FBC Unaudited results for HY ended 30 Jun 13.pdf

7/30/2019 FBC Unaudited results for HY ended 30 Jun 13.pdf

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strength diversityservice

FBC Holdings Limited

Turnall Holdings Limited

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Unaudited Interim Results For the six months ended 30 June 2013

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Chairmans Statement

Financial Highlights

Groupprotbeforetaxup10%toUS$10million,fromUS$9.2millionforthesameperiodlastyear. Groupprotaftertaxincreasedby20%toUS$8.3millionfromUS$6.9mi llionforthecorrespondingperiod

lastyear. Basicearningspershareincreasedto1.31USCentsfrom1.06USCents. Costtoincomeratioimprovedto73%from75%. Totalshareholdersequityincreasedby31%toUS$88millionfromUS$67millionasat31December2012. Totalassetsincreasedby15%toUS$451millionfromUS$392millionasat31December2012. Netassetvaluepershare13.10USCents(201212.5USCents).

Financial Performance Review

Despitetheharsheconomicenvironment,theGroupsustainedapositiveperformance,achievingaprotbeforetaxofUS$10millionforthesixmonthsended30June2013.Thiswasdrivenbyincreasedrevenuesfromthenancialservicesbusinessesaswellascostcontainment.Thecommendableperformanceis10%betterthantheUS$9.2millionachievedforthesameperiodlastyearandis59%ofthe2012fullyearnancialperformanceofUS$16.9million.TheGroupsearningscapacitycontinuestobebuttressedbyitsdiversiedbusinessmodel,withallthesubsidiariesexceptthemanufacturingbusiness,achievingresultssignicantlyhigherthanthoseachievedforthecorrespondingperiodlastyear.

TheGroupstotalincomerecordedanincreaseofUS$0.1milliontoUS$36.8millionfromUS$36.7million.TheincreasewasweigheddownbythemandatoryreductionofbankchargesandinterestmarginsasstipulatedintheMemorandumofUnderstanding(MoU)signedbetweenthebankingindustryandtheReserveBankofZimbabwe.Inaddition,thesubduedperformanceofthemanufacturingbusinessalsoweigheddownrevenues.

TheGroupstotalincomeisexpectedtoincreaseinthesecondhalfoftheyearascontributionsfromincreasedvolumesandtherecentlyintroducedconcretetileproductbecomemorepronounced.

Netinterestincomeregisteredamodestgrowthof5%toUS$9.9millioncontributing27%oftheGroupstotalincomeinlinewiththesameperiodlastyear.Theunavailabilityofadequatecreditlinesforthecountrycontinuestopushthecostoffunding,as nancialinstitutionscompetetoattractthelimiteddeposits.Thishas hadanegativeimpactonmarginsagainstabackdropofamandatoryinterestratecapping.

Despitethecappingofbankchargestocustomers,feeandcommissionincomeincreasedby2%toUS$11.5millionasaresultofincreasedvolumeoftransactions.

Thecontributionofgrossprotonsalestototalincomedecreasedto17%from20%inpercentagetermsandtoUS$6.3millionfromUS$7.4millioninvalueastheGroupsmanufacturingbusinessoffereddiscountstocustomerstoimprovestockturnoverinordertomanageworkingcapital.ThemanufacturingbusinessgrossprotmarginsaresettoimprovefollowingthecommissioningofthenewtilemanufacturingplantinJuly2013.

TheGroupsgrossinsurancepremiumincreasedby12%toUS$12.1million,inlinewithincreasedbusiness.Thenetearnedinsurancepremium,howeverdecreasedby6%toUS$7.2million,astheinsurancebusinessesreviewedtheirrisktransfermodelbyretaininglesspremiuminordertoimprovethequalityofcovertocustomers.Thecontribution ofnet earnedinsurancepremiumto Group total income,at 20%, wascomparableto thecorrespondingperiodlastyear.

ThetotalimpairmentchargeatUS$10.2millionisconsideredadequateinviewofthesecuritybeingheldbythebankingsubsidiaries.

TheGroupscosttoincomeratioimprovedto73%from75%comparedtothecorrespondingperiodlastyearasaresultofimprovedcostcontainment.Theoperatingexpensesregisteredanincreaseof2.8%toUS$21.7millioncomparedtothesameperiodlastyear.

TheGroupsstatementofnancialpositionatUS$451millionincreasedby15%comparedto31December2012.Theincreaseinthestatementofnancialpositionwasmainlybuoyedbythe16%increaseindepositstoUS$295millioncomparedto31December2012,astheFBCbrandcontinuedtogaintractioninthemarket.

Totalequityattributabletoshareholdersoftheparentcompanyincreasedby31%comparedtothepositionasat31December2012mainlyasaresultofthedisposaloftreasurysharesataprotofUS$2.6millionandtheacquisitionof40%ofFBCBuildingSocietyfromNSSAataprotofUS$2.6million.

Operating Environment

Theeconomy,thoughimproving,continuestobedoggedbyliquiditychallenges,infrastructuralinadequacies,highexternaldebt,limitedrevenuegrowth,as wellasa wideningtradeandcurrentaccountdecit,duetodepressedexportsandover-dependenceonimports.Industrialcapacityutilizationdecreasedfrom57%in2011to40%in2012,andcontinuestodecreaseasevidencedbycontinuousclosureanddownsizingofrms.Thisisduetoconstraintswhichincludelimitedaccesstomediumtolongtermfundingandprohibitiveborrowingcosts.GrossDomesticProductgrowthforecastswerereviseddownwardsto3.4%,frominitialprojectionsof5%fortheyear2013indicatingyetanotheryearofmoderategrowth.

Financial Services Sector

Theslowgrowthinthedepositbaseagainstamorethanproportionateincreaseinfundingrequirementscontinuestoincapacitatethesectorfromadequatelymeetingtheeconomysfundingneeds.Totaldepositsincreasedby5.3%fromUS$4.2billioninJanuary2013toUS$4.4billioninMay2013,whiletotalbankingsectorloansandadvancesincreasedby5.56%fromUS$3.4billiontoUS$3.59billion.RevenuesinthesectorweresubduedasaresultoftheMemorandumofUnderstandingsignedinFebruarythisyearwhichaffectedtheperformanceofnon-fundedincome.Capitalizationwasamajorhighlightovertheperiodinthesectorwith12institutions,includingFBC,havingbeenreportedtohavefullycompliedwiththeDecember2012capitalthreshholdasat31March2013.

New Capital RequirementsTheReserveBankofZimbabweincreasedtheminimumcapitalrequirementsforbankinginstitutionsinJuly2012.CommercialbanksandbuildingsocietiesarerequiredtoraisetheirminimumcapitalfromUS$12.5millionandUS$10milliontoUS$100millionandUS$80millionrespectively,by30June2014.Bankinginstitutionsmustcomplywith50%oftheprescribedminimumcapitalby30June2013;75%by31December2013and100%by30June2014.

Inorderforthebankingsubsidiariestocomplywiththenewcapitalrequirements,FBCHoldingsLimited(FBCH)hasreceivedapprovalforitsproposaltomergetheBankandtheBuildingSocietyintoasingleentity,FBCBankLimited.Themergerwouldresultin thetwoinstitutionsbringingtheircapitaltogetherandthis,coupledwith

otherinitiatives,wouldenabletheemergenceofacommercialbankthatis incompliancewiththeminimumcapitalrequirements.

Inpursuanceofthemergertransaction,acorporaterestructuringwascarriedoutbyFBCHoldingsLimitedwhichresultedintheNationalSocialSecurityAuthoritys(NSSA)40%shareholdinginFBCBuildingSocietybeingtransferredtoFBCHthroughashareswap,resultinginanincreaseofNSSAsshareholdinginFBCHto35%.TheexecutionofthisrestructuringtransactionresultedinboththeBankandtheSocietybeingowned100%byFBCH.

Whilstallthehurdleshavebeencleared,theBankandtheSocietyarestilloperatingasseparatelegalentitiesasweawaitaformalannouncementfromtheCentralBankwithregardtothecapitalizationtimeline.Intheeventthatthecapitalizationdeadlineremainsthesame,theBankandtheBuildingSocietywillbemergedintooneentitytocomplywiththecapitalrequirements.Ifthebankingsubsidiariescurrentcapitallevelsareincompliancewiththenewdispensation,theunitswillcontinuetooperateseparately.ThetotalcapitaloftheBankandtheSocietyasat30June2013wasUS$60million,whichisinexcessoftheUS$50millionthresholdasatthatdate.

Asat30June2013,alltheotherFBCHoldingsLimitedsubsidiarieswereinfullcompliancewithregulatorycapitalrequirements.

Share Price Performance

ThedemandbyforeigninvestorsontheZimbabweStockExchange(ZSE),buoyedthemainindustrialindextoa39%growthat211.19pointsasattheendofJune2013andtheresourcecountersputupamoderateperformanceat73.29points,up12.5%onayeartodatebasis.TheFBCHoldingsLimitedssharepricealsoattractedforeigndemand,withthreeforeignshareholderspurchasingatotalofover10%ofitslistedshares.TheFBCHsharepricegained25.2%,closingthehalfyearatUS$0.10.TheFBCHsharepricecontinuedtotradebelowthenetassetvaluepersharewhichathalfyearwasatUS$0.13.WebelievetheFBCHstocksignicantlyremainsundervaluedespeciallygiventhestrongearningcapacityoftheGroup.

Corporate Social Investment

TheGrouphasdisbursedoverUS$140000towardsvariouscorporatesocialresponsibilityinitiativesintheeldsofeducation,health,sportsandtheartsduringthersthalfoftheyearandremainscommittedtogivingbacktothecommunitiesitoperatesin.

Dividend

OnbehalfoftheBoard,Iampleasedtoadviseshareholdersthataninterimdividendof0.149USCentspershareisproposedaftertakingintoaccountthegoodperformanceoftheGroupandthesolidrecapitalizationplan.Thedividendbeingproposedtranslatestoseventimesdividendcover.

Marketing and Public Relations

TheGrouphasremainedhighlyvisiblewithinthemarketplaceduringthersthalfoftheyearowingtovarioussustainedmarketingandpublicrelationsinitiativesthathavebeenimplemented.FBCHoldingsLimitedwaspubliclyrecognizedonceagainwhenitscoopedtheIndependentQuotedCompaniesSurvey2012BankingSectorAwardforthesecondyearrunning,havingreceivedthesameaccoladein2011.TheGrouphasalsopreviouslywontheIndependentQuotedCompaniesOverallAwardforthebestperformingcompany.

e-Commerce

TheGroupwillcontinuetochampionthenancialinclusionagendathroughproductsandservicesthatcaterformoresegmentsofthemarket.Wehaveinitiatedtherollingoutofsolutionstargetingsectorsthatwerepreviouslynotservedandimplementinginnovativeserviceswhichcontinuetomakebankingmoreconvenientandefcient.Leveragingontechnologytostreamlineinternalprocessesanddevelopingmoreproducts,willallowustobepro-activeinanincreasinglycompetitivemarket.Electronicplatformshavealsoenabledustocapturethediasporamarketsthroughinnovativeproductsandserviceswhichprovidearoundtheclockaccesstoourservicesfromanywhereacrosstheglobe.

