Limited Pension Fund
Inflation Adjusted
Historical Cost*
2023
ZWL ‘000
2022
ZWL ‘000
2 143 869
425 462
468 474
1 595 289
2023
ZWL ‘000
691 646
121 122
2022
ZWL ‘000
72 845
240 325
2 569 331
2 063 763
812 767
313 170
The expense is recognised in profit or loss as part of staff costs under operating expenses (note 6).
The Group does not have defined benefit plans.
32.3. Employee Share Option Scheme
In 2012, the Company established a share option programme that entitles Executive Directors and Senior Managers to purchase shares in the
Company (equity settled). The beneficiary has a right to acquire a certain number of the Company’s shares at any time during the Exercise
Period at the Exercise Price.
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.
32.3.1. Measurement of fair value - share options
The fair value of services received in return for share options granted is based on the fair value of share options granted, measured using the
Black-Scholes formula. The service and non-market performance conditions attached to the arrangements were not taken into account in
measuring fair value. The inputs used in measuring the fair values at grant date of the equity-settled share based payment plans were as
follows:
Underlying Price
Reporting Date
Historical Volatility
Expiry Date
RIsk Free Rate
Dividend yield
Days to exercise date
Number of years left to exercise date
Inflation Adjusted
Historical Cost*
2023
ZWL
250
2022
ZWL
30
2023
ZWL
250
2022
ZWL
30
31/12/2023
31/12/2022
31/12/2023
31/12/2022
94.11%
30/06/2025
178.78%
3.88%
730
2
31.54%
N/A
30%
1.53%
608
1.67
94.11%
30/06/2025
178.78%
3.88%
730
2
31.54%
N/A
30%
1.53%
608
1.67
Average value of share options
248.40
28.00
248.40
28.00
Tribe28ANNUAL REPORT 2023 80
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
32.3.2. Reconciliation of outstanding share options
Movements in the number of share options outstanding and their related exercise price are as follows
Opening Balance
Granted
Exercised
Closing Balance
Inflation Adjusted
Historical Cost*
Execise price per
option ZWL
Options
Execise price per
option ZWL
Options
13.65
28.00
(13.99)
10 141 568
5 247 719
( 1 704 868)
13.65
28.00
(13.99)
5 614 215
10 141 568
( 5 614 215)
13 684 419
10 141 568
32.3.3. Reconciliation of the share option Reserve
Movements in the number of share options outstanding and their related exercise price are as follows
Opening Balance
Share-based payment expense
Exercise of options
Inflation Adjusted
Historical Cost*
2023
ZWL ‘000
1 236 145
305 160
( 23)
2022
ZWL ‘000
545 919
701 513
( 11 287)
2023
ZWL ‘000
129 569
229 682
( 9)
2022
ZWL ‘000
27 768
103 297
( 1 496)
Closing Balance
1 541 282
1 236 145
359 242
129 569
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 ZWL369 215 093
(2022 – restated ZWL 48 154 068).
33. EXCHANGE RATES
The following exchange rates have been used to translate the foreign currency balances to ZWL dollars at year end:
United States Dollar
British Sterling
South African Rand
European Euro
Botswana Pula
USD
GBP
ZAR
EUR
BWP
31-Dec-23
Mid - rate
ZWL
6104.7226
7783.6486
333.3333
6753.9757
455.5077
31-Dec-22
Mid - rate
ZWL
684.3339
824.7971
40.3226
729.1627
53.6592
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:
Strategic Level:
Macro Level:
Micro 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.
It encompasses risk management within a business area or across business lines. These risk
management functions are performed by middle management.
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.
Tribe28ANNUAL REPORT 2023 81
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Risk management is premised on four (4) mutually reinforcing pillars, namely:
a. adequate board and senior management oversight;
b. adequate strategy, policies, procedures and limits;
c. adequate risk identification, measurement, monitoring and information systems; and
d. comprehensive internal controls and independent reviews.
34.1. Credit Risk
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.
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.
Tribe28ANNUAL REPORT 2023 82
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
34.1.1. Maximum exposure to credit risk without taking account of any collateral
Inflation Adjusted
Historical Cost*
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
Cash and Cash equivalents (excluding cash on hand)
352 383 289
103 186 207
352 383 289
21 473 089
Investment securities
Loans and advances
Total
Guarantees
148 655 609
80 510 025
148 655 609
494 536 518
393 585 539
494 536 518
16 754 166
81 905 301
995 575 417
577 281 771
995 575 417
120 132 557
19 041 517
3 569 172
19 041 517
742 746
Facilities approved but not drawn down
-
-
-
-
19 041 516
3 569 172
19 041 516
742 745
1 014 616 933
580 850 943
1 014 616 933
120 875 303
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.
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.
