Summary statements of changes in equity
CONSOLIDATED | SEPARATE |
Basis of preparation
The summary consolidated and separate financial statements are prepared in order to meet the requirements of the Financial Services Act, 2010 of Malawi
INDEPENDENT AUDITOR'S REPORT TO THE BOARD OF DIRECTORS OF FMBCAPITAL HOLDINGS PLC
Report of the independent auditor on the summary consolidated and separate financial statements
AUDITED SUMMARY CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
for the year ended 31 December 2022
TOTAL | |||
PROFIT | OPERATING | CUSTOMER | CUSTOMER |
for the year ended 31 December | AUDITED | |||
2022 | 2021 | 2022 | 2021 | |
USD'000 | ||||
Opening equity | 181 362 | 136 141 | 120 008 | 119 742 |
Profit for the year | 61 195 | 40 446 | 11 958 | 4 199 |
Total other comprehensive | ||||
(loss)/income | (31 573) | 11 720 | - | - |
Dividends declared and paid | (13 676) | (3 933) | (6 146) | (3 933) |
Movements in other reserves | (426) | (3 012) | - | - |
Closing equity | 196 882 | 181 362 | 125 820 | 120 008 |
Summary statements of financial position
for summarised financial statements and to comply with the Malawi Stock Exchange Listing Requirements which require the publication of audited results by a listed entity. The summarised financial statements have been prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards ("IFRS"). The summary consolidated and separate financial statements, without reference to the detailed notes, are derived from the audited consolidated and separate financial statements of FMBcapital Holdings Plc (the "Company") for the year ended 31 December 2022. These audited consolidated and separate financial statements, which have been prepared in accordance with International Financial Reporting Standards and in compliance with the requirements of the Mauritius Companies Act 2001 in so far as applicable to Global Business Licence companies, are available at the Company's registered office at JTC Fiduciary Services (Mauritius) Limited, Unit 5ABC, 5th Floor, Standard Chartered Tower, 19 Cybercity, Ebѐne, Mauritius.
Opinion
The summary consolidated and separate financial statements, which comprise the summary consolidated and separate statements of financial position as at 31 December 2022, the summary consolidated and separate statements of profit or loss and other comprehensive income, the summary consolidated and separate statements of changes in equity and the summary consolidated and separate statements of cash flows for the year then ended, are derived from the audited financial statements of FMBcapital Holdings Plc (the "Company") for the year ended 31 December 2022.
In our opinion, the accompanying summary consolidated and separate financial statements are consistent in all material respects, with the audited consolidated and separate financial statements of the Company prepared in accordance with International Financial Reporting Standards (IFRSs)andincompliancewiththerequirements of the Mauritius Companies Act 2001, in so far as applicable to Global Business Licence companies.
The Audited Consolidated and Separate Financial Statements and Our Report Thereon
We expressed an unmodified audit opinion on the audited consolidated and separate financial statements in our report dated 17 May 2023. That report also includes the communication of key audit matters that, in our professional judgement, were of most significance in our audit of the consolidated and separate financial statements of the current year.
Responsibilities of Directors for the Summary Consolidated and Separate Financial Statements
The directors are responsible for the preparation of the summary consolidated and separate financial statements on the basis described in the Basis of preparation note.
Auditor's Responsibility
Our responsibility is to express an opinion on whether the summary consolidated and separate financial statements are consistent, in all material respects, with the audited consolidated and separate financial statements based on our procedures, which were conducted in accordance with International Standard on Auditing (ISA) 810 (Revised),
AFTER TAX | INCOME | DEPOSITS | ADVANCES |
51% | 10% | 17% | 18% |
DIVIDEND | RETURN ON | ||
CREDIT | PER SHARE | COST TO | AVERAGE |
LOSS RATIO | (US CENTS)** | INCOME RATIO | EQUITY |
0.77% | 0.49 | 50% | 32% |
CONSOLIDATED | SEPARATE | ADDITIONAL INFORMATION | |||||||||||||
as at 31 December | AUDITED | ||||||||||||||
Investment in subsidiary companies | |||||||||||||||
USD'000 | 2022 | 2021 | 2022 | 2021 | At the end of the reporting period, the Company's portfolio of investments in | ||||||||||
ASSETS | subsidiary companies was unchanged from the previous reporting period and | ||||||||||||||
Cash and balances with central banks | 384 137 | 308 714 | 2 897 | 9 100 | comprised: | Holding % | USD'000 | ||||||||
Money market investments | 212 189 | 280 272 | - | - | Nature of | Type of | |||||||||
Loans and advances to customers | 651 726 | 552 811 | - | - | Name of entity | Business | Investment | 2022 | |||||||
Repurchase agreements | 13 919 | 94 159 | - | - | |||||||||||
First Capital Bank Plc | Equity | ||||||||||||||
Current tax asset | 2 375 | 857 | - | - | 100 | 88 034 | |||||||||
(Malawi) | Banking | Shares | |||||||||||||
Assets held for sale | 133 | 343 | - | - | |||||||||||
Afcarme Zimbabwe | |||||||||||||||
Investments at fair value through | |||||||||||||||
Holdings (Private) | Equity |
Summary Consolidated and Separate Financial
Statements
The summary consolidated and separate financial statements do not contain all the disclosures required by International Financial Reporting Standards. Reading the summary consolidated and separate financial statements and the auditor's report thereon, therefore, is not a substitute for reading the audited consolidated and separate financial statements and the auditor's report thereon. The summary consolidated and separate financial statements and the audited consolidated and separate financial statements do not reflect the effects of events that occurred subsequent to the date of our report on the audited consolidated and separate financial statements.