Theincreasednumberof transactionsgeneratedthrough e-channels hasallowed theBankto counterthesignicantlyadverseimpactoftheMemorandumofUnderstandingonrisk-freeincomeinthersthalfoftheyear.TheGroupwillcontinuetoexpandintonewmarketsinthesecondhalfthroughintegrationofthesecondarydistributionnetwork,whichshouldgiveevengreaterservicereach.

OutlookFollowingthejust-endedpeacefulelections,itisourhopethatthiswillnowpavethewayformacro-economicstabilityandincreasedforeigndirectinvestment,leadingtoimprovedliquidity.TheGroupremainswellpoisedtoexploitthenewenvironmenttogrowshareholdervalue.

Appreciation

Asalways,IamhumbledbytheunwaveringsupportandcondenceshownintheFBCbrandbyourvaluedcustomers.Iam trulyappreciativeof thenon-executivedirectorsguidance andcounselduringthisperiod.Theprofessionalism,dedicationandcommitmentdemonstratedatalltimes,bytheGroupChiefExecutive,hismanagementteamandstaff,ishighlycommendable.

Herbert Nkala

Group Chairman

21 August 2013

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Consolidated Statement of Comprehensive IncomeFor the six months ended 30 June 2013

Unaudited Unaudited30 June 2013 30 June 2012

Note US$ US$ Interestincome 15 20319390 18594134Interestexpense 16 (10464365) (9194778)Net interest income 9 855 025 9 399 356Feeandcommissionincome 17 11474111 11288650Feeandcommissionexpense (5867) -Net fee and commission income 11 468 244 11 288 650Revenue 18.1 24833494 22802615Costofsales 18.2 (18503085) (15358030)Gross prot 6 330 409 7 444 585

Insurancepremiumrevenue 19.1 12088498 10769722Premiumcededtoreinsurersandretrocessionaires (4872989) (3122397)Net earned insurance premium 7 215 509 7 647 325Nettradingincome 409646 762279Netgainsfromnancialinstrumentscarriedatfairvalue 236263 (183795)Otheroperatingincome 20 1286678 386391

1932587 964875

Total income 36 801 774 36 744 791Impairmentallowanceonnancialassets 5.3 (623964) (1368383)Netinsurancecommissionexpense 19.2 (1841936) (1867270) Insuranceclaimsandlossadjustmentexpenses 19.3 (2620530) (3244937)

Administrativeexpenses 21 (21687159) (21105466) Prot before income tax 10 028 185 9 158 735 Incometaxexpense 22 (1729194) (2218950) Prot for the period 8 298 991 6 939 785 Other comprehensive income - -

Gainsonrevaluationoflandandbuildings - -Taxrelatingtoothercomprehensiveincome - -

Other comprehensive income, net income tax - -

Total comprehensive income for the period 8 298 991 6 939 785

Prot attributable to:Equityholdersoftheparent 7025059 5636385Non-controllinginterests 1273932 1303400

Prot for the period 8 298 991 6 939 785 Total comprehensive income attributable to: Equityholdersoftheparent 7025059 5636385Noncontrollinginterests 1273932 1303400 Total comprehensive income for the period 8 298 991 6 939 785Earnings per share (US cents)Basicearningspershare 26.1 1.31 1.06Dilutedearningspershare 26.2 1.31 1.06

Consolidated Statement of Changes in EquityFor the six months ended 30 June 2013

Share Non Non

Share Share Retained option Treasury distributable Revaluation Regulatory Changes in controlling Totalcapital premium profits reserve shares reserve reserve reserve ownership Total interest equity

US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$ US$

Half year ended 30 June 2013Balance as at 1 January 2013 5918 7675990 24738249 110716 (2757535) 33659224 3191743 627590 (214766) 67037129 21115504 88152633Protfortheperiod - - 7025059 - - - - - 7025059 1273932 8298991Other comprehensive income Gainonrevaluationofproperty,plant - - - - - - - - - - - -andequipment,netoftax - - - - - - - - - - - -Regulatoryimpairmentallowance - - - - - - - - - - - -Total other comprehensive income - - - - - - - - - - - -Total comprehensive income - - 7025059 - - - - - - 7025059 1273932 8298991

Transaction with owners Netsaleoftreasuryshares - 2638811 - - 2442625 - - - - 5081436 - 5081436Dividend - - - - - - - - - - - -Increaseinownershipinterest 801 6407183 - - - - - - 2585502 8993486 (8993486) -Treasurysharepurchase - - - - - - - - - -Sharebuyback - - - - (81864) - - - - (81864) - (81864)

Balance as at 30 June 2013 6 719 16 721 984 31 763 308 110 716 (396 774) 33 659 224 3 191 743 627 590 2 370 736 88 055 246 13 395 950 101 451 196

Half year ended 30 June 2012Balance as at 1 January 2012 5918 7675990 13106111 110716 (2686644) 33659224 3191743 690650 (214766) 55538942 18679890 74218832Protfortheperiod - - 5636385 - - - - - - 5636385 1303400 6939785Other comprehensive income Gainonrevaluationofproperty,plant - - - - - - - - - - - -andequipment,netoftax - - - - - - - - - - - -Regulatoryimpairmentallowance - - 33060 - - - - (33060) - - - -

Total other comprehensive income - - 33 060 - - - - (33 060) - - - -Total comprehensive income - - 5 669 445 - - - - (33 060) - 5 636 385 1 303 400 6 939 785

Transaction with owners Dividend - - (1352280) - - - - - - (1352280) (213870) (1566150)

Balance as at 30 June 2012 5 918 7 675 990 17 423 276 110 716 (2 686 644) 33 659 224 3 191 743 657 590 (214 766) 59 823 047 19 769 420 79 592 467

Consolidated Statement of Financial Position

As at 30 June 2013 Unaudited Audited

Note 30 June 2013 31 December 2012ASSETS US$ US$ Balanceswithbanksandcash 4 119136714 82415090Loansandadvancestocustomers 5.1 210606591 190592547Tradeandotherreceivablesincludinginsurancereceivables 5.2 28229337 26582806Financialassetsatfairvaluethroughprotorloss 6 2546372 2932818Inventory 7 20731029 22152528Prepaymentsandotherassets 8 8298764 6921582Deferredincometaxassets 1441001 1664338Investmentproperty 25000 25000Intangibleassets 1153580 1457875Property,plantandequipment 9 58427920 57310267Total assets 450 596 308 392 054 851

EQUITY AND LIABILITIES

Liabilities Depositsandborrowingsfromotherbanksandcustomers 10 295388184 254058266Insuranceliabilities 11 11580535 10976731Tradeandotherpayables 12 33503889 29885061Currentincometaxliabilities 1560118 1712581Deferredincometaxliabilities 7112386 7269579Total liabilities 349 145 112 303 902 218

EquityCapital and reserves attributable to equity

holders of the parent entitySharecapitalandsharepremium 13 16728703 7681908Otherreserves 14 39563235 34616972Retainedprots 31763308 24738249 88055246 67037129

Noncontrollinginterestinequity 13395950 21115504Total equity 101 451 196 88 152 633Total equity and liabilities 450 596 308 392 054 851



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Consolidated Statement of Cash FlowsFor the six months ended 30 June 2013


Note US$ US$ Cash ow from operating activitiesProtfortheperiod 10028185 9158735Adjustments for:Depreciation 9 1995150 1895356Ammortisation 335905 268424Impairmentlossonloansandadvances 5.3 623964 1368383Lossfromdisposalofpropertyandequipment 20 (2922) 803Fair valueadjustm ent onnancial asset sat fair valuet hrough pr ot or loss ( 236263) 183 795

Net Cash generated before changes in operating assets and liabilities 12 744 019 12 875 496Increaseinloansandadvances (20014044) (51317023)Increaseintradeandotherreceivables (1646531) (3034518)Increaseinnancialassetsatfairvaluethroughprotorloss 386446 (396996)Increaseininventory 1421499 (4386871)Increaseinprepaymentsandotherassets (1377182) (1230657)Increaseindepositsfromotherbanksandcustomers 32881308 61820229Increase/(decrease)ininsuranceliabilities 603804 3511868Increase/(decrease)intradeandotherpayables 3618828 (1201289) 28618147 16640239

Incometaxexpensepaid (1815907) (3950515)

Net cash generated from operating activities 26 802 240 12 689 724

Cash ows from investing activities Purchaseofproperty,plantandequipment 9 (3173668) (1843910)Proceedsfromsaleofproperty,plantandequipment 139775 11233Net cash used in investing activities (3 033 893) (1 832 677)

Netcashowsbeforenancingactivities 23768347 10857047Cash ows from nancing activitiesRepaymentsofborrowings - (727251)Proceedsfromborrowings 8448610 -Dividendpaidtonon-controllinginterest - (213870)Dividendpaidtocompanysshareholders - (1352280)Purchaseoftreasuryshares (81864) -Proceedsfromresaleoftreasuryshares 5081436 -Net cash generated from nancing activities 13 448 182 (2 293 401) Netincreaseincashandcashequivalents 37216529 8563646 Cashandcashequivalentsatbeginningoftheperiod 81920185 41091857Cash and cash equivalents at the end of period 4.1 119 136 714 49 655 503

Notes to the Financial ResultsFor the six months ended 30 June 2013

1 GENERAL INFORMATION FBCHoldingsLimited(theCompany)anditssubsidiaries(togethertheGroup)provideawiderangeofcommercialbanking,mortgagenance,stockbrocking,reinsurance,insuranceandotherrelatednancialservices.TheGroupalsomanufactures pipes and roongsheets.

TheCompanyisalimitedliabilitycompany,whichislistedontheZimbabweStockExchangeandisincorporatedanddomiciledinZimbabwetogetherwithitssubsidiaries.ThesecondensedinterimconsolidatednancialstatementswereapprovedforissuebytheBoardofDirectorson21August2013.

2 BASIS OF PREPARATION TheGroupscondensedinterimconsolidatednancialstatementsforthehalfyearended30June2013havebeenpreparedinaccordancewiththeInternationalAccountingStandard(IAS)34,theZimbabweCompaniesAct(Chapter 24:03) and the Zimbabwe Banking Act(Chapter24:20)andshouldbereadinconjunctionwiththeconsolidatednancialstatementsfortheyearended31December2012.

3 ACCOUNTING POLICIES Theaccountingpoliciesappliedinthepreparationoftheseinterimconsolidatednancialstatementsareconsisentwiththoseoftheannualconsolidatednancialstatementsfortheyearended31December2012.

Thecondensedinterimconsolidatednancialstatementshavebeenpreparedunderthehistoricalcostconventionandare presented in

theUnitedStatesdollars(US$)andareroundedtothenearestdollar.