34.1.2. Risk concentrations of maximum exposure to credit risk on lending activities
Agriculture
Conglomerates
Distribution
Food & Beverages
Individuals
Manufacturing
Mining
Services and other
Inflation Adjusted
Historical Cost*
2023
Gross Maximum
Exposure
2022
Net Maximum
Exposure
2023
Gross Maximum
Exposure
2022
Net Maximum
Exposure
ZWL ‘000
ZWL ‘000
ZWL ‘000
ZWL ‘000
156 309 527
155 402 077
61 142 743
58 842 011
13 207 093
71 104 313
11 117 068
13 207 093
62 710 392
11 117 068
-
-
67 257 079
45 975 312
-
-
89 027 927
82 222 045
56 323 642
39 068 155
59 406 635
59 406 635
31 950 646
31 950 646
8 166 016
4 772 187
8 166 016
4 772 187
78 974 286
78 520 561
66 744 618
65 594 252
511 097 496
494 536 518
264 406 285
222 417 933
Expected credit loss on loans and advances
( 16 560 978)
-
( 41 988 352)
-
Net exposure
494 536 518
494 536 518
222 417 933
222 417 933
34.1.3. 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
ZWL13 739 159 961 (2022:ZWL9 756 840 671)
Tribe28ANNUAL REPORT 2023 83
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
34.1.4. Credit quality per sector on lending activities
At 31 December 2023
Agriculture and horticulture
Conglomerates
Distribution
Food and beverages
Individuals
Manufacturing
Mining
Services
Net exposure
At 31 December 2022
Agriculture and horticulture
Conglomerates
Distribution
Food and beverages
Individuals
Manufacturing
Mining
Services
Net exposure
Grade A
Pass
ZWL’000
Grade B
Special
Mention
ZWL’000
Grade C
Substandard
ZWL’000
Grade D
Doubtful
ZWL’000
Grade E
Loss
ZWL’000
Total
ZWL’000
142 367 566
12 736 654
297 658
13 207 093
-
-
197
-
57 263 294
954 275
4 218 823
274 001
11 117 068
-
-
-
-
-
-
-
155 402 076
13 207 093
62 710 392
11 117 068
80 012 746
186 788
1 973 542
48 484
485
82 222 045
59 406 635
-
31 245 582
705 064
-
-
68 680 938
9 722 334
117 290
-
-
-
-
-
-
59 406 635
31 950 646
78 520 562
463 300 923
24 305 115
6 607 313
322 682
485
494 536 518
64 663 211
1 404 870
-
-
45 869 133
389
-
-
-
-
-
-
1 382 977
-
105 790
-
-
-
-
-
67 451 058
-
45 975 312
-
37 868 153
436 549
709 840
51 739
1 874
39 068 155
8 166 016
4 772 187
-
-
-
-
-
-
51 405 081
5 299 077
134 930
146 117
-
-
-
8 166 016
4 772 187
56 985 205
212 743 781
7 140 885
844 770
1 686 623
1 874
222 417 933
34.1.5. Credit quality per sector on lending activities
Pass
Special Mention
Substandard
Doubtful
Loss
Refers to loans graded 1 to 3
Refers to loans graded 4 to 7
Refers to loans graded 8
Refers to loans graded 9
Refers to loans graded 10
34.1.6. Rating Scale mapping to IFRS 9 Stages
NMB Bank Rating Scale
Supervisory Rating Scale
NMBR1
NMBR2
NMBR3
NMBR4
NMBR5
NMBR6
NMBR7
NMBR8
NMBR9
NMBR10
1
2
3
4
5
6
7
8
9
10
IFRS 9
Stage 1
Stage 2
Stage 3
34.2. Market risk
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 2023.
Tribe28ANNUAL REPORT 2023 84
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2023
ZWL
ZWL
ZWL
ZWL
ZWL
ZWL
At 31 December 2022
ZWL
ZWL
ZWL
ZWL
ZWL
ZWL
Sensitivity of net interest income
change in
interest rates
%
0 to 1
month
ZWL
1 to 3
months
ZWL
3 months to 1
year
ZWL
1 year to
5 years
ZWL
Total
ZWL
5%
3%
( 110 186 271)
( 2 084 054)
30 877 803
29 759 809
( 51 632 713)
( 66 111 762)
( 1 250 432)
18 526 682
17 855 885
( 30 979 627)
1% ( 22 037 254)
( 416 811)
6 175 561
59 951 962
43 673 458
-1%
-3%
-5%
22 037 254
416 811
( 6 175 561)
( 5 951 962)
10 326 542
66 111 762
1 250 432
( 18 526 682)
( 17 855 885)
30 979 627
110 186 271
2 084 054
( 30 877 803)
( 29 759 809)
51 632 713
5%
( 529 486
155)
( 10 014 657)
148 379 367
143 006 989
( 248 114 456)
3% ( 317 691 690)
( 6 008 792)
89 027 621
85 804 191
( 148 868
670)
1% ( 105 897 230)
( 2 002 932)
29 675 875
288 091 552
209 867 265
-1%
105 897 230
2 002 932
( 29 675 875)
( 28 601 399)
49 622 888
-3%
317 691 690
6 008 792
( 89 027 621)
( 85 804 191)
148 868 670
-5%
529 486 155
10 014 657 ( 148 379 367)
( 143 006
989)
248 114 456
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.
At 31 December 2023
USD
USD
USD
USD
USD
USD
At 31 December 2022
USD
USD
USD
USD
USD
USD
34.4. Liquidity risk
change in
interest rates
%
Effect on profit
before tax
ZWL
Effect
on equity
ZWL
5%
3%
1%
-1%
-3%
-5%
change in
interest rates
%
5%
3%
1%
-1%
-3%
-5%
( 1 733 132)
( 66 111 762)
( 22 037 254)
22 037 254
66 111 762
110 186 271
Effect on profit
before tax
ZWL
( 8 328 346)
( 317 691 690)
( 105 897 230)
105 897 230
317 691 690
529 486 155
( 2 084 054)
( 1 250 432)
( 416 811)
416 811
1 250 432
2 084 054
Effect
on equity
ZWL
( 10 014 657)
( 6 008 792)
( 2 002 932)
2 002 932
6 008 792
10 014 657
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 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.
Tribe28ANNUAL REPORT 2023 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at 31 December 2023
Assets held for managing liquidity risk
Cash and cash equivalents
Current tax assets
Investment securities
Loans, advances
Other assets
Total assets
Liabilities
Deposits
Other liabilities
Borrowings
Current tax liabilities
Subordinated loan
Inflation Adjusted
Up to 1 month
ZWL
1 month to 3
months
ZWL
3 months to 1
year
ZWL
1 year to 5 years
ZWL
Total
ZWL
352 383 289
-
-
-
-
-
-
-
352 383 289
-
62 504 219
16 930 818
1 000 000
79 297 725
159 732 762
109 013 886
131 282 566
72 119 937
182 120 129
494 536 518
-
54 416 951
-
-
54,416,951
523 901 394
202 630 335
73 119 937
261 417 854
1 061 069 520
495 482 422
20 990 436
1 734 492
10 323 565
528 530 915
-
-
4 107 692
-
99 339 523
-
-
-
-
-
-
-
-
99 339 523
263 289 317
263 289 317
-
4 107 692
7 188 128
7 188 128
Total liabilities (contractual maturity)
499 590 114
120 329 959
1 734 492
280 801 010
902 455 575
Liquidity gap
Cumulative gap
As at 31 December 2022
Assets held for managing liquidity risk
Cash and cash equivalents
Current tax assets
Investment securities
Loans, advances
Other assets
Total assets
Liabilities
Deposits
Other liabilities
Borrowings
Current tax liabilities
Subordinated loan
19 976 735
81 126 257
71 316 097
( 24 882 296)
147 536 793
19 976 735
101 102 992
172 419 089
147 536 793
-
Historical Cost*
Up to 1 month
ZWL
1 month to 3
months
ZWL
3 months to 1
year
ZWL
1 year to 5 years
ZWL
Total
ZWL
103 502 091
-
-
-
-
-
-
-
103 502 091
-
31 277 619
3 363 761
16 375 323
33 185 773
84 202 476
36 821 057
83 929 807
70 896 453
201 938 222
393 585 539
42 492 142
-
-
-
42 492 142
214 092 909
87 293 568
87 271 776
235 123 995
623 782 248
226 078 385
31 203 965
4 458 392
114 291
261 855 033
-
-
-
4 451 329
56 665 849
-
211 665
-
-
-
-
-
-
56 665 849
102 240 322
102 240 322
-
-
211 665
4 451 329
Total liabilities (contractual maturity)
230 529 714
88 081 479
4 458 392
102 354 613
425 424 198
Liquidity gap
Cumulative gap
(16 436 805)
(787 911)
82 813 384
132 769 382
198 358 050
(16 436 805)
(17 224 716)
65 588 668
198 358 050
-
Tribe28ANNUAL REPORT 2023 86
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Maturity profile for contingent liabilities
The table below shows the contractual expiry by maturity of the Group’s contingent liabilities and facilities approved but not drawn down.