Engagements to Report on Summary Financial Statements.
Use of this report
This report, including our opinion, has been prepared for and only for the Company's Board of Directors in accordance with Section 37 of the Financial Services Act, 2010 of Malawi and the Malawi Stock Exchange Listing Requirements and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's Board of Directors, for our audit work for this report, or for the opinions we have formed.
Deloitte
Chartered Accountants (Mauritius)
23 May 2023
Summary statements of profit or loss and other comprehensive income
CONSOLIDATED | SEPARATE | |||||
for the year ended 31 December | AUDITED | |||||
USD'000 | 2022 | 2021 | 2022 | 2021 | ||
Interest and similar income | 148 248 | 126 014 | 291 | 251 | ||
Interest expense and similar charges | (38 782) | (28 886) | (2 381) | (2 384) | ||
Net interest income/(expense) | 109 466 | 97 128 | (2 090) | (2 133) | ||
Net fees and commissions | 36 510 | 44 862 | - | - | ||
Income from investments (including | ||||||
investment properties) | 4 337 | 3 892 | 16 366 | 8 152 | ||
Gain on foreign exchange transactions | 39 043 | 25 893 | 292 | 685 | ||
Other operating income | 2 197 | 1 608 | 7 737 | 2 760 | ||
Total non-interest income | 82 087 | 76 255 | 24 395 | 11 597 | ||
Total operating income | 191 553 | 173 383 | 22 305 | 9 464 | ||
Staff and training costs | (47 750) | (44 428) | (4 399) | (1 543) | ||
Premises and equipment costs | (14 293) | (14 704) | (1 904) | (1 345) | ||
Depreciation and amortisation | (8 668) | (8 242) | (946) | (720) | ||
Administration and general expenses | (25 584) | (29 524) | (1 406) | (851) | ||
Total non-interest expenses | (96 295) | (96 898) | (8 655) | (4 459) | ||
Impairment loss on financial assets | (4 202) | (7 058) | - | - | ||
Operating profit | 91 056 | 69 427 | 13 650 | 5 005 | ||
Net monetary loss | (7 662) | (5 129) | - | - | ||
Loss on owner occupied property | - | (3 365) | - | - | ||
Impairment loss on investment in | ||||||
joint venture | (719) | (16 505) | - | - | ||
Fair value gain on investment property | - | 448 | - | - | ||
Share of profit in joint venture | 4 424 | 14 222 | - | - | ||
Profit before income tax expense | 87 099 | 59 098 | 13 650 | 5 005 | ||
Income tax expense | (25 904) | (18 652) | (1 692) | (806) | ||
Profit for the year | 61 195 | 40 446 | 11 958 | 4 199 | ||
Other comprehensive income | ||||||
Items that will not be classified to | ||||||
profit or loss | ||||||
Revaluation surplus on property | 3 351 | - | - | - | ||
Deferred tax on revalued property | 592 | - | - | - | ||
Fair value gain on FVOCI financial assets | 205 | 4 041 | - | - | ||
Deferred tax on FVOCI financial assets | (58) | - | - | - | ||
4 090 | 4 041 | - | - | |||
Items that may be reclassified | ||||||
subsequently to profit or loss | ||||||
Exchange differences on translating | ||||||
foreign operations* | (35 663) | 7 679 | - | - | ||
Total other comprehensive | ||||||
(loss)/income for the year | (31 573) | 11 720 | - | - | ||
Total comprehensive for the year | 29 622 | 52 166 | 11 958 | 4 199 | ||
Profit or loss attributable to: | ||||||
Owners of the parent | 40 089 | 27 206 | 11 958 | 4 199 | ||
Non-controlling interests | 21 106 | 13 240 | - | - | ||
Profit for the year | 61 195 | 40 446 | 11 958 | 4 199 | ||
Total comprehensive attributable to: | ||||||
Owners of the parent | 17 589 | 32 831 | 11 958 | 4 199 | ||
Non-controlling interests | 12 033 | 19 335 | - | - | ||
Total comprehensive income for | ||||||
the year | 29 622 | 52 166 | 11 958 | 4 199 | ||
Basic earnings per share (US cents) | 1.631 | 1.107 | ||||
Diluted earnings per share (US cents) | 1.525 | 1.042 | ||||
* Incorporates effects of hyperinflation.