Unaudited Audited

30 June 2013 31 December 2012US$ US$

4 BALANCES WITH BANKS AND CASH BalanceswithReserveBankofZimbabwe Statutoryreserves - - Currentaccountbalances 72443973 50701657 72443973 50701657 Balanceswithotherbanksandcash Notesandcoins 14065269 23907633 Otherbankbalances 32627472 7805800 Balances with banks and cash 119 136 714 82 415 090

Current 119136714 82415090 Non-current - -

Total 119 136 714 82 415 090

Unaudited Audited Unaudited

30 June 2013 31 December 2012 30 June 2012

US$ US$ US$

4.1 For the purpose of the cash ow statement, cash andcash equivalents comprise the following balances :

Balanceswithotherbanks,cashandcurrentaccountbalancesat RBZ(includingbankoverdrafts) 119136714 81920185 49655503

Total cash and cash equivalents - statement of cash ows 119 136 714 81 920 185 49 655 503

Unaudited Audited

30 June 2013 31 December 2012US$ US$

5 LOANS AND RECEIVABLES

5.1 Loans and advances to customers

Loans and advances maturities

Maturingwithin1year 137619966 144452501 Maturingafter1year 83123481 55928410 Grosscarryingamount 220743447 200380911 Impairmentallowance (10136856) (9788364) 210 606 591 190 592 547

Current 131559911 135315806 Non-current 79046680 55276741 Total 210 606 591 190 592 547

5.2 Trade and other receivables Retailtradereceivables 18409409 16813011 Insurancereceivables -Duebyinsurancecompanies 4054635 4807101 -Duebyreinsurers 5793058 4990459 Grosscarryingamount 28257102 26610571 Impairmentallowance (27765) (27765) 28 229 337 26 582 806 Current 28229337 26582806 Non-current - - Total 28 229 337 26 582 806

Unaudited Audited Unaudited


US$ US$ US$5.3 Allowance for impairment

Balanceasat1January 9816129 4354922 4354922 Impairmentallowancethroughstatementof comprehensiveincome 623964 3603842 1368383

Reversalofimpairment - (41419) - Amountswrittenoffduringtheyearasuncollectible (354013) (751739) - Interestinsuspense 78541 2650523 -

Balance as at the end of period 10 164 621 9 816 129 5 723 305

Unaudited Audited30 June 2013 31 December 2012

US$ US$

5.4 Exposure to credit risk

5.4.1 Loans and advances

Past due and impaired Grade8:Impaired 4317410 12741919

Grade9:Impaired 5411468 3059909 Grade10:Impaired 7689059 2470241

Gross amount 17417937 18272069 Allowanceforimpairment (6637830) (7633643) Carryingamount 10780107 10638426 Past due but not impaired

Grades4-7: 34845596 13003340 Niether past due nor impaired

Grades1-3: 168479914 169105502 Gross amount 203325510 182108842 Allowanceforimpairment (3499026) (2154721) Carryingamount 199826484 179954121 Total carrying amount 210 606 591 190 592 5475.4.2 Trade and other receivables

Pastdueandimpaired 9862240 6430768 Allowanceforimpairment (27765) (27765) Carryingamount 9834475 6403003 Pastduebutnotimpaired 3308311 2870522 Nietherpastduenorimpaired 15086551 17309281 Gross amount 18394862 20179803 Allowanceforimpairment - - Carryingamount 18394862 20179803

Total carrying amount 28 229 337 26 582 806



Introducing a new family member!

[email protected]


FBC Bank Limited(Registered Commercial Bank)

www.fbc.co.zw

The new FBC MasterCard Business Prepaid card is a l oad and go card that has a higher spending limit.

Get your card instantly without opening a bank account at any FBC branch countrywide.

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Accepted at more t han 33.3 million ATM and merchant locations in 210 countries worldwide.

Directors:HerbertNkala(Chairman),JohnMushayavanhu(GroupChiefExecutive)*,KenziasChibota,GertrudeSChikwava,PhilipMChiradza,KletoChiketsani*,ChipoMtasa,TrynosKufazvinei(GroupFinanceDirector)*,CanadaMalunga,JamesMMatiza,JohnsonRMawere,GodfreyGNhemachena,WebsterRusere*,FelixGwandekwande*.(*Executive)

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Notes To The Financial Results (continued)For the six months ended 30 June 2013

Unaudited Unaudited Audited Audited30 June 2013 30 June 2013 31 December 2012 31 December 2012

US$ % US$ %

5.5 Sectoral analysis of utilisations - loans and advances

Mining 17814519 8% 12395909 6% Manufacturing 41517777 19% 35382390 18% Mortgage 22174345 10% 16968935 8% Wholesale 12923082 6% 12210166 6% Distribution 23613222 11% 19621528 10% Individuals 41926733 19% 46758523 23% Agriculture 9058217 4% 9886442 5% Communication 2620252 1% 1938286 1% Construction 2042453 1% 1971742 1% LocalAuthorities 3286969 1% 2133306 1% Otherservices 43765878 20% 41113684 21% Grossloansandadvances 220743447 100% 200380911 100% Lessimpairmentallowance (10136856) (9788364)

Carrying amount 210 606 591 190 592 547

Unaudited Audited

30 June 2013 31 December 2012US$ US$ 6 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Listedsecuritiesatmarketvalue 2546372 2932818

Current 2546372 2932818 Non-current - - Total 2 546 372 2 932 818

7 INVENTORY

Consumables 1304469 1508735 Rawmaterials 2177761 4334764 Workinprogress 3195700 3854289 Finishedgoods 14053099 12454740 20 731 029 22 152 528 8 PREPAYMENTS AND OTHER ASSETS

Prepayments 3817043 2385095 Other 4481721 4536487 8 298 764 6 921 582 Current 8298764 6921582 N on-current - -

Total 8 298 764 6 921 582 9 PROPERTY, PLANT AND EQUIPMENT

Furniture and

Freehold Plant and Computer Office Motor

Half year ended 30 premises machinery equipment equipment vehicles TotalJune 2013 US$ US$ US$ US$ US$ US$

Openingnetbook amount 28083296 23394626 1213594 3362664 1256087 57310267

Additions 305224 1642494 574704 463670 187576 3173668 Capitalworkin

progress - - - - - - Disposals (8000) - - - (52865) (60865) Depreciation (307336) (990148) (273808) (234152) (189706) (1995150) Closing net book

amount 28 073 184 24 046 972 1 514 490 3 592 182 1 201 092 58 427 920

10 DEPOSITS FROM OTHER BANKS AND CUSTOMERS

10.1 DEPOSITS FROM CUSTOMERS

Demanddeposits 87498617 91944231 Promissorynotes 49122457 30007720 Othertimedeposits 19346718 6149930 155967792 12810188110.2 DEPOSITS FROM OTHER BANKS

Moneymarketdeposits 89405190 84389793 Bankborrowingsandlinesofcredit 50015202 41566592 139420392 125956385 TOTAL DEPOSITS 295 388 184 254 058 266 Current 295388184 254058266 N on-current - - Total 295 388 184 254 058 266

10.3 DEPOSITS CONCENTRATION

30 June 2013 30 June 2013 31 December 2012 31 December 2012

US$ % US$ %

Agriculture 6576232 2% 4982313 2% Construction 2445279 1% 2225233 1% Wholesaleandretailtrade 52126588 18% 31663276 12% Publicsector 16213616 5% 16766961 7% Manufacturing 16893249 6% 10930868 4%

Telecommunication 5964828 2% 2351318 1% Transport 2593708 1% 4558834 2% Individuals 31834521 11% 38390033 15% Financialservices 139420392 47% 125956385 50% Mining 15647643 5% 12699878 5% Other 5672128 2% 3533167 1% 295 388 184 100% 254 058 266 100%



11 INSURANCE LIABILITIES


US$ US$

Grossoutstandingclaims 6397540 7336142 Provisionsforunearnedpremium 5182995 3640589 11 580 535 10 976 731 Current 11580535 10976731 N on-current - - Total 11 580 535 10 976 731 12 TRADE AND OTHER PAYABLES

Tradeandotherpayables 13747619 21249775

Deferredincome 516316 1122067 Otherliabilities 19239954 7513219 33 503 889 29 885 061

Current 33503889 29885061 N on-current - - Total 33 503 889 29 885 061 13 SHARE CAPITAL AND SHARE PREMIUM

Authorised Numberofordinaryshares 800000000 800000000 ParvalueofsharesUS$ 0.00001 0.00001

Issued and fully paid Numberofordinaryshares 671949927 591850127

Number of Share capital Share premium Total

shares US$ US$ US$ Asat1January2012 591850127 5918 7675990 7681908 Netgainondisposaloftreasuryshares - - 2638811 2638811 Shareissue 80099800 801 6407183 6407984

Asat30June2013 671 949 927 6 719 16 721 984 16 728 703

Unaudited Audited

30 June 2013 31 December 2012

US$ US$

14 OTHER RESERVES

Shareoptionreserves 110716 110716 Revaluationreserve 3191743 3191743 Nondistributablereserve 33659224 33659224 Regulatoryprovisions 627590 627590 Treasuryreserves (396774) (2757535) Changesinownership 2370736 (214766)

39 563 235 34 616 972 Unaudited Unaudited

30June2013 30June2012 US$ US$

15 INTEREST INCOME

Cashandcashequivalents 212251 653822 Loansandadvancestootherbanks 496967 349180 Loansandadvancestocustomers 16945422 13953143 Investmentsecurities 2664750 3322319 Otherinterestincome - 315670 20 319 390 18 594 134

16 INTEREST EXPENSE

Depositfromotherbanks 8676578 3231516 Demanddeposits 175585 3098476 AfreximbankandPTABank 1148959 2159222 Timedeposits 463243 705564 10 464 365 9 194 778 17 FEE AND COMMISSION INCOME

Retailservicefees 7777515 7907250

Creditrelatedfees 3289117 3147257

Investmentbankingfees 58462 55735 Brokerage 201062 92228 Other 147955 86180 11 474 111 11 288 65018.1 REVENUE

Localmanufacturingsales 18121858 17239382 Exportmanufacturingsales 846334 1285233 PropertySales 5865302 4278000 24 833 494 22 802 615 18.2 COST OF SALES

Depreciationofproperty,plantandequipment 960576 941331 Rawmaterials 8053603 10186470 StaffCosts 2771996 2843509 Propertydevelopment 3707166 2781099 Other 3009744 (1394379) 18 503 085 15 358 030

19.1 INSURANCE PREMIUM REVENUE

GrossPremiumWritten 13630904 12676142 ChangeinUnearnedPremiumReserve (1542406) (1906420) 12 088 498 10 769 722

19.2 NET INSURANCE COMMISSION EXPENSE CommissionsPaid 2124186 2348248 Changeintechnicalprovisions (282250) (480978) 1 841 936 1 867 270

19.3 INSURANCE CLAIMS AND LOSS ADJUSTMENT EXPENSES ClaimsPaid 2933996 2536917

ChangeinTechnicalProvisions (313466) 708020 2 620 530 3 244 937


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Unaudited Audited30 June 2013 31 June 2012