As at 31 December 2023
Guarantees
Commitments to lend
Irrevocable letters of credit
As at 31 December 2022
Guarantees
Commitments to lend
Irrevocable letters of credit
Historical Cost*
On Demand
ZWL
0 to 1 month
ZWL
1 to 3 months
ZWL
3 months to 1
year
ZWL
1 year to 5
years
ZWL
Total
ZWL
-
-
-
-
122 094
394 746
18 524 676
-
-
-
-
-
-
-
-
-
19 041 517
-
-
122 094
394 746
18 524 676
-
19 041 517
Historical Cost*
On Demand
ZWL
0 to 1 month
ZWL
1 to 3 months
ZWL
3 months to 1
year
ZWL
1 year to 5
years
ZWL
Total
ZWL
-
-
-
71 515 203
19 379 349
425 291 665
-
-
-
-
-
-
-
-
-
516 186 217
-
-
-
71 515 203
19 379 349
425 291 665
-
516 186 217
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.
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 on-site inspection on the Group’s banking subsidiary on 24 June 2021. Below are the final ratings
from the on-site examination.
Tribe28ANNUAL REPORT 2023 87
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
CAMELS* Ratings
CAMELS Component
Capital Adequacy
Asset Quality
Management
Earnings
Liquidity
Sensitivity to Market Risk
Composite Rating
Latest RBS**
Ratings
30/06/2021
Previous RBS
Ratings
24/11/2016
Previous RBS
Ratings
30/06/2013
Previous RBS
Ratings
31/01/2008
2
2
2
2
2
2
2
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.
34.9.2.
Summary RAS ratings
RAS Component
Overall Inherent Risk
Overall Risk Management Systems
Overall Composite Risk
Direction of Overall Composite Risk
*** RAS stands for Risk Assessment System.
Latest RBS**
Ratings
30/06/2021
Previous RBS
Ratings
24/11/2016
Previous RBS
Ratings
30/06/2013
Previous RBS
Ratings
31/01/2008
Moderate
High
High
High
Acceptable
Acceptable
Acceptable
Acceptable
Moderate
Stable
Moderate
Stable
Moderate
Stable
Moderate
Stable
34.9.2.1.
Summary risk matrix – 30 June 2021 on - site examination
Type of Risk
Credit
Liquidity
Interest Rate
Foreign Exchange
Strategic Risk
Operational Risk
Legal & Compliance
Reputation
Overall
KEY
High
Level of Inherent Risk
Level of Inherent
Risk
Adequacy of Risk
Management
Systems
Overall
Composite
Risk
Direction of Overall
Composite Risk
Moderate
Moderate
Low
Moderate
Moderate
Moderate
Moderate
Moderate
Moderate
Acceptable
Acceptable
Strong
Strong
Acceptable
Acceptable
Acceptable
Acceptable
Moderate
Moderate
Low
Low
Moderate
Moderate
Moderate
Moderate
Acceptable
Moderate
Stable
Stable
Stable
Stable
Stable
Stable
Stable
Stable
Stable
Moderate/Acceptable
Low
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.
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.
Tribe28ANNUAL REPORT 2023 88
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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.
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
2023
BB+
2022
BB+
2021
BB+
2020
-
2019
BB-
The 2020 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.
The 2023 external ratings were obtained during the month of June 2023 with a long term rating of BB+.
34.10. Regulatory Compliance
There was no significant 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.
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 adequacy of the Bank’s capital is monitored using, among other measures, the rules and ratios established by the Basel Committee on
Banking Supervision (BIS rules/ratios) and adopted by the RBZ in supervising the Bank
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.