** Represents first and second interim dividend.
profit or loss | 4 611 | 6 615 | - | - | Limited | Banking | Shares | 100 | 17 670 | |||||||
Investments at fair value through | ||||||||||||||||
First Capital Bank | Equity | |||||||||||||||
other comprehensive income | 5 906 | 5 302 | - | - | (Zambia) Limited | Banking | Shares | 49 | 4 634 | |||||||
Investments in subsidiary companies | - | - | 141 386 | 141 386 | First Capital Shared | Shared | Equity | |||||||||
Investment in joint venture | 15 580 | 11 875 | - | - | Services Limited | Services | Shares | 100 | 4 160 | |||||||
Other assets | 27 061 | 34 370 | 5 441 | 1 436 | First Capital Bank | Equity | 38.6 | 3 047 | ||||||||
Investment property | 4 800 | 4 700 | - | - | Limited (Botswana) | Banking | Shares | |||||||||
Intangible assets | 8 251 | 9 817 | 3 923 | 2 314 | First Capital Bank | Preference | 100 | 2 475 | ||||||||
Right-of-use assets | 6 593 | 5 824 | 42 | 118 | Limited (Botswana) | Banking | Shares | |||||||||
First Capital Bank | Equity | |||||||||||||||
Property and equipment | 54 021 | 55 798 | 786 | 617 | 80 | 21 366 | ||||||||||
S.A. (Mozambique) | Banking | Shares | ||||||||||||||
Deferred tax assets | 2 262 | 3 899 | - | - | ||||||||||||
Total investment in | ||||||||||||||||
Total assets | 1 393 564 | 1 375 356 | 154 475 | 154 971 | ||||||||||||
subsidiary companies | 141 386 | |||||||||||||||
LIABILITIES AND EQUITY | Exchange rate trends | |||||||||||||||
Liabilities | ||||||||||||||||
Balances due to other banks | 47 647 | 209 386 | - | - | 2022 | 2021 | ||||||||||
Customer deposits | 1 039 070 | 887 233 | - | - | Closing | Average | Closing | Average | ||||||||
Other payables | 46 716 | 32 777 | 1 126 | 1 726 | Country | Currency | rate | rate | rate | rate | ||||||
Current tax liabilities | 3 748 | 2 564 | - | - | Botswana | BWP | 12.76 | 12.32 | 11.75 | 11.07 | ||||||
Lease liabilities | 6 572 | 6 341 | 63 | 138 | Malawi | MWK | 1 026.09 | 937.46 | 814.24 | 802.81 | ||||||
Deferred tax liabilities | 7 442 | 5 226 | - | - | Mauritius | MUR | 43.65 | 43.91 | 43.74 | 41.64 | ||||||
Provisions | 5 574 | 6 503 | - | - | Mozambique | MZN | 63.87 | 63.84 | 63.83 | 65.89 | ||||||
Loans payable | 16 679 | 17 165 | 16 679 | 22 312 | Zambia | ZMW | 18.11 | 16.89 | 16.66 | 19.99 | ||||||
Subordinated debt | 12 447 | 16 012 | - | - | Zimbabwe | ZWL | 687.28 | 687.28 | 108.67 | 108.67 | ||||||
Convertible preference shares | 10 787 | 10 787 | 10 787 | 10 787 | ||||||||||||
Debt and other liabilities | ||||||||||||||||
Total liabilities | 1 196 682 | 1 193 994 | 28 655 | 34 963 | ||||||||||||
Balances due to other banks | ||||||||||||||||
Equity | AUDITED | |||||||||||||||
Share capital | 117 409 | 117 409 | 117 409 | 117 409 | ||||||||||||
Restructuring reserve | (54 511) | (54 511) | - | - | USD'000 | 2022 | 2021 | |||||||||
Property revaluation reserve | 10 189 | 6 342 | - | - | ||||||||||||
Balances due to other banks | 15 842 | 106 309 | ||||||||||||||
Loan loss reserve | 3 097 | 2 280 | - | - | ||||||||||||
Currency swap liabilities | 18 153 | 90 078 | ||||||||||||||
Other reserves | 4 181 | 4 010 | - | - | ||||||||||||
Bank of Zambia - TMTRF | 7 484 | - | ||||||||||||||
Foreign currency translation reserve | (50 594) | (24 170) | - | - | ||||||||||||
European Investment Bank (EIB) | - | 633 | ||||||||||||||
Retained earnings | 98 146 | 65 337 | 8 411 | 2 599 | ||||||||||||
FMO Line of Credit | 6 168 | 12 366 | ||||||||||||||
Total equity attributable to equity | ||||||||||||||||
47 647 | 209 386 | |||||||||||||||