US$ US$20 OTHER OPERATING INCOME

Fairvalueadjustmenttoinvestmentproperties - -

Excessfairvalueovercostofacquisition 86834 1140 Rentalincome 171142 149898 Protdisposalofproperty,plantandequipment 2922 (803) Sundryincome 1025780 236156 1 286 678 386 391

21 ADMINISTRATIVE EXPENSES

Administrationexpenses 8644641 8282737 Staffcosts 10968552 10754530 Directorsremuneration 256742 290149 Auditfees: -currentyearfees 155971 284532 -prioryearfees 26257 17754 -otherservices - -

Depreciation 1259523 1096817 Operatingleasepayment 375473 378947 21 687 159 21 105 466

22 INCOME TAX EXPENSE

Currentincometax 1627224 1833090

Deferredtax 101970 30146 Other - 355714 1 729 194 2 218 950


US$ US$

23 CAPITAL COMMITTEMENTS Capitalexpenditureauthorizedbutnotyetcontractedfor 8402652 5116449

24 CONTINGENT LIABILITIES

Guaranteesandlettersofcredit 11628343 2190659 25 TRANSACTIONS WITH NON-CONTROLLING INTERESTS

Acquisition of additional interest in a subsidiary

On28June2013,theCompanyacquiredtheremaining40%oftheissuedsharesofFBCBuildingSocietyforapurchaseconsideration

ofUS$6407984.TheGroupnowholds100%oftheequitysharecapitalofFBCBuildingSociety.Thecarryingamountofthenon-controllinginterestsinFBCBuildingSocietyonthedateofacquisitionwasUS$8993486.TheGroupderecognisednon-controllinginterestsofUS$8993486andrecordedanincreaseinequityattributabletoownersoftheparentofUS$2585502.TheeffectofchangesintheownershipinterestofFBCBuildingSocietyontheequityattributabletoownersoftheCompanyduringthehalfyearis

summarisedasfollows: Unaudited Unaudited

30 June 2013 30 June 2012US$ US$

Carryingamountofnon-controllinginterestsaquired 8993486 - Considerationpaidtonon-controllinginterests (6407984) - Gainonpurchaserecognisedinparentsequity 2585502 -




US$ US$

26 EARNINGS PER SHARE

26.1 Basic earnings per share Protattributabletoequityholders 7025059 5636385

Shares Treasury Shares WeightedWeighted average number of ordinary shares issued shares outstandingHalf Year ended 30 June 2013

Issuedordinar y shar es asat 1January 2013 591850127 56 291 799 535 558328 535 558 328 Treasurysharessold - (51577785) 51577785 -

Shareissue 80099800 - 80099800 - Treasurysharespurchased - 1025595 (1025595) (256399) Weighted average number of ordinary

shares as at 30 June 671 949 927 5 739 609 666 210 318 535 301 929

Basicearningspershareforthehalfyearended 30June2013(UScents) 1.31

Weighted average number of ordinary shares

Half Year ended 30 June 2012 I ss ue d or di na ry sh ar es as a t 1 Ja nu ar y 201 2 59 1 85 0 12 7 53 3 79 73 4 53 8 47 0 39 3 53 8 47 0 393

Treasurysharespurchased - 2912065 (2912065) (1456033) Weighted average number of ordinary

shares as at 30 June 591 850 127 56 291 799 535 558 328 537 014 360

Basicearningspershareforthehalfyearended 30June2012(UScents) 1.06

26.2 Diluted earnings per share Dilutedearningspershareiscalculatedafteradjustingtheweightedaveragenumberofordinarysharesoutstandingtoassumec on ve rs io nof a ll d il ut iv epo te nt ia lordi na ry s ha re s. T he Compa ny d oe sno tha ve d il ut iv eordi na ry s ha re s.

Unaudited Unaudited

30 June 2013 30 June 2012US$ US$

Protattributabletoequityholders 7025059 5636385

Weightedaveragenumberofordinarysharesat30June 535301929 537014361 Dilutedearningspershare(UScents) 1.31 1.06 26.3 Headline earnings per share

Prot attributable to equity holders 7 025 059 5 636 385 Adjustedforexcludedremeasurements

(Prot)/Lossonthedisposalofproperty,plantandequipment (2922) 803 Other - - Headline earnings 7 022 137 5 637 188

Weighted average number of ordinary shares at 30 June 535 301 929 537 014 361

Headline earnings per share (US cents) 1.31 1.06

Notes to the Financial Results (continued)For the six months ended 30 June 2013

26.4 Diluted headline earnings per share

Dilutedheadlineearningspershareiscalculatedafteradjustingtheweightedaveragenumberofordinarysharesoutstandingtoassumeconversionofalldilutivepotentialordinaryshares.TheCompanydoesnothavedilutiveordinaryshares.


US$ US$

Headlineearnings 7022137 5637188 Weightedaveragenumberofordinarysharesat30June 535301929 537014361 Dilutedearningspershare(UScents) 1.31 1.06

27 FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

27.1 FINANCIAL INSTRUMENTS NOT MEASURED AT FAIR VALUE ThefairvaluesofallnancialassetsandliabilitespresentedontheGroupsconsolidatedstatementofnacialpositionapproximatethenancialinstrumentscarryingamountsduetotheshort-termtenorofthenancialinstruments.

27.2 CLASSIFICATION OF FINANCIAL INSTRUMENTS AT FAIR VALUE ThetablebelowsetsouttheGroupsclassicationofeachclassofnancialassetsandliabilities,andtheirfairvalues. Financial

liabilities atHeld for Loans and amortisedtrading receivables cost

US$ US$ US$

As at 30 June 2013Trading assets Balanceswithotherbanksandcash - 119136714 -

Loansandadvancestocustomers - 210606591 - Tradeandotherreceivablesincluding

insurancereceivables - 28229337 - Financialassetsatfairvaluethroughprotorloss 2546372 - - 2546372 357972642 -

Trading liabilities

Depositsandborrowingsfromotherbanksand customers - - 295388184

Insuranceliabilities - - 11580535 Tradeandotherpayables - - 33503889 - - 340472608 27.3 FAIR VALUE HIERARCHY

Fair value measurements using;

Quotedprices in

active Signicantmarkets for other Signicant

identical observable unobservableassets inputs inputs

(Level 1) (Level 2) (Level 3)US$ US$ US$

Recurring fair value measurementsAs at 30 June 2013 InvestmentpropertyResidentialhouse,VictoriaFalls - 25000 -

Financialassetsatfairvaluethroughprotorloss 2546372 - - As at 31 December 2012

InvestmentpropertyResidentialhouse,VictoriaFalls - 25000 - Financialassetsatfairvaluethroughprotorloss 2932818 - -

Therewerenotransfersbetweenlevels1and2duringtheperiod

Valuation techniques used to derive fair values

Level1fairvaluesforequitysecuritiesisbasedontheirbidpricesontheZimbabweStockExchangeasat30June2013

Level2fairvaluesofinvestmentpropertyhavebeenarrivedatonthebasisofavaluationcarriedoutbyanindependentprofessionallyqualiedvaluerasat31December2011.

28 RELATED PARTY TRANSACTI ONS TheGroupcarriedoutbankingandinvestmentsrelatedtransactionswithvariouscompaniesrelatedtoitsshareholders,allofwhich

wereundertakenincompliancewiththerelevantbankingregulations.ThefulllistofrelatedpartiesanddetailsoftransactionsareprovidedintheGroupsannualreportfortheyearended31December2012.Therehavenotbeenanymaterialmovementssince.

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Commercial Mortgage Short term Short termbanking Microlending financing reinsurance insurance Stockbroking Manufacturing Consolidated

30 June 2012 US$ US$ US$ US$ US$ US$ US$ US$

Interestincome 16234265 813601 2235665 308936 6734 15174 1328 18594134

Interestexpense (8169978) (127528) (664574) - (51441) - (1202827) (9194778) Netinterestincome 8064287 686073 1571091 308936 (44707) 15174 (1201499) 9399356 Turnover - - 4278000 - - - 18524615 22802615 Costofsales - - (2781099) - - - (12576931) (15358030)

Grossprot - - 1496901 - - - 5947684 7444585 Netearnedinsurancepremium - - - 1283474 1251644 - - 2535118 Netfeeandcommissionincome 9060424 130481 2020627 - - 92228 - 11288650 Nettradingincomeandotherincome 697149 40846 48632 49769 40945 - 45821 964875

Totalincome 17821860 857400 5137251 1642179 1247882 107402 4792006 31632584 Intersegmentrevenue (742858) - (16823) (308936) - - - (1068618) Intersegmentinterestexpenseandcommission 220202 - 137494 13646 51441 1464 644370 1068618

Revenue from external customers 17 299 204 857 400 5 257 922 1 346 889 1 299 323 108 866 5 436 376 31 632 584

Segment prot before income tax 3 838 341 412 544 2 321 848 618 854 302 146 (97 274) 1 276 001 9 158 735 Impairmentlossesonnancialassets 826014 323314 154916 53099 - - - 1368383 Depeciationandamortisation 776165 281 81024 39901 54876 11018 1200516 2163780 Segment assets 240 013 753 7 233 205 41 182 583 17 973 442 5 263 879 1 957 622 66 363 385 346 278 446 Totalassetsincludes:

Additionstonon-currentassets 724894 1020 84902 40882 71007 43449 877754 1843910 Investmentinassociates - - - 491139 - - - 491139 Segment liabilities 209 798 989 6 508 419 24 979 354 11 991 388 3 355 819 1 825 241 37 013 782 266 685 979 Typeofrevenuegeneratingactivity Commercial Microlending Mortgage Underwriting Underwriting Equitymarket Productionand andretail nancing shortterm generalclasses dealing salesofbuilding banking classesof ofshortterm materials insurance insurance

29 SEGMENT REPORTING Segmentinformationispresentedinrespectofbusinesssegments. Segmentrevenue,expenses,resultsandassetsareitemsthataredirectlyattributabletothebusinesssegmentorwhichcanbeallocatedonareasonablebasistoabusinesssegment.Alltransactionsbetweensegmentsareconductedatarmslength. TheGroupcomprisessevenbusinesssegmentsi.e.commercialbanking,microlending,mortgagenancing,shortterm,reinsurance,insurance,stockbrokingandmanufacturing. Performanceismeasuredbasedonsegmentprotbeforeincometax,asincludedintheinternalmanagementreportsthatarereviewedbytheGroupExecutiveCommittee.