Tribe28ANNUAL REPORT 2023 89
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The Bank’s regulatory capital position at 31 December was as follows:
Share capital
Share premium
Retained earnings
Inflation Adjusted
Historical Cost*
2023
ZWL ‘000
2022
ZWL ‘000
2023
ZWL ‘000
2022
ZWL ‘000
19 284
19 284
34 189 096
34 189 096
17
31 475
17
31 475
396 664 339
133 510 115
400 020 626
30 254 039
Functional currency translation reserve
7 634 508
7 634 508
11 620
11 620
Less: capital allocated for market and operational risk
( 45 690 772)
( 24 678 018)
( 45 690 772)
( 5 135 505)
Tier 1 capital
392 816 455
150 674 985
354 372 965
25 161 647
438 507 228
175 353 003
400 063 738
30 297 151
Tier 2 capital (subject to limit as per Banking Regulations)
96 352 280
16 298 476
107 983 109
Fair valuation gains on land and buildings
78 518 660
2 582 363
90 149 489
Subordinated debt
7 188 128
4 451 329
7 188 128
Stage 1 & 2 ECL provisions – (limited to 1,25% of risk weighted asset
10 645 492
9 264 784
10 645 492
8 688 013
5 833 685
926 323
1 928 005
Tier 1 & 2 capital
489 168 735
166 973 460
462 356 074
33 849 660
Tier 3 capital (sum of market and operational risk capital)
45 690 772
24 678 018
45 690 772
5 135 505
Total capital base
534 859 507
191 651 479
508 046 846
38 985 164
Total risk weighted assets
1 435 692 654
741 182 537
1 435 692 654
154 240 369
Tier 1 ratio
Tier 2 ratio
Tier 3 ratio
Total capital adequacy ratio
RBZ minimum required
27.36%
6.71%
3.18%
37.25%
12.00%
20.33%
2.20%
3.33%
25.86%
12.00%
24.68%
7.52%
3.18%
35.39%
12.00%
16.31%
5.63%
3.33%
25.28%
12.00%
Tribe28ANNUAL REPORT 2023 90
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
35. 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 2023
Assets
ZWL
ZWL
USD
ZWL
ZAR
ZWL
GBP
ZWL
EUR
ZWL
BWP
ZWL
CAD
ZWL
AUD
ZWL
CNY
ZWL
Total
ZWL
Inflation Adjusted
Cash and cash equivalents
( 14 350 730)
343 433 887
15 411 490
2 533 179
2 166 579
2 043 742
2 025
612 344
530 772
352 383 289
Investment securities
57 828 963
90 826 645
Trade and other investments
-
-
-
-
Loans and advances
Other assets
Non-current assets held for sale
Intangible assets
Property and equipment
Investment properties
Deferred tax
Liabilities and equity
Deposits
Current tax liabilities
Other liabilities
Borrowings
Deferred tax liabilities
Subordinated term loan
Redeemable ordinary shares
Equity
105 764 881
388 767 130
4 393
9 975 576
44 441 345
30
-
3 374 834
158 642 788
268 101 729
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2 566 889
-
-
68
30
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
17
-
-
-
-
-
-
-
-
-
-
-
148 655 609
2 566 889
494 536 518
54 416 951
-
3 374 834
158 642 788
268 101 729
-
589 338 044
867 469 007
15 415 912
2 533 179
4 733 535
2 043 772
2 025
612 361
530 772
1 482 678 607
499 192 976
29 160 065
161 741
16 133
4 107 692
-
94 313 097
5 026 411
240 823 375
22 465 942
68 350 958
-
-
-
531 439 275
7 188 128
-
-
-
-
-
-
-
-
-
-
15
-
-
-
-
-
1 438 227 374
63 840 546
161 741
16 148
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
528 530 915
4 107 692
99 339 523
263 289 317
68 350 958
7 188 128
-
531 439 275
-
1 502 245 808
Net foreign exchange position
( 848 889 330)
803 628 462
15 254 171
2 517 031
4 733 535
2 043 772
2 025
612 361
530 772
( 19 567 201)
As at 31 December 2022
Assets
Cash and cash equivalents
( 1 426 026)
98 712 876
3 021 675
488 743
2 169 296
535 527
Investment securities
Trade and other investments
Loans and advances
Other assets
Non-current assets held for sale
Intangible assets
Property and equipment
Investment properties
Deferred tax
Liabilities and equity
Deposits
Current tax liabilities
Other liabilities
Borrowings
Deferred tax liabilities
Subordinated term loan
Redeemable ordinary shares
Equity
80 510 025
911 592
-
-
-
-
40 933 884
181 475 352
8 292
42 492 142
1 829 062
4 760 955
84 498 274
108 688 700
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
16
-
-
-
-
-
-
-
314 049
-
-
76
313
-
-
-
-
-
-
-
-
-
-
-
-
363 198 608
280 188 228
3 029 967
488 759
1 531 545
510 642
113 752 028
140 124 995
777 226
77 525
298 546
688 657
211 665
-
32 486 330
24 153 782
( 5 716 914)
107 957 235
26 049 115
4 451 329
-
205 010 897
-
-
-
-
-
-
-
-
-
-
-
-
71
-
-
-
-
-
-
-
19 635
6 031
-
-
-
-
-
-
-
-
-
-
376 244 450
272 236 012
777 226
77 596
29 027
161 842
Net foreign exchange position
( 13 045 842)
7 952 216
2 252 741
411 163
1 502 518
348 800
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
103 502 091
80 510 025
1 225 641
222 417 933
42 492 142
1 829 062
4 760 955
84 498 274
108 688 700
-
-
649 924 823
-
-
-
-
-
-
-
-
255 718 977
211 665
56 665 849
102 240 321
26 049 115
4 451 329
-
205 010 897
-
650 348 153
-
( 423 330)
Tribe28ANNUAL REPORT 2023 91
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As at 31 December 2023
Assets
Cash and cash equivalents
Investment securities
Trade and other investments
Loans and advances
Other assets
Non-current assets held for sale
Intangible assets
Property and equipment
Investment properties
Deferred tax
Liabilities and equity
Deposits
Current tax liabilities
Other Liabilites
Borrowings
Deferred tax liabilities
Subordinated term loan
Equity
ZWL
ZWL
USD
ZWL
ZAR
ZWL
GBP
ZWL
EUR
ZWL
BWP
ZWL
CAD
ZWL
AUD
ZWL
CNY
ZWL
Total
ZWL
Historical Cost*
( 14 350 730)
343 433 887
15 411 490
2 533 179
2 166 579
2 043 742
2 025
612 344
530 772
352 383 289
57 828 963
90 826 645
-
-
-
-
105 764 881
388 767 130
4 393
7 257 355
44 441 345
30
-
17 052
127 080 556
268 101 729
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2 566 889
68
96
-
-
-
-
-
-
-
30
0
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
17
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
148 655 609
2 566 889
494 536 518
51 698 826
-
17 052
127 080 556
268 101 729
-
551 699 809
867 469 007
15 415 912
2 533 179
516 801
111 509
2 025
612 361
530 772
1 445 040 470
499 192 976
29 160 065
161 741
16 133
4 107 692
-
92 882 926
5 026 411
240 823 375
22 465 942
58 121 957
-
-
7 188 128
505 460 311
-
-
-
-
-
-
-
15
-
-
-
1 400 589 237
63 840 546
161 741
16 148
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
528 530 915
4 107 692
97 909 352
263 289 317
58 121 957
7 188 128
505 460 311
-
1 464 607 672
Net foreign exchange position
( 848 889 428)
803 628 462
15 254 171
2 517 031
516 801
111 509
2 025
612 361
530 772
( 19 567 202)
As at 31 December 2022
Assets
Cash and cash equivalents
Investment securities
Trade and other investments
Advances and other assets
Other assets
Non-current assets held for sale
Intangible assets
Property and equipment
Investment properties
Deferred tax
Liabilities and equity
Deposits
Current tax liabilities
Other Liabilites
Borrowings
Deferred tax liabilities
Subordinated term loan
Equity
( 296 757)
20 542 187
628 812
101 708
451 431
111 443
16 754 166
189 703
-
-
-
-
8 518 357
37 765 090
1 726
8 842 631
380 629
990 757
17 584 123
22 618 160
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3
-
-
-
-
-
-
-
65 354
-
-
16
65
-
-
-
-
-
-
-
-
-
-
-
-
75 581 770
58 307 277
630 537
101 711
516 801
111 509
23 671 841
29 160 065
161 741
16 133
62 127
143 310
44 048
-
6 760 418
5 026 411
( 1 189 692)
22 465 942
5 420 831
926 323
42 662 846
-
-
-
-
-
-
-
-
-
15
-
-
-
-
-
4 086
1 255
-
-
-
-
-
-
78 296 614
56 652 418
161 741
16 148
66 214
144 565
Net foreign exchange position
( 2 714 844)
1 654 859
468 796
85 563
450 587
( 33 056)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
21 538 825
16 754 166
255 056
46 285 257
8 842 631
380 629
990 757
17 584 123
22 618 160
-
-
135 249 605
-
-
-
-
-
-
53 215 217
44 048
11 792 185
21 276 250
5 420 831
926 323
42 662 846
-
135 337 700
-
( 88 094)
Tribe28ANNUAL REPORT 2023 92
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
36. SEGMENT INFORMATION
For management purposes, the Group is organised into six main operating segments based on products and services as follows:
Retail banking
Corporate banking
Treasury
International banking
Digital Banking
Real Estate
Other
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.