holders of the company | 127 917 | 116 697 | 125 820 | 120 008 | ||||||||||||
Maturing as follows | ||||||||||||||||
Non-controlling Interests | 68 965 | 64 665 | - | - | ||||||||||||
Due within 1 year | 43 635 | 195 578 | ||||||||||||||
Total equity | 196 882 | 181 362 | 125 820 | 120 008 | ||||||||||||
Due between 2 and 5 years | 4 012 | 13 808 | ||||||||||||||
Total equity and liabilities | 1 393 564 | 1 375 356 | 154 475 | 154 971 | ||||||||||||
47 647 | 209 386 | |||||||||||||||
Summary statements | In 2020, FCB Zambia secured a targeted medium-term refinancing facility, | |||||||||||||||
Bank of Zambia - Targeted Medium Term Refinancing Facility, for on-lending | ||||||||||||||||
of cash flows | to customers. Interest is payable linked to the Zambia Monetary policy rate | |||||||||||||||
which was 8% per annum. The loan is repayable in quarterly instalments with | ||||||||||||||||
CONSOLIDATED | SEPARATE | interest. The loan was disbursed in three tranches whose maturity dates are | ||||||||||||||
1 September 2023, 4 February 2024 and 8 February 2025. | ||||||||||||||||
for the year ended 31 December | AUDITED | |||||||||||||||
Subordinated debt | ||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
USD'000 | ||||||||||||||||
USD'000 | 2022 | 2021 | ||||||||||||||
Net cash generated from | ||||||||||||||||
Notes issued by FCB Botswana | 12 447 | 16 012 | ||||||||||||||
operating activities | 211 315 | 52 095 | 10 977 | 4 933 | ||||||||||||
Net cash generated from/ | The subordinated debt notes constitute direct, subordinated and unsecured | |||||||||||||||
(used in) investing activities | 93 116 | (143 905) | (2 658) | (1 100) | ||||||||||||
obligations and the terms are unchanged from 31 December 2021. In 2022, | ||||||||||||||||
Net cash (used in)/generated from | ||||||||||||||||
First Capital Bank Botswana (FCB Botswana) issued BWP 15 million (USD 1.2 million). | ||||||||||||||||
financing activities | (191 198) | 122 472 | (14 522) | 1 050 | ||||||||||||
These are floating rate notes maturing on 1 July 2027, which earned interest at | ||||||||||||||||
Net increase in cash and cash | a cumulative rate of 7.96% following introduction of the Monetary Policy rate | |||||||||||||||
(MOPR) by the Bank of Botswana (BOB) in April 2022. | ||||||||||||||||
equivalents | 113 233 | 30 662 | (6 203) | 4 883 | ||||||||||||
Cash and cash equivalents | Loans payable | |||||||||||||||
at beginning of period | 308 755 | 307 795 | 9 100 | 4 217 | ||||||||||||
USD'000 | 2022 | 2021 | ||||||||||||||
Effect of changes in exchange | ||||||||||||||||
rates and hyperinflation | (37 837) | (29 702) | - | - | Related parties | 6 500 | 6 500 | |||||||||
Cash and cash equivalents at | Other lenders | 10 179 | 10 665 | |||||||||||||
end of period* | 384 151 | 308 755 | 2 897 | 9 100 | 16 679 | 17 165 | ||||||||||
* Consolidated cash and cash equivalents at 31 December are gross amounts excluding expected credit | Related party loans are unsecured and are due to mature during second half of | |||||||||||||||
losses of USD 14 730 and USD 40 979 for 2022 and 2021 respectively. | 2023. These loans bear interest rate of 9% payable annually. |
REVIEW OF THE YEAR
Performance in 2022
FMBCH plc and its subsidiaries ("the Group") posted strong performance for the year ended 31 December 2022, with growth in operating income, income accretive assets and profits across its footprint. Customer numbers grew by 26% to over 555 000, demonstrating the Group's commitment to providing quality services that meet clients' needs.