Commercial Mortgage Short term Short term

banking Microlending financing reinsurance insurance Stockbroking Manufacturing Consolidated

30 June 2013 US$ US$ US$ US$ US$ US$ US$ US$

Total segment revenue

Interestincome 16705469 1532204 4261452 465863 62140 50181 3610 20319390 Interestexpense (9280626) (642450) (1951134) - - - (1351685) (10464365)

Netinterestincome 7424843 889754 2310318 465863 62140 50181 (1348075) 9855025 Turnover - - 5865302 - - - 18968191 24833494 Costofsales - - (3707166) - - - (14795919) (18503085) Grossprot - - 2158136 - - - 4172272 6330409 Netearnedinsurancepremium - - - 1728225 1503156 - - 2753043 Netfeeandcommissionincome 9767720 143199 1887789 - - 273315 - 11468244 Nettradingincomeandotherincome 619091 161865 54450 413580 42095 - 514794 1932587 Total income 17 811 654 1 194 818 6 410 693 2 607 668 1 607 391 323 496 3 338 991 32 339 308

Intersegmentrevenue (1347467) - (1214610) (131013) (54139) (14300) - (2761528) Intersegmentinterestexpenseandcommission 1227588 642450 467416 - - - 424075 2761528 Revenue from external customers 17 691 775 1 837 268 5 663 499 2 476 655 1 553 252 309 196 3 763 066 32 339 308 Segment prot before income tax 4 150 444 563 977 3 123 605 1 635 871 464 378 102 896 29 320 10 028 185 Impairmentlossesonnancialassets 333958 177551 112455 - - - - 623964 Depeciationandamortisation 862801 2805 116656 40181 61428 13842 1233376 2331055 Segment assets 326 572 076 11 051 084 70 678 528 20 274 203 6 858 755 7 089 262 70 119 677 450 596 308 Totalassetsincludes: Additionstonon-currentassets 819402 33770 42162 32797 468251 - 1777287 3173668 Investmentinassociates - - - 491139 - - - 491139 Segment liabilities 289 057 279 9 418 863 48 194 813 12 087 771 4 331 001 6 769 707 40 696 152 349 145 112 Typeofrevenuegeneratingactivity Commercial Microlending Mortgage Underwriting Underwriting Equitymarket Productionand andretail nancing shortterm generalclasses dealing salesofbuilding

banking classesof ofshortterm materials insurance insurance


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30 RISK MANAGEMENT

Overview TheGroupcontinuestomaintainastrongriskmanagementcultureinresponsetothechangingoperatingenvironmentinordertoachieveanappropriatebalancebetweenriskandreward.ThisapproachhasenabledtheGrouptotradewithinthelimitsasdenedintheriskappetitematrixoftheGroup.TheGroupregularlyscanstheenvironmentandrealignsitspolicies,proceduresandstrategicthrustinpursuitoforganisationalobjectives.Theriskmanagementframeworkcoversthefollowingkeyrisktypes: Risk categories

30.1 Strategic risk Strategicriskisthecurrentandprospectiveimpactonearningsorcapitalarisingfromadversebusinessdecisions,improperimple-mentationofdecisions,orlackofresponsivenesstoindustrychanges.TheBoardofDirectorsretainstheoverallresponsibilityforstrategicriskmanagementthroughtheBoardFinanceandStrategyCommittee.

30.2 Reputational risk ReputationalriskisthepotentialthatnegativepublicityregardingtheGroupsbusinesspractices,whethertrueornot,willcauseadeclineinthecustomerbase,costlylitigation,orrevenuereductions.ThisriskmayresultfromtheGroupsfailuretoeffectivelymanageanyoralloftheotherrisktypes.Managementtranslatesthereputationalriskmanagementstrategy established by theBoardofDirectorsintopolicies,processesandproceduresthatareimplementedthroughouttheGroup.

30.3 Credit risk CreditriskisthecurrentorprospectiverisktoearningsandcapitalarisingfromadebtorsfailuretomeetthetermsofanycontractwiththeGrouporifadebtorotherwisefailstoperformasagreed.

Credit risk framework and governance TheGroupslargestsourceofcreditriskisloans,albeitthatcreditriskexiststhroughouttheotheractivitiesoftheGroup,onand

offthebalancesheet.Theseotheractivitiesincludeinter-banktransactions,mortgageloans,foreignexchangetransactions,andguarantees.GiventhesignicantsizeoftheloanportfolioonthebalancesheetoftheGroup,creditriskremains oneof themajorrisks.

Toeffectivelymanagecreditrisk,theBoardandManagementestablishedaneffectiveandsoundcreditriskmanagementframeworkwhichissupportedbyastrongriskcultureandenvironment.CreditriskmanagementisgovernedbyeachentityscreditpolicyguidelinesandultimatelyapprovedbytheBoardofDirectors.

The Board of Directors is ultimately responsible for credi t risk. Group Credi t Management Division, is responsible fortheimplementationofthecreditpolicies,whichcovercompliancewithprescribedsanctioningauthoritylevels,avoidanceofah i g hconcentrationofcreditriskandregularreviewofcreditlimits.TheGroupRiskManagementDivision,GroupComplianceandGroupAuditalsomonitorindependentlythemanagementofCreditrisk.

Credit policies, procedures and limits TheGrouphassoundandwell-denedpolicies,proceduresandlimitswhicharereviewedannuallyandapprovedbytheBoardofDirectorsandstrictlyimplementedbymanagement.Creditrisklimitsincludedelegatedapprovalandwrite-offlimitstoadvancesmanagers,managementandboardcreditcommittees,counterpartylimits,individualaccountlimits,grouplimitsandconcentrationlimits. Credit risk mitigation and hedging

AspartoftheGroupscreditriskmitigationandhedgingstrategy,varioustypesofcollateralistakenbythebankingsubsidiaries.Theseincludemortgagebondsoverresidential,commercialandindustrialproperties,cessionofbookdebtsandtheunderlyingmoveableassetsnanced.Inaddition,aguaranteeisoftenrequiredparticularlyinsupportofacreditfac il ity g ra nted to c ou nterpa rty. Generally,guarantorcounterpartiesincludeparentcompaniesandshareholders.Creditworthinessfortheguarantorisestablishedinlinewiththecreditpolicy.

Credit risk stress testing TheGroupandtheentitiesrecognisethepossibleeventsorfuturechangesthatcouldhaveanegativeimpactonthecreditportfoliosandaffecttheGroupsabilitytogeneratemorebusiness.Tomitigatethisrisk,theGrouphasputmechanismsinplacetoenhanceitsstresstestingmethodologies.

Impairments AnallowanceforloanimpairmentisestablishedifthereisobjectiveevidencethattheGroupwillnotbeabletocollectallamountsdueaccordingtotheoriginalcontractualtermsofloans.Theamountoftheallowanceisthedifferencebetweenthecarryingamountandtherecoverableamount,beingthepresentvalueofexpectedcashows,includingamountsrecoverablefromguaranteesandcollateral,discountedattheoriginaleffectiveinterestrateofloans.

Creditterms:

Default Thisisfailurebyaborrowertocomplywiththetermsandconditionsofaloanfacilityassetoutinthefacilityofferletterorloan

contract.Defaultoccurswhenadebtoriseitherunwillingorunabletorepayaloan. Past due loans

Theseareloanswherebythedebtorisindefaultbyexceedingtheloantenureorexpirydateasexpresslysetoutintheloancontracti.e.thedebtorfailstorepaytheloanbyaspecicgivendate. Impaired loans

TheGroupspolicyregardsimpaired/doubtfulloansasallthoseloanswherethedegreeofdefaultbecomesextensivesuchthattheGroupnolongerhasreasonableassuranceofcollectionofthefulloutstandingamountofprincipalandinterest.Allsuchloansareclassiedintheloangrades8,9and10.

Provisioning policy and write offs

Determinationofgeneralandspecicimpairementallowances;

TheGroupcomplieswiththefol lowingReserveBankofZimbabweprovisioningrequirements;

General allowance for impairment

Prime to satisfactory Grades 1 to 3- No evident weakness, performing to contractual terms Generalallowanceforimpairmentforfacilitiesinthiscategoryaremaintainedat1%oftotalcustomeraccountoutstandingbalanc-esandoffbalancesheet(i.e.contingent)risks.

Moderate to fair Grades 4 to 5 - Acceptable risk level to acceptable with care Generalallowanceforimpairmentforfacilitiesinthiscategoryaremaintainedat5%oftotalcustomeraccountoutstandingbalancesandoffbalancesheet(i.e.contingent)risks.

Speculative to highly speculative Grades 6 to 7 - Exhibits potential weaknesses, which require management attention tospecial attention Generalallowanceforimpairmentforthesefacilitiesaremaintainedat10%oftotalcustomeraccountoutstandingbalancesandoffbalancesheet(i.e.contingent)risks.

Specic allowance for impairment

Sub-Standard Grade 8 - Timely repayment and/or settlement may be at risk. Specicallowanceforimpairmentforfacilitiesinthiscategoryarecurrentlymaintainedat30%oftotalcustomeroutstandingbalances

andoffbalancesheet(i.e.contingent)riskslessthevalueoftangiblesecurityheld.

Doubtful Grade 9 - Full repayment and/or settlement highly improbable Specicallowanceforimpairmentforexposuresinthisgradearecurrentlymaintainedat50%oftotalcustomeroutstandingbalances

a nd o ff b al an ce s he et ( i.e. c on ti ng en t) r is ks a fter d ed uc ti ng the v al ue o fan y ta ng ib le s ec ur ityhe ld . Loss Grade 10 - Collection not possible

Specicallowanceforimpairmentfordebtsinthiscategoryarecurrentlymaintainedat100%oftotalcustomeroutstandingbalancesandoffbalancesheet(i .e.contingent)risksagainafterdeductingthevalueofanytangiblesecurityheld.

The basis for writing off assets Whenanadvancewhichhasbeenidentiedasimpairedandsubjectedto aspecicallowanceforimpairment,continuesto

deteriorate,apointwillcomewhenitmaybeconcludedthatthereisnorealisticprospectofrecovery.AuthoritywillbesoughtfromthesubsidiaryBoardCreditCommitteefortheexposuretobeimmediatelywrittenofffromthebanksbookswhilelongtermrecoverystrategiesarebeingpursued.

Credit risk and Basel II TheGrouphasimplementedCreditRiskBaselIIstandardsinlinewiththeregulatoryauthoritiesapproach.Internalprocesses

havebeenrevampedinanefforttocomplywiththerequirements.Policiesandproceduremanualshavebeenrealignedtocomply

withtheminimumrequirementsofBaselII. 30.4 Liquidity risk LiquidityRiskisthecurrentorprospectiverisktoearningsandcapitalarisingfromtheGroupsinabilitytomeetitsliabilitieswhen

theyfallduewithoutincurringunacceptablelosses.

Liquidity risk framework and governance TheGroupdoesnottreatLiquidityriskinisolationasitisoftentriggeredbyconsequencesofothernancialriskssuchascredit

riskandmarketrisk.TheGroupsliquidityriskmanagementframeworkisthereforedesignedtoensurethatitssubsidiarieshaveadequateliquiditytowithstandanystressedconditions.Toachievethisobjective,theBoardofDirectorsthroughtheentitiesBoardAssetLiabilityCommitteesisultimatelyresponsibleforliquidityriskmanagement.TheresponsibilityformanagingthedailyfundingrequirementsisdelegatedtotheHeadsofTreasuryDivisionsforbankingentitiesandFinanceManagers fornon-banking entitieswith in de pe nd en tda y to d ay mon itor in gbe in gprov id ed b yGrou pRi sk Man ag emen t. Liquidity and funding management

TheGroupsmanagementofliquidityandfundingisdecentralisedandeachentityisrequiredtofullyadopttheliquiditypolicyapprovedbytheBoardwithindependentmonitoringbeingprovidedbytheriskmanagementfunction.TheGroupusesconcentrationrisklimitstoensurethatfundingdiversicationismaintainedacrosstheproducts,counterpartiesandsectors.Majorsourcesoffund-i ng a re i n th e fo rmo fde po si ts a cros sasp ec trumo f re ta il a nd who le sa le c li en ts for a ll the s ub si di ar ie s. Cash ow and maturity prole analysis

TheGroupusesthecashowandmaturitymismatchanalysisonbothcontractualandbehaviouralbasistoassesstheirabilitytomeetimmediateliquidityrequirementsandplanfortheirmediumtolongtermliquidityprole.