This is the property company in the Group.
Includes other items like head office related transactions and developing business lines for the
Group.
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 company 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 counter party amounted to 10% or more of the Group’s total revenue in 2023
or 2022.
The following table presents income and profit and certain assets and liabilities information regarding the Group’s operating segments and
service units:
Consumer
Banking & Value
Added Services
ZWL ‘000
Business
Banking
ZWL ‘000
Treasury
Banking
ZWL ‘000
Digital Banking
ZWL ‘000
Real Estate
ZWL ‘000
Microfinance
ZWL ‘000
Other
ZWL’000
Total
ZWL’000
Inflation Adjusted
For the year ended 31 December 2023
Income
Third party income
Inter-segment income
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
Interest and similar expense
( 10 249 208)
( 15 082 353)
( 4 392 566)
137 494 533
93 434 362
40 043 738
98 854 048
8 972 307
3 973 150
260 284 653
642 660 570
-
-
-
-
-
396 221
-
-
-
-
396 221
( 29 724 126)
127 245 325
78 352 009
35 651 172
98 854 048
9 368 528
3 973 150
260 284 653
613 332 664
Net operating income
Other material non-cash items
Impairment losses on financial assets measured at amortised cost
( 4 897 926)
( 3 239 757)
( 17 700)
-
-
-
-
-
-
-
-
-
-
-
-
-
( 238 941)
( 8 394 325)
( 5 473 365)
( 5 473 365)
( 2 710 637)
( 2 710 637)
( 1 386 126)
( 1 386 126)
66 978 048
40 636 630
18 660 696
52 583 377
4 731 626
2 113 436
136 435 668
322 139 481
-
-
-
-
-
-
-
-
-
-
-
-
( 46 710 860)
( 46 710 860)
-
51 967 431
Total comprehensive income for the year
66 978 048
40 636 630
18 660 696
52 583 377
4 731 626
2 113 436
89 724 808
327 396 052
As at 31 December 2023
Total assets
Total liabilities
239 325 417
378 121 683
217 439 428
73 677 584
7 999 176
397 196 352
281 153 516
180 507 195
26 588 116
-
-
-
585 682 521
1 502 245 809
78 173 227
963 618 406
Tribe28ANNUAL REPORT 2023 93
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The following table presents income and profit and certain assets and liabilities information regarding the Group’s operating segments and
service units:
Consumer
Banking & Value
Added Services
ZWL ‘000
Business
Banking
ZWL ‘000
Treasury
Banking
ZWL ‘000
International
Banking
ZWL ‘000
Digital Banking
ZWL ‘000
Microfinance
ZWL ‘000
Other
ZWL’000
Total
ZWL’000
Inflation Adjusted
For the year ended 31 December 2022
Income
Third party income
Inter-segment income
Interest and similar expense
Net operating income
Other material non-cash items
46 056 102
73 783 488
15 371 963
3 044 596
34 981 800
-
-
-
-
( 6 080 031)
( 9 740 423)
( 2 029 308)
( 401 928)
-
-
39 976 070
64 043 065
13 342 655
2 642 668
34 981 800
Impairment losses on financial assets measured at amortised cost
( 978 069)
( 617 116)
Depreciation of property and equipment
( 377 423)
( 8 273)
-
-
-
-
( 1 150)
( 203)
-
-
-
-
( 1 686)
( 206 693)
-
-
-
-
15 321 431
24 545 470
5 113 774
1 098 331
13 407 302
-
-
-
-
-
-
-
-
-
-
Depreciation of right of use assets
Amortisation of intangible assets
Segment profit/(loss)
Income tax charge
Revaluation of land and buildings, net of tax
-
-
-
-
-
-
-
-
-
-
-
58 899 877
232 137 826
-
-
( 12 393 659)
( 30 645 349)
46 506 218
201 492 477
( 0)
( 1 596 336)
( 2 270 749)
( 2 865 028)
( 345 627)
( 345 627)
( 1 392 072)
( 1 392 072)
17 740 321
77 226 628
( 19 550 861)
( 19 550 861)
-
2 583 050
Total comprehensive income for the year
15 321 431
24 545 470
5 113 774
1 098 331
13 407 302
-
( 5 818 988)
60 258 817
As at 31 December 2022
Total assets
Total liabilities
103 574 386
163 642 130
94 102 647
31 885 917
3 461 854
181 642 661
128 574 878
82 548 108
12 159 065
-
-
-
253 469 557
650 136 492
35 749 555
440 674 266
Tribe28ANNUAL REPORT 2023 94
37. OTHER SUPPLEMENTAL INFORMATION
HISTORICAL FIVE YEAR FINANCIAL SUMMARY
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Historical Cost*
2023
ZWL’000
2022
ZWL’000
2021
ZWL’000
2020
ZWL’000
2019
ZWL’000
Interest income
Interest expense
Net interest income
Fee and commissions income
Net foreign exchange gains
Revenue
Other income
Operating income
Operating expenditure
72 076 896
15 800 168
2 568 881
501 216
70 557
( 14 651 080)
( 4 591 382)
( 751 921)
( 90 638)
( 16 894)
57 425 816
11 208 786
1 816 961
137 756 521
10 705 516
2 927 160
136 315 649
4 048 384
76 799
410 578
815 541
217 274
53 663
99 863
87 242
331 497 985
25 962 685
4 820 920
1 443 393
240 768
249 250 716
17 940 335
2 107 419
1 226 847
206 623
580 748 701
43 903 021
6 928 339
2 670 240
447 391
( 130 732 838)
( 13 733 992)
( 2 825 609)
( 814 190)
( 105 938)
Operating income before impairment charge and loss on net monetary position
450 015 863
30 169 030
4 102 730
1 856 050
341 453
Impairment losses on financial assets measured at amortised cost
( 14 961 385)