Notable performance outcomes of 2022 against the preceding year included:
- Net interest income for the year grew by 13% and total non-interest income by 8%, resulting in total operating income of USD 191.6 million - a growth of 10% year on year.
- Profit after tax of USD 61.2 million was achieved - up 51% from 2021.
- Loans and advances to customers are up 18% at year-end, closing at USD 651.7 million.
- Credit loss ratio on customer advances (net impairment expense as a proportion of average advances) was 0.77% (2021: 1.43%).
- Further, the Group's non-performing loans remain one of the lowest in the regional banking industry, at only 2.8% (2021: 2.9%) of the USD 664.6 million gross advances portfolio (2021: USD 565.3 million).
- Customer deposits were up 17% rising to more than USD 1.04 billion.
Profit after tax by country
AUDITED | ||||
Year on year | ||||
USD Million | 2022 | 2021 | growth | |
Botswana | 13.66 | 9.49 | 44% | |
Malawi | 19.34 | 18.33 | 6% | |
Mauritius | (4.24) | (3.47) | (22%) | |
Mozambique | 11.05 | 1.46 | 657% | |
Zambia | 10.01 | 4.81 | 108% | |
Zimbabwe | 11.37 | 9.82 | 16% | |
Total | 61.19 | 40.44 | 51% |
The Group's basic earnings per share were 1.631 US cents (2021: 1.107 US cents), delivering a return on equity of
32% (2021: 25%).
The FMBCH Group remains intent on growing into a significant regional banking brand, with a diversified portfolio of corporate, business and consumer services complemented by a strong focus on treasury and trade activities. The Group is selectively rolling out consumer lending and other retail services across its footprint. A rigorous underpinning of enterprise risk governance at country and Group level is a mainstay of its oversight process, such that capital, liquidity, and other resource allocations are made based on risk assessment, opportunity sizing, and sound data.
The global economic environment
As the world moved into the post-pandemic new order, the Russian-Ukraine conflict brought with it supply constraints on wheat, fertiliser, fuel and gas. This exacerbated inflation, thereby driving up monetary policy interest rates. In addition, the US dollar strengthened against most currencies, including those of the FMBCH Group.
Throughout these influences, the FMBCH Group continues to be well governed with a strong focus on maintaining a healthy financial position that enables long-term, sustainable performance and growth.
Macroeconomic outlook
Global economic growth is expected to slow sharply in 2023, reflecting the prolonged effects of the war in Ukraine, and other geopolitical pressures, together with high inflation and rising interest rates.
Prices are also expected to remain high, even after inflation subsides, fueling the risk of social unrest.
TheGroupremainscautiouslyoptimisticthat,despitethesechallenges,growthforecastsintheSouthernAfricanDevelopment Community (SADC) remain relatively positive, and it is expected that private sector, foreign direct investment (FDI) and local investment may pick up despite foreign exchange limitations and national debt pressures in certain Group markets. The Board and management believe that there is potential to increase the Group's market share across all components through excellent customer service, innovative solutions and leveraging regional trade flows in the region, all while ensuring strong governance and simplicity of delivery. The Group continues to carefully monitor developments and market signals, particularly relating to inflation, trade, monetary policy and overall economic stability.
Dividend
The Directors have approved a second interim dividend in respect of the year ended 31 December 2022 of USD 8 312 625 (0.34 US cents per ordinary share) payable on or about 12 June 2023. The financial statements for year ended 31 December 2022 do not reflect this dividend.
Such dividend will be accounted for in equity as an appropriation of accumulated profits in the year ended 31 December 2023. In addition to the first interim dividend of 0.15 US cents per ordinary share (paid in the third quarter of 2022), the second interim dividend would bring the 2022 annual dividend to 0.49 US cents per share (2021: 0.18 US cents per share). This translates to an almost threefold growth in annual dividends.
The Group's intent is to maintain a regular dividend policy going forward, subject to the Group's growth aspirations. By order of the board
Terence Davidson - Chairman | Mr. Busisa Moyo - Director |
17 May 2023 |
Where to find us
Registered Office: | Branch Office: |
C/o: JTC Fiduciary Services (Mauritius) Limited, | Livingstone Towers, Glyn Jones Road |
Unit 5ABC, 5th Floor, Standard Chartered Tower | Private Bag 122, Blantyre, Malawi |
19 Cybercity, Ebène, Mauritius | Tel: +265 1 821955 / 821943 |
Belief comes first. | www.fmbcapitalgroup.com |
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Disclaimer
FMBcapital Holdings plc published this content on 24 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 May 2023 11:56:07 UTC.