Liquidity contingency plans Inlinewith the Groups liquidity policy, liquidity contingencyplans are inplace forthe subsidiaries inorder to ensure a

positiveoutcomeintheeventofaliquiditycrisis.Theplansclearlyoutlineearlywarningindicatorswhicharesupportedbyclear

anddecisivecrisisresponsestrategies.Thecrisisresponsestrategiesarecreatedaroundtherelevantcrisismanagementstructuresandaddressbothspecicandmarketcrises.

Liquidity stress testing ItistheGroupspolicythateachentityconductsstresstestsonaregularbasistoensurethattheyhaveadequateliquidityto

withstandstressedconditions.Inthisregard,anticipatedon-andoff-balancesheetcashowsaresubjectedtoavarietyofspecicandsystemicstressscenariosduringtheperiodinanefforttoevaluatetheimpactofunlikelye ve ntson l iq ui di ty p os it io ns .

30.5 Market risk Marketriskistheriskofnanciallossinonandoff-balancesheettradingpositionsarisingfrommovementsinmarketprices.Market

riskexistswhenevertheGrouphastakentrading,bankingorinvestmentpositions.

Market risk from trading positions.

TheGroupusesacollectionofriskmeasurementmethodologiestoassessmarketrisk,includingvalue-at-risk(VaR),stresstesting,losstriggersandtraditionalriskmanagementmeasures.

Market risk from banking positions BankingrelatedmarketriskiscontainedwithintheGroupstwomajortreasuryoperationsattheBankandtheBuilding Soc iet y.

Theinterestrateriskproleisassessedregularlybasedonthefundamentaltrendsininterestrates,economicdevelopmentsandtechnicalanalysis.

Market risk from investments Thisismanagedinaccordancewiththeirpurposeandstrategicbenetratherthanonmarketconsiderationsandperiodicreviews

andreassessmentsareundertaken.

Foreign exchange risk Foreign exchangeriskis the potential adverse impact onearnings and economicvalue due tocurrencyratemovements.

This involves settlement risk which arises when the Group or one of its entities incurs a nancial loss due to foreignexchangepositionstakeninboththetradingandbankingbooks.Thepotentialforlossarisesfromtranslationexposure,transactionexposureandeconomicexposure.ThisriskislargelyconcentratedattheBank,SocietyandReinsuranceCompany. Framework and governance

TheBoardofDirectorsisultimatelyaccountableandapprovesthemarketriskappetiteforalltypesofmarketrisk.TheBoarddelegatedtheeffectivemanagementofmarketrisktotheentitiesAssetLiabilityCommittees(ALCO)forthebankingentitiesandRiskandComplianceCommitteesfornon-bankingentities.Onaday-to-daybasis,marketriskexposuresareindependentlyreviewedandmeasuredbytheGroupRiskManagementfunction,andappropriatemanagementreportsare generated. A comprehensiveframeworkoflimitstocontrolmarketriskincludingforeignexchangeriskexposuresisinplaceforthedifferentlevelsofreporting.

Market risk measurement ThetoolsformeasuringmarketriskthatareappliedwithintheGrouprangefromtheveryfundamentalandbasicmarking-to-market,

tothemoresophisticatedValueatRiskModels.Generally,measurementtoolsinuseatanypointintime are commensurate withthescale,complexity,andnatureoftradingactivitiesandpositionsheldbyentity.Thetoolsandtechniquesused to measure andcontrolmarketriskincludetherepricinggap,scenarioanalysisonnetinterestincomeandeconomicvalueofequity,stoplosslimits,durationanalysis,stresstestingandValueatRisk.Inaddition,theGroupalsoperformsratioanalysisonthekeyratiosofeachentity.RisklimitsforallthemeasuresaredocumentedineachentitysALCOpolicy.GroupRiskManagementperformsregularreviewsoftheexistingmodelstoensurethattheyarestillrelevantandbehavingwithinexpectations.

30.6 Operational risk Operationalriskistheriskoflossarisingfromthepotentialthatinadequateinformationsystem,technologyfailures,breachesin

internalcontrols,fraud,unforeseencatastrophes,orotheroperationalproblemsmayresultinunexpectedlosses.Operationalriskexistsinallproductsandbusinessactivities.

Groups approach to managing operational risk

TheGroupsapproachisthatbusinessactivitiesareundertakeninaccordancewithfundamentalcontrolprinciplesofoperationalriskidentication,cleardocumentationofcontrolprocedures,segregationofduties,authorization,close monitoring of risk limits,monitoringofassetsuse,reconciliationoftransactionsandcompliance.

Operational risk framework and governance TheBoardhasultimateresponsibilityforensuringeffectivemanagementofoperationalrisk.Thisfunctionisimplementedth ro ug h

theBoardRiskandComplianceCommitteeatGrouplevelwhichmeetsonaquarterlybasistoreviewallothermajorrisksincludingoperationalrisks.ThisCommitteeservesastheoversightbodyintheapplicationoftheGroupsoperational risk managementframework,includingbusinesscontinuitymanagement.EachentityhasaManagementandBoardRiskandComplianceCommitteetoensurearobustoperationalriskmanagementframework.OtherGroupmanagementcommitteeswhichreporttoGroupExecutiveCommitteeincludetheGroupNewProductCommittee,GroupITSteeringCommitteeandGroupBusinessContinuityCommittee.

The management and measurement of operational risk TheGroupidentiesandassessesoperationalriskinherentinallmaterialproducts,activities,processesand systems. It ensures

thatbeforenewproducts,activities,processesandsystemsareintroducedorundertaken,theoperational risk inherent in themissubjectedtoadequateassessmentbytheappropriateriskcommitteeswhichincludethe Riskand ComplianceCommittee andGroupNewProductCommittee.

TheGroupconductsOperationalRiskAssessmentsinlinewiththeGroupsriskstrategy.Theseassessmentscovercausesandeventsthathave,ormightresultinlosses,aswellasmonitoroveralleffectivenessof controlsandwhetherprescribedcontrolsarebeingfollowedorneedcorrection.KeyRiskIndicators(KRIs)whicharestatisticaldatarelatingto abusinessoroperationsunitaremonitoredonanongoingbasis.TheGroupalsomaintainsarecordoflosseventsthatoccurintheGroupinlinewithBaselIIrequirements.TheseareusedtomeasuretheGroupsexposuretotherespectivelosses.RiskLimitsareusedtomeasureandmonitortheGroupsoperationalriskexposures.Theseincludebranchcashholdinglimits,tellertransactionlimits,transferlimitsandwriteofflimitswhichareapprovedbymanagementandtheBoard.Inaddition,theGroupalsousesriskmitigationmechanismssuchasinsuranceprogrammestotransferrisks.TheGroupmaintainsadequateinsurancetocoverkeyoperationalandotherrisks.

Business continuity management ToensurethatessentialfunctionsoftheGroupareabletocontinueintheeventofadversecircumstances,theGroupBusinessContinuityPlanis reviewedannuallyandapprovedby theBoard.TheGroupBusinessContinuityCommitteeisresponsibleforensuringthatallunitsandbranchesconducttestshalfyearlyinlinewiththeGrouppolicy.TheGroupc on ti nu es to c on du ct i ts businesscontinuitytestsinthesecondandfourthquartersofeachyearandalltheprocessesarewelldocumented.

30.7 Compliance risk Complianceriskisthecurrentandprospectiverisktoearningsorcapitalarisingfromviolationsof,ornon-conformancewithl a w s ,

rules,regulations,prescribedpractices,internalpoliciesandproceduresorethicalstandards.TheCompliancefunctionassessestheconformityofcodesofconduct,instructions,proceduresandorganizationsinrelationtotherulesofintegrity in nancial servicesactivities.Theserulesarethosewhicharisefromtheinstitutionsownintegritypolicyaswellasthosewhicharedirectlyprovidedbyi ts l eg al s ta tu san dothe r le ga lan dre gu la to ry p ro vi si on sap pl ic ab le to th en an ci al s ervi ce sse ctor.

ManagementisalsoaccountabletotheBoardfordesigning,implementingandmonitoringtheprocessofcomplianceriskmanagementandintegratingitwiththedaytodayactivitiesoftheGroup.



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30.8 Statement of Compliance TheGroupcompliedwiththefollowingstatutesinteralia:- TheBankingAct(Chapter24:20)andBankingRegulations,StatutoryInstrument205of2000;BankUsePromotion&

SuppressionofMoneyLaundering(Chapter24:24);ExchangeControlAct(Chapter22:05);theNationalPayments SystemsAct(Chapter24:23)andtheCompaniesAct(Chapter-24:03).

Inaddition,theGroupalsocompliedwiththeReserveBankofZimbabwesdirectivesonliquiditymanagement,capitaladequacyaswellasprudentiallendingguidelines.

31 INTERNATIONA L CREDIT RATINGS Thebankingandreinsurancesubsidiarieshavetheircreditratingsreviewedannuallybyaninternationalcreditrating agency,

Glo ba lCred it Rat in g. A ll s ub si di ar ie sha ve mai ntai ne d th ei r in ve stor g ra de rat in gs a s il lu st ra te dbe lo w.

Subsidiary 2013 2012 2011 2010 2009

FBCBankLimited A- A- A- A- A-

Reinsurance A- A- A- A- A-

BuildingSociety BBB- BBB- BBB- BBB- BBB-

32 CORPORATE GOVERNANCE TheBoardiscommittedtotheprinciplesofopenness,integrityandaccountability.Itrecognisesthedevelopingnatureofcorporategovernanceandassessesitscompliancewithlocalandinternationalgenerallyacceptedcorporategovernancepracticeson anongoingbasisthroughitsvarioussubcommittees. TheBoard isresponsibleto theshareholdersfor setting thedirectionof theGroup through theestablishmentof strategies,objectivesandkeypolicies.TheBoardmonitorstheimplementationofthesepoliciesthroughastructuredapproachtoreportingandaccountability. TheBoardmeetsregularly,witha minimumof fourscheduledmeetingsannually. Toassistthe Board inthedischargeofitsresponsibilitiesa numberof committeeshavebeenestablished,of whichthe followingarethemostsignicant:(i)BoardAuditCommittee,(ii)BoardHumanResourcesandRemunerationCommittee,(iii)BoardFinanceandStrategy(iv)BoardRiskCommittee.