( 1 191 393)
( 248 107)
( 127 975)
( 11 049)
Profit before tax
Taxation
Profit for the period
Other comprehensive income
435 054 477
28 977 636
3 854 623
1 728 075
330 404
( 49 494 612)
( 3 509 130)
( 912 597)
85 514
( 44 505)
385 559 866
25 468 507
2 942 026
1 813 589
285 899
Revaluation gains on land and buildings, net of tax
82 399 807
5 833 685
848 731
891 186
175 943
Translation gain on change in functional currency, net of tax
-
-
-
-
11 620
Total comprehensive income for the period
467 959 672
31 302 191
3 790 757
2 704 775
473 462
Tribe28ANNUAL REPORT 2023 95
HISTORICAL FIVE YEAR FINANCIAL SUMMARY
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Historical Cost*
2023
ZWL’000
2022
ZWL’000
2021
ZWL’000
2020
ZWL’000
2019
ZWL’000
SHAREHOLDERS’ FUNDS
Share capital
Share premium
Treasury shares reserve
Functional currency translation reserve
Revaluation reserve
Share Option Reserve
Retained earnings
Total equity
124
115
3 174 723
172 496
( 394)
11 620
( 394)
11 620
84
19 122
( 7)
11 620
84
19 122
-
84
19 184
-
11 620
11 620
90 149 489
7 749 682
1 915 997
1 067 266
176 080
359 242
129 569
27 768
-
-
411 765 508
30 165 681
5 085 120
2 143 096
329 506
505 460 310
38 228 767
7 059 704
3 241 188
536 474
Subordinated term loan
7 188 128
926 323
223 115
132 633
14 335
Total shareholders’ funds and shareholders’ liabilities
512 648 438
39 155 090
7 297 154
3 388 156
579 169
LIABILITIES
Deposits
Other liabilities
Borrowings
Current tax liabilities
Deferred tax liabilities
Total liabilities
528 530 915
53 215 217
10 425 947
6 413 943
1 267 778
97 909 352
11 792 185
2 750 917
263 289 317
21 276 250
5 914 585
4 107 692
-
236 049
58 121 957
3 964 776
741 544
57 205
174 728
98 021
625
951 959 233
90 248 428
20 069 042
6 645 876
1 366 424
Total shareholders’ funds and liabilities
1 464 607 671
129 403 518
27 366 196
10 034 032
1 945 593
ASSETS
Cash and cash equivalents
Investment securities
Deferred tax assets
Current tax assets
Loans, advances
Other assets
Current assets held for sale
Trade and other investments
Current tax assets
Investment properties
Property and equipment
Intangible assets
352 383 289
21 538 825
4 872 262
1 964 637
492 304
148 655 609
16 754 166
4 010 434
1 081 820
107 166
-
-
-
-
-
-
-
-
-
-
494 536 518
46 285 257
9 584 609
3 730 887
817 960
51 698 826
8 504 329
2 265 354
-
380 629
-
-
-
2 566 889
255 056
36 500
10 878
-
44 047
-
-
-
-
1 612
-
268 101 729
22 618 160
3 518 133
1 653 496
229 868
127 080 556
12 999 902
3 065 495
1 588 179
295 285
17 052
23 147
13 409
4 135
1 398
Total assets
1 464 607 671
129 403 518
27 366 196
10 034 032
1 945 593
Tribe28ANNUAL REPORT 2023 96
HISTORICAL FIVE YEAR FINANCIAL SUMMARY
Share performances
Historical Cost*
2023
ZWL’000
2022
ZWL’000
2021
ZWL’000
2020
ZWL’000
2019
ZWL’000
Net asset value per share (ZWL cents)
123000.84
9600.51
1746.71
724.70
136.28
Basic earnings per share (ZWL cents)
67073.05
6395.99
1591.59
448.72
71.56
Dividend per share (ZWL cents)
Dividend cover (times)
Price/earnings ratio
-
-
45.00
142.13
-
-
1.01
1.25
0.63
Closing price per share (ZWL cents)
68000
3767
1001.25
-
-
0.89
400
-
-
0.57
41
Market capitalisation (ZWL)
279 439 571 928
15 000 012 481
4 046 769 036
1 616 686 756
165 710 392
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 (%)
Historical Cost*
2023
ZWL’000
2022
ZWL’000
2021
ZWL’000
2020
ZWL’000
2019
ZWL’000
60.82%
21.81%
33.71%
73.62%
14.49%
28.77%
9.27%
39.34%
47.63%
25.32%
24.91%
7.66%
44.91%
54.60%
32.34%
0.9234
0.2696
0.3528
0.8185
-0.0495
27.03
4.03
58.8
47.37
21.85
1. The return on shareholders’ funds is based on shareholders’ funds at the end of the year. Includes charge for impairment of losses on loans
and advances.
2. 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.
38. EVENTS AFTER REPORTING DATE
Subsequent to year end, the Group signed an agreement with the African Development Bank (AFDB) for a US$15 million guarantee facility.
This is anticipated to unlock trade finance opportunities for the Group’s banking clients The Group has also entered into in negotiations for a
potential acquisition of a complementary business and will continue providing updates to the investing public via Cautionary Announcements,
the first of which was published on 06 March 2024. The Group anticipates that this acquisition will enable it to further its strategic objectives
Tribe28ANNUAL REPORT 2023 97
NOTICE TO MEMBERS
Notice is hereby given that the 29th Annual General Meeting of Members of NMBZ Holdings Limited will be held at the NMB Bank Limited Head
Office, 19207 Liberation Legacy Way, Harare on Wednesday 15 May 2024 at 1500 hours for the following purposes:
ORDINARY BUSINESS
1. To receive and adopt the Financial Statements for the year ended 31 December 2023, together with the reports of the Directors and Auditors
thereon.