Board Attendance

B oa rd m em be r M ai n bo ar d B oa rd A ud it B oa rd H um an

Resources

BoardFinance

andStrategy

BoardRiskand

Compliance

BoardMarketing

andPublicRelations

Q1 Q2 Q1 Q2 Q1 Q2 Q1 Q2 Q1 Q2 Q1 Q2

HerbertNkala p p N/A N/A p p N/A N/A N/A N/A N/A N/A

JohnMushayavanhu p p N/A N/A p p p p p p p p

KenziasChibota p p N/A N/A N/A N/A p p p p N/A N/A

KletoChiketsani p p N/A N/A N/A N/A p p p p p p

GertrudeSChikwava p p N/A N/A N/A N/A p p N/A N/A p p

PhilipMChiradza p p p i p i N/A N/A p i N/A N/A

FelixGwandekwande p p N/A N/A N/A N/A p p p p p i

TrynosKufazvei p p N/A N/A N/A N/A p p N/A N/A N/A N/A

CanadaMalunga p p p p N/A N/A N/A N/A N/A N/A N/A N/A

JamesMMatiza p p N/A N/A N/A N/A i p N/A N/A p p

JohnsonRMawere p p p p p p N/A N/A N/A N/A N/A N/A

ChipoMtasa i p i p N/A N/A N/A N/A i p N/A N/A

GodfreyGNhemachena p p p p N/A N/A N/A N/A p p N/A N/A

WebsterRusere p p N/A N/A N/A N/A p p p p p p

LegendNot a membe r -N/A Atten de d -p Apologies-i Quarter-Q

33 INTERIM DIVIDEND ANNOUNCEMENT Noticeisherebygiventhataninterimdividendof0.149USCentspersharewasdeclaredbytheBoardon671949927ordinaryshares

inissueon21August2013inrespectofthehalfyearended30June2013.ThedividendispayabletoshareholdersregisteredinthebooksoftheCompanyatthecloseofbusinessonFriday,6September2013.Thetransferbooksandregisterofmemberswillbeclosedfrom6September2013to9September2013.Dividendpaymentwillbemadetoshareholdersonorabout24September2013.

ByorderoftheBoard

Tichaona K. MabezaGROUP COMPANY SECRETARY21 August 2013



[email protected] www.fbc.co.zw



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VP13606


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10

Statement of Cash FlowsFor the six months ended 30 June 2013

Unaudited Unaudited 30June2013 30June2012 US$ US$

Note Cash ow from operating activities Protbeforeincometax 4150444 3838341Adjustmentsfor: Depreciation 5 556014 507741Amortisation 306787 268424Impairmentallowanceonloansandadvances 2.2 333958 826014Protondisposalofpropertyandequipment (2922) Fair valueadjust mentonnancialassetsat fairvalue through prot or loss ( 387 211) (183 795)

Net cash generated before changes in operating assets and liabilities 4 957 070 5 256 725 Increaseinloansandadvancestocustomers (16714287) (46783285)Decreaseinstatutoryreserves - 9015475Increaseinprepaymentsandotherassets (407391) (8003503)Increaseindepositsfromcustomers 28276249 24272575Increaseindepositsfromotherbanks 7678020 10215291Increaseintradeandotherpayables (1692994) (1477679)

22096667 (7504401)Incometaxpaid (924644) (2738601)

Net cash generated from/(used in) operating activities 21172023 (10243002) Cash ows from investing activities Saleofnancialassets 200349 -Purchaseofnancialassets (14979) -Purchaseofintangibleassets (31610) -Purchaseofpropertyandequipment 5 (819437) (724894)Proceedsfromsaleofpropertyandequipment 92819 -Netcashusedininvestingactivities (572858) (724894)

Cash ows from nancing activities Proceedsfromlinesofcredit 8141063 19066068Dividenddeclaredandpaid - (743201)Net cash generated from nancing activities 8141063 18322867

Netdecreaseincashandcashequivalents 28740228 7354971

Cashandcashequivalentsatbeginningofyear 83438773 40386 653

Cash and cash equivalents at the end of period 112 179 001 47 741 624

Statement of Financial PositionAs at 30 June 2013

Unaudited Audited

30 June 2013 31 December 2012

US$ US$

Note

ASSETS

Balanceswithbanksandcash 1 112179001 83438773Loansandadvancestocustomers 2 176240298 159526011Financialassetsatfairvaluethroughprotorloss 3.1 - 857673Financialassetsavailableforsale 3.2 12988606 12988606

Prepaymentsandotherassets 4 7538459 7131068Deferredincometaxasset 1269937 854228Intangibleassets 922385 1195622Propertyandequipment 5 15433390 15179907

Total assets 326 572 076 281 171 888

LIABILITIES Depositsfromcustomers 6.1 147821099 119544850

Depositsfromotherbanks 6.2 102594032 94916012Linesofcredit 6.3 33634785 25493722Tradeandotherpayables 7 5007363 6700356

Currentincometaxliabilities - 83855 Total liabilities 289 057 279 246 738 795

EQUITY

Sharecapital 18500000 18500000Retainedprots 17374483 14292779Otherreserves 1640314 1640314

Total equity 37 514 797 34 433 093

Total equity and liabilities 326 572 076 281 171 888

Statement of Comprehensive IncomeFor the six months ended 30 June 2013 Unaudited Unaudited

30 June 2013 30 June 2012

Note US$ US$

Interestandsimilarincome 9 16705469 16234265Interestandsimilarexpense 10 (9280626) (8169978)

Net interest income 7 424 843 8 064 287

Dealingandtradingincome 519194 848459Feeandcommissionincome 9767720 8790449Otheroperatingincome 99897 118665

Total income 17 811 654 17 821 860

Impairmentallowanceonloansandadvances 2.2 (333958) (826014)Administrativeexpenses 11 (13327252) (13157505)

Prot before income tax 4 150 444 3 838 341

Incometaxexpense (1068740) (1079133)

Prot for the period 3 081 704 2 759 208

Other comprehensive income Gainsonrevaluationofpropertyandequipment - -Taxrelatingtoothercomprehensiveincome - -

- -

Other comprehensive income (net of income tax) - -


Notes to the Financial Results

For the six months ended 30 June 2013 Unaudited Audited Unaudited


US$ US$ US$

1 BALANCES WITH BANKS AND CASH BalanceswithReserveBankofZimbabwe Currentaccountbalances 72392028 50649712 26292663 Notesandcoins 13411221 20027766 9167538 Otherbankbalances 26375752 12761295 12281423 Balances with banks and cash 112 179 001 83 438 773 47 741 624 Balanceswithotherbanksandcash 39786973 32789061 21448961 CurrentaccountbalanceatRBZ 72392028 50649712 26292663 Total 112 179 001 83 438 773 47741624 2 LOANS AND ADVANCES TO CUSTOMERS Personallending 33713820 31126823 Wholesaleandcorporateloansandadvances 150892282 136332374 Gross value of loans and advances 184 606 102 167 459 197 lessallowanceforimpairment (8365804) (7933186) Net loans 176 240 298 159 526 011

2.1 Loans concentration by sector Sector of the economy gross total percentage gross total percentage Agriculture 8783041 5% 10029461 6% Communication 2620252 1% 2067966 1% Construction 2042453 1% 1992086 1% Distribution 19488389 11% 18554276 11% Individuals 33713820 18% 31126823 19% Localauthorities 3286969 2% 2153248 1% Manufacturing 43017791 23% 41663082 25% Mining 14784755 8% 13932492 8% SMEs 41165100 22% 31126824 19% Otherservices 2780450 1% 1720871 1% Wholesale 12923082 7% 13092068 8%

Gross value of loans and advances 184 606 102 100% 167 459 197 100% lessallowanceforimpairment (8365804) (7933186) Net loans 176 240 298 159 526 011

2.2 Movement in impairment provision

Balanceatthebeginningoftheperiod 7933186 3600290 3600290 Increaseinimpairmentallowance 333958 2031685 826014 Increaseininterestinsuspense 98660 2301211 - Balanceatendperiod 8365804 7933186 4426304

2.3 Maturity analysis of advances to customers Maturingwithin1year 117866219 147147122 Maturingafter1yearbutwithin5year 58374079 12378889 176240298 159526011

3.1 Financial assets at fair value through prot or loss- - 8576733.2 Financial assets available for sale Listedsecuritiesatmarketvalue 12988606 12988606 Investmentsecuritesareequitiesthathadbeenpledgedassecurityonanonperfomingloan



Statement of Changes in EquityFor the six months ended 30 June 2012

Share Retained Revaluation Regulatory Total

capital prots reserve reserve equity US$ US$ US$ US$ US$

Balanceat1January2012 18500000 8058443 980070 660244 28198757Protfortheperiod - 2759208 - - 2759208

Transaction with owners: Dividenddeclaredandpaid - (743201) - - (743201)

Balance as at 30 June 2012 18 500 000 10 074 450 980 070 660 244 30 214 764

Statement of Changes in EquityFor the six months ended 30 June 2013

Share Retained Revaluation Regulatory Total capital prots reserve reserve equity US$ US$ US$ US$ US$

Balanceat1January2013 18500000 14292779 980070 660244 34433093

Protfortheperiod - 3081704 - - 3081704

Balance as at 30 June 2013 18 500 000 17 374 483 980 070 660 244 37 514 797

VP13606


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US$ US$ 14 Credit risk Individuallyimpaired Grade8:impaired 2675089 10290420 Grade9:impaired 3460754 2193252 Grade10:impaired 7372620 2194725 Grossamount 13508463 14678397 Allowanceforimpairment (5714294) (6132807) Carryingamount 7794169 8545590 Unimpaired Grade4-7: 25368158 7968195 Grade1-3: 145729481 144812605 Grossamount 171097639 152780800 Allowanceforimpairment (2651510) (1800379) Carryingamount 168446129 150980421 TotalCarryingamount 176240298 159526011


US$ US$

4 Prepayments and other assets Prepayments 2642325 1662338 Amountsduefromgroupcompanies 1304974 2014385 Sundryassets 3591160 3454345 7538459 7131068

4.1 Maturity analysis of other assets Maturingwithin1year 7538459 7131068 Maturingafter1yearbutwithin5years - - 7538459 71310685 PROPERTY AND EQUIPMENT Openingbalance 15179907 14832554 Additions 819437 1413686 Disposals (89897) (52719) Depreciationchargefortheyear (556014) (1013614) Depreciationchargeondisposal 79957 - Carryingamountasatendofperiod 15433390 15179907 6.1 DEPOSITS FROM CUSTOMERS Amountsduetocustomersbytype Demanddeposits 88008907 86000026 Promissorynotes 54950679 30007719 OtherTimedeposits 4861513 3537105 147821099 1195448506.2 DEPOSITS FROM BANKS Moneymarketdeposits 102594032 94916012 6.3 LINES OF CREDIT EasternandSouthernAfricanTradeandDevelopmentBank(PTABank) 7980000 - AfricanExport-ImportBank 20706066 21243722 TheZimbabweAgricultureDevelopmentTrust(ZADT) 4948719 4250000 33634785 25493722 TotalDeposits 284049916 239954584