2. To re-appoint Directors
•
•
•
In accordance with Article 83 of the Company’s Articles of Association Ms. Jean Maguranyanga retires by rotation. Being eligible, the
Director offers herself for re-election.
In accordance with Article 83 of the Company’s Articles of Association Mr. James de la Fargue retires by rotation. Being eligible, the Director
offers himself for re-election.
In accordance with Article 91.2 of the Company’s Articles of Association Mr. Pearson Gowero who was appointed as a Director of the
Company with effect from 26 April 2023 retires from office. Being eligible, the Director offers himself for re-election.
3. To approve Directors’ fees for the year ended 31 December 2023.
4. To approve Messrs Ernst & Young’s remuneration for the year ended 31 December 2023.
5. To appoint KPMG as the Company’s Auditors for the year ending 31 December 2024. Ernst & Young were appointed as the Company’s
auditors in 2017. The company sought a 2-year extension of the Ernst & Young term which extension was granted by the Reserve Bank of
Zimbabwe and by the shareholders. The term ends on conclusion of the 2024 Annual General Meeting. As such, the Directors propose the
appointment of KPMG as the auditors of the Company until the conclusion of the next Annual General Meeting.
SPECIAL BUSINESS
SPECIAL RESOLUTION
1. Share Buy Back
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:
•
•
•
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.
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.’’
Notes:
1. A member of the company entitled to attend and vote at this meeting is entitled to appoint a proxy to attend, speak and vote in his/her
stead. A proxy need not be a member of the company.
2. 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.
3. Please be advised that the 2023 Annual Report can be accessed on the company’s website: www.nmbz.co.zw. Electronic copies of the
2023 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
V. T. MUTANDWA
COMPANY SECRETARY
22 April 2024
Tribe28ANNUAL REPORT 2023 98
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 retiring are Ms. Jean Maguranyanga and Mr. James de la Fargue. They being eligible,
the directors offer themselves for re-election. Mr. Pearson Gowero was appointed by the directors effective 26 April 2023. In accordance with
Article 91.2 of the Articles of Association of the Company, he retires from the board. Being eligible he offers himself for re-election. The re-
election of each Director will be voted on separately. The profiles of the retiring Directors are as below:
Jean Maguranyanga – Independent Non-Executive Director
Jean Maguranyanga is an independent non-executive director who was appointed to the Board on 10 July 2015. Jean is a lawyer by profession
with over 25 years’ experience. She commenced her career as a Prosecutor in the Ministry of Justice Legal and Parliamentary affairs and
moved after one year to the Parliament of Zimbabwe. 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.
James de la Fargue
James de la Fargue represents African Century on the Board. He was appointed to the Board on 4 May 2016. He is a holder of a BA Business
Organisation (Herrit-Watt University), ACCA, Diplomas in Marketing & Marketing Research and a Certificate in General Agriculture. James
worked for a number of international organizations including Deloitte & Touché Management Consultants, Unilever PLC and Chargeurs SA. He
is a former president of the Zimbabwe Tobacco Association and worked at MBCA as a senior executive in charge of Corporate Finance. James
was involved in business consultancy work and management of an integrated farm in Centenary from 1998 to 2008. Since 2009, James has
been with African Century Limited where he initially consulted for the group and later took up a position as Business Development Director of
African Century Financial Holdings and as Executive Chairman of Frango King. He currently is the Chief Executive Officer of Lake Harvest, the
largest tilapia farming operation in Africa.
Pearson Gowero
Pearson Gowero is a seasoned business leader with extensive experience working in consumer facing businesses. He is a holder of a Bachelor
of Science Degree in Economics from the University of Zimbabwe and a Masters in Business Leadership from the University of South Africa.
He served for SAB Miller Africa as the Country Managing Director for Zambia and Malawi from September 2006 to June 2011. He has held
several leadership and management positions during his career at Delta Corporation Limited in Marketing, Sales and Distribution and General
Management. He served as Chief Executive Officer of Delta Corporation Limited, (an associate of ABInBev) from June 2012 until his retirement in
June 2021. He has sat on various boards of listed companies, subsidiaries and associates of the Delta Group. He has also served as a member
of the National Council of the Confederation of Zimbabwe Industries. Currently, Pearson is the Board Chairman of SeedCo Limited. Additionally,
he is a director of Zambeef Products PLC Zambia and Marksbury Investments Private Limited.
Resolution 3
Shareholders are requested to approve Director’s fees. The Directors’ fees for 2023 amounted to ZWL 2 674 568 054 in inflation adjusted terms.
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 Other 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 2023, which audit fee amounted to ZWL 1 686 863 190 in inflation adjusted terms.
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 Other Business Entities Act [Chapter 24:31]. This resolution
therefore proposes the appointment of auditors. In accordance with the Banking Act [Chapter 24:20], the Company is required to rotate its
auditors every 5 years. Messrs Enrst & Young served their 5-year term which expired after the 2021-year end audit. However due to capacity
challenges in the market, the bank sought a 2-year extension of the Ernst & Young term which extension was granted by the Reserve Bank of
Zimbabwe. The Ernst & Young term expires after the conclusion of the 2023-year end audit. The Directors propose the appointment of KPMG
as the Company’s auditors until the next Annual General Meeting. The Engagement Partner is Temba Mudidi, a Registered Public Auditor, PAAB
practice number 0437.
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.
Tribe28ANNUAL REPORT 2023 99
NMBZ HOLDINGS LIMITED ANNUAL GENERAL MEETING PROXY FORM
I / We ……………………………………………………………………………………………………………………………………….............……………………………………………………………………………………………………………………………………………………………
Of ………………………………………………………………………………………………………………………………………………….............…………………………………………………………………………………………………………………………………………………………
Being a member of NMBZ HOLDINGS LIMITED and entitled to vote, hereby appoint
…………………………………………………………………………………………………………………………………………………….............……………………………………………………………………………………………………………………………………….............…………
Of ……………………………………………………………………………………………………………………………………………….............……………………………………………………………………………………………………………………………………….............………
Or failing him ……………………………………………………………………………………………………………………..............……………………………………………………………………………………………………………………………………….............…………
Of ……………………………………………………………………………………………………………………………………………….............……………………………………………………………………………………………………………………………………….............………
As my/our proxy to vote on my / our behalf at the ANNUAL GENERAL MEETING of the Company to be held on Wednesday 15 May 2024 at 1500
hours and at any adjournment thereof.
Signed this …………………………………………day of …………………………………..2024
Signature of member …………………………………………………………………………………………………...............
Note:
In terms of section 171 of the Companies and Other Business Entities Act [Chapter 24:31] a member of the Company is entitled to appoint one
or more proxies to act in the alternative as his or her proxy and to attend, vote and speak in his / her stead. A proxy need not be a member of
the Company.
Tribe28ANNUAL REPORT 2023 100
SHAREHOLDERS’ ANALYSIS
Size of shareholding
0 – 10,000
10,001 - 100,000
100,001 - 1000,000
1,000,001 - 10,000,000
10,000,001 and above
Total
Size of shareholding
0 – 10,000
10,001 - 100,000
100,001 - 1000,000
1,000,001 - 10,000,000
10,000,001 and above
Total
2023
Industry
Local Companies
Employees
Estate Late
External Companies
Fund Managers
Insurance Companies
Investment Trusts And Property
Local Residents
Nominees Local
Non Residents
Non Resident Individuals
Other Corporate Holdings
Pension Funds
Total
2022
Industry
Local Companies
Employees
Estate Late
External Companies
Fund Managers
Insurance Companies
Investment Trusts And Property
Local Residents
Nominees Local
Non Residents
Non Resident Individuals
Other Corporate Holdings
Pension Funds
Total
2023 Number of
shareholders
% of Holders
2023 Issued Shares
% Shareholding
3,873
93.96%
169
56
14
10
4,122
4.10%
1.36%
0.34%
0.24%
100%
2,924,609
5,962,104
18,933,672
53,903,271
354,564,882
436,288,538
0.67%
1.37%
4.34%
12.35%
81.27%
100%
2022 Number of
shareholders
% of Holders
2022 Issued Shares
% Shareholding
3,911
168
60
13
10
4,162
93.97%
4.04%
1.44%
0.31%
0.24%
100%
3, 001,688
5,839,499
20,086,238
45,521,721
329,948,187
401,395,645
0.74%
1.44%
4.97%
11.26%
81.59%
100%
Shareholders
% of shareholders
Shares
% of Shares
319
238
4
8
3
8
38
3,326
49
3
45
3
78
7.73
5.77
0.10
0.19
0.07
0.19
0.92
80.71
1.19
0.07
1.09
0.07
1.89
62,867,860
804,414
3,114
236,930,439
2,510
57,070,641
34,793,919
17,006,356
2,033,831
611,538
1,903,752
2,897
22,257,267
14.41
0.18
-
54.31
-
13.08
7.97
3.90
0.47
0.14
0.44
-
5.10
4,122
100.00
436,288,538
100.00
Shareholders
% of shareholders
Shares
% of Shares
312
239
3
5
3
8
35
3,375
50
6
45
3
78
7.50
5.74
0.08
0.12
0.08
0.19
0.84
81.09
1.20
0.14
1.08
0.07
1.87
47,108,805
733,263
2,229
84,627,328
2,510
58,187,650
35,231,869
16,616,688
1,906,192
134,581,255
2,251,959
3,369
23,144,216
11.65
0.18
-
20.93
-
14.39
8.71
4.11
0.47
33.28
0.56
-
5.72
4,162
100.00
404,397,333
100.00
Tribe28ANNUAL REPORT 2023 101
Rank
1
2
3
4
5
6
7
8
9
10
Rank
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
MAKOMO ENGINEERING PVT LTD
ALSACE TRUST
HIGHPERFORMANCE LUBES t/a CASTROL
OLD MUTUAL ZIMBABWE LIMITED
STANBIC NOMINEES (PRIVATE) LIMITED
AFRICAN CENTURY FINANCIAL INVESTMENTS LTD NNR
ARISE B V
OLD MUTUAL LIFE ASSURANCE COMPANY OF ZIMBABWE LIMITED
AFRICINVEST FINANCIAL SECTOR HOLDING
LALIBELA LIMITED-NNR
OLD MUTUAL ZIMBABWE LIMITED
ALSACE TRUST
MORGAN AND CO MULTI-SECTOR ETF
CORNERSTONE TRUST
STANBIC NOMINEES (PRIVATE) LIMITED
Shareholder
2023 number of
shares
% of shareholding
84,767,523
79,449,374
40,809,943
40,707,918
25,625,968
20,909,903
18,392,446
15,976,345
15,624,175
12,257,453
19.43
18.21
9.35
9.33
5.87
4.79
4.22
3.66
3.58
2.81
354,521,048
81.25
Shareholder
2022 number of
shares
% of shareholding
78,247,632
73,338,528
40,637,936
37,576,870
23,654,947
17,518,688
16,885,381
16,288,544
15,381,382
12,511,967
332,041,875
19.35
18.14
10.05
9.29
5.85
4.33
4.18
4.03
3.8
3.09
82.11
Tribe28ANNUAL REPORT 2023 102
MEMBERS’ DIARY
Financial year end
Reports:-
- Announcement of annual results
- Annual financial statements posted to shareholders
- Annual General Meeting
- Announcement of AGM results
- Announcement of the 2024 half-year results
SECRETARY AND REGISTERED OFFICE
Company Secretary
V. T. MUTANDWA
Registered Offices
NMB Head Office
31-Dec-23
March 2024
March 2024
15-May-24
16-May-24
Aug-24
NMB Centre
19207 Liberation Legacy Way, Borrowdale
George Silundika Avenue/Leopold Takawira Street
Harare
Zimbabwe
Bulawayo
Zimbabwe
Telephone: +263 08688003347 / 08677008565 - 6 / +(263) (2922) 701169 / +(263) (2922) 68535
Website: http://www.nmbz.co.zw
Email: enquiries@nmbz.co.zw
Auditors
Ernst & Young Chartered Accountants (Zimbabwe)
1st floor, Angwa City
Corner Angwa Street / Kwame Nkrumah Avenue
Harare
Zimbabwe
Transfer Secretaries
First Transfer Secretaries
1 Armagh Avenue
Eastlea
Harare
Zimbabwe
Legal Advisors
Gill, Godlonton & Gerrans
7th Floor, Beverley Court
100 Nelson Mandela Avenue
Harare
Zimbabwe
Tribe28ANNUAL REPORT 2023 Address
19207, Liberation Legacy Way
PO Box 2564, Harare, Zimbabwe
Contact
Phone: 086 8800 3347, 086 7700 8655, 086 7700 8656
Email: enquiries@nmbz.co.zw
Web: www.nmbz.co.zw