15 FBC Bank Contractual Gap Maturity Prole as at 30 June 2013

0-30days 31-90days 91-180days 181-365days Over365days Total

ASSETS US$ US$ US$ US$ US$ US$

Balanceswithbanksandcash 13411221 - - - - 13411221

Balanceswithbanksabroad 26375752 - - - - 26375752

Balanceswithcentralbank 72392028 - - - - 72392028

Financialassetsavailableforsale - 12988606 - - - 12988606

A dv an ces t o cus to mer s 57 161 6 22 27 516 7 87 8 569 40 8 41 488 89 6 41 5 03 58 5 176 24 0 29 8

Prepaymentsandotherassets - - - 7538459 - 7538459

Deferredincometaxasset - - - 1269937 - 1269937

Propertyandequipment - - - - 15433390 15433390

Intangibleassets - - - - 922385 922385

TOTAL ASSETS 169 340 623 40 505 393 8 569 408 50 297 292 57 859 360 326 572 076

LIABILITIES

Moneymarketdeposits 53204880 40183616 1781394 7424142 - 102594032

Depositsfromcustomers 138150565 4742023 2824092 2104419 - 147821099

Depositsfrom foreignbanks 285753 13319512 399965 19629555 - 33634 785

Tradeandotherpayables - - - 3686300 1321063 5007363

Capital and reserves - - - - 37514797 37514797

TOTAL LIABILITIES 191 641 198 58 245 151 5 005 451 32 844 416 38 835 860 326 572 076

Mismatch/Funding Gap ( 2 2 30 0 575 ) ( 17 739 7 58 ) 3 563 95 7 17 4 52 87 6 19 0 23 50 0 -

Cumulative Mismatch (22300575) (40040333) (36476376) (19023500) - -


6.4 Deposits concentration (excluding lines of credit) Sector of the economy gross total percentage gross total percentage Agriculture 6576232 3% 4982313 2% Construction 2445279 1% 2225233 1% Financialservices 102594032 41% 94846356 44% Individuals 26201868 11% 32928031 15% Manufacturing 16893249 7% 10930868 5% Mining 15647644 6% 12699878 6% Other 8717657 3% 6667312 3% Publicsector 10654046 4% 10607443 5% SMEs 35463002 14% 23922901 11%

Telecommunication 5964828 2% 2351318 1% Transport 2593708 1% 4558834 2% Wholesaleandretailtrade 16663586 7% 7740375 4%

250415131 100% 214460862 100%6.5 Maturity analysis (Depositsandlinesofcredit) Maturingwithin1year 284049916 239954584 Maturingafter1yearbutwithin5years - - 284049916 239954584 7 Trade and other payables Provisions 921726 512047 Accruedexpenses 4085637 6188309 5007363 6700356 8 CAPITAL ADEQUACY OrdinaryShareCapital 18500000 18500000 Retainedprot 17374483 14292779 Regulatoryreserve 660244 660244 Capitalallocatedformarketandoperationalrisk (2621187) (3243976) Advancestoinsiders (5820913) (4443844) Tier 1 capital 28 092 627 25 765 203 Revaluationreserve 980070 980070 Generalprovisions 3727531 555060

Tier 1 & 2 capital 32800228 27300333 Tier3capitalallocatedformarketandoperationalrisk 2621187 3243976 35421415 30544309 Riskweightedassets 212087185 195115408 Tier1Ratio(%) 13.25% 13.21% Tier2Ratio(%) 2.21% 0.50% Tier3Ratio(%) 1.24% 1.66% Capitaladequacy(%) 16.70% 15.37%


US$ US$

9 INTEREST INCOME Loansandadvancestobanksandothernancialinstitutions 534352 393578 Loansandadvancestocustomers 13506367 12533542 Bankersacceptancesandtradablebills 2664750 3307145 16705469 16234265 10 INTEREST EXPENSE Depositfromotherbanks 5941563 1797548 Demanddeposits 114504 3009506

AfreximbankandPTABank 637066 1798180 Timedeposits 2587493 1564744 9280626 816997811 ADMINISTRATIVE EXPENSES Administrationexpenses 6259239 5700706 Personnelexpenses 6006246 6393816 Directorsfees 92241 124125 Depreciationandamortization 862801 776097 Auditfees 106725 162761 13327252 13157505

12 COMMITMENTS Capitalexpenditureauthorizedbutnotyetcontractedfor 5944814 6687961 13 CONTINGENT LIABILITIES Banksborrowingonbehalfofspeciccustomers-letterofcredit 11628344 8225844

16 FBC Bank Interest Repricing Gap as at 30 June 2013

0 -3 0 day s 3 1-90 day s 91-180days

181-365days

Over365 days

Non-InterestBearing

Total

ASSETS US$ US$ US$ US$ US$ US$ US$

Balanceswithbanksandcash - - - - - 13411221 13411221

Balanceswithbanksabroad 26375752 - - - - 26375752

BalanceswithCentralBank - - - - - 72392028 72392028

Financialassetsavailableforsale - - - - - 12988606 12988606

Ad van ce s to c us to me rs 57 161 6 22 27 516 78 7 8 569 40 8 41 4 88 89 6 41 5 03 58 5 - 17 6 240 29 8

Prepaymentsandotherassets - - - - - 7538459 7538459

Deferredincometaxasset - - - - - 1269937 1269937

Propertyandequipment - - - - - 15433390 15433390

Intangibleassets - - - - - 922385 922385

TOTAL ASSETS 83 537 374 27 516 787 8 569 408 41 488 896 41 503 585 123 956 026 326 572 076

LIABILITIES

Moneymarketdeposits 53204880 40183616 1781394 7424142 - - 102594032

Depositsfromforeignbanks 285753 13319512 399965 19629555 - - 33634785

Depositsfromcustomers 78149299 4742023 2824 092 2104 419 - 60001266 147821099

Tradeandotherpayables - - - - - 5007363 5007363

Capitalandreserves - - - - - 37514797 37514797

TOTAL LIABILITIES 131 639 932 58 245 151 5 005 451 29 158 116 - 102 523 426 326 572 076

F un di ng G ap C um ul at iv e ( 48 1 02 5 58 ) ( 30 7 28 3 64 ) 3 56 3 95 7 12 3 30 7 80 4 1 50 3 58 5 21 4 32 6 00 -

Mismatch (48102558) (78830922) (75266 965) (62936 185) (21432600) - -



VP13606


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12


17 FBC Bank Foreign Exchange Gap as at 30 June 2013

30 June 2013 ZAR EUR BWP GBP TOTAL

Assets US$Equivalent US$Equivalent US$Equivalent US$Equivalent US$Equivalent

Cash 1699839 16874 23190 1964 1741867

CorrespondentNostroBalances 296930 372232 348882 42155 1060199

LoansandOverdrafts 199530 506 32 199 200267

Other 5505 25 18 49 5597

Total Assets 2 201 804 389 637 372 122 44 367 3 007 930

Liabilities

ForeignCurrencyAccounts 1455415 317601 198494 23414 1994924

Other 216812 16392 30 42 233276

Total Liabilities 1 672 227 333 993 198 524 23 456 2 228 200

Net Currency Positions 529 577 55 644 173 598 20 911 779 730

Value at Risk ValueatRiskisastatisticalestimateofthemaximumlossexpectedfromtheBankstradingbookwithagivendegreeofcondenceoveragivenholdingperiod.TheBankssystemusestheExponentiallyWeightedMovingAverage(EWMA)methodtocompileVaR.Thismethodattachesmoreweightingtothemostrecentdataonmarketriskfactors-theweightsdecayingexponentiallyaswegofurtherintothepast.TheVaRparametersusedarea95%condencelevel,onedayholdingperiodand5dayholdingperiod.

Asset Class Asset Class Type of Risk Present Value Portfolio WeightValue at Risk (95%Condence level)

1-dayHoldingPeriod 5-dayHoldingPeriod

Currency Currency ExchangeRate 818687 100% 11707 26178

QuotedInvestments

Total 818687 100% 11707 26178

PortfolioVaR 11707 26178

18 BOARD ATTENDANCE

NAME 2013MAINBOARD

QUARTER1 QUARTER2

TakaMutunhu

JohnMushayavanhu

GarikaiBera

PaulChimedza

TrynosKufazvinei

MartinMakonese X

SusanMutangadura

WebsterRusere

MercyNdoro

TheresaMazoyo

PatrickTakawira

AgrippaMugwagwa

DavidBirch

PresentX Absent

By order of the Board

Tichaona K. MabezaGROUP COMPANY SECRETARY21 August 2013



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VP13606


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Directors:BenjaminKumalo(Chairman),FelixGwandekwande(ManagingDirector),OliverGwaze,MarahHativagone,AgnesKanhukamwe*,PatrickL.Mapani,KennardC.Muranda,JohnMushayavanhu,ChristopherYMuyeye,PiusRateiwa*,WebsterRusere(Executive*)

VP13606

Statement of Financial PositionAs at 30 June 2013 Unaudited Audited

30 June 2013 31 Dec 2012Notes US$ US$

ASSETSBalanceswithbanksandcash 1 29920949 18961069Loansandadvancestocustomers 2 31638245 29176730Inventory 3 3171013 3395415Otherassets 4 1295701 201485Investmentproperty 5 25000 25000Intangibleassets 233135 262253Propertyandequipment 6 4394485 4439861Total assets 70 678 528 56 461 813 LIABILITIESDepositsfrombanks 7.1 15328906 8570593Depositsfromcustomers 7.2 23575880 19985707Borrowings 7.3 7343653 5251293Otherliabilities 7.4 1946374 3294110Total liabilities 48 194 813 37 101 703 EQUITYSharecapital 156175 156125Sharepremium 11110424 9985434Nondistributablereserves - 839778Revaluationreserves 24123 309385Accumulatedsurplus 11192993 8069388Total equity 22 483 715 19 360 110

Total equity and liabilities 70 678 528 56 461 813

Statement of Comprehensive IncomeFor the six months ended 30 June 2013 Unaudited Unaudited

30 June 2013 30 June 2012Notes US$ US$

Interestincome 8 4261452 2235665Interestexpense 9 (1951134) (664574)Net interest income 2 310 318 1 571 091 Revenuepropertysales 5865302 4278000Costofsales (3707166) (2781099)Gross prot property sales 2 158 136 1 496 901 Feesandcommissionincome 1934902 2052564Feesandcommissionexpense (47113) (31937)Net fees and commission income 1 887 789 2 020 627 Otherincome 10 54450 48632Total income 6 410 693 5 137 251 Impairmentlossonnancialassets 2.2 (112455) (154916)Operatingexpenses 11 (3174633) (2660487)Total operating expenses (3 287 088) (2 815 403)

Surplus for the period 3 123 605 2 321 848Other comprehensive income - -


Statement of Cash FlowsFor the six months ended 30 June 2013 Unaudited Unaudited

30 June 2013 30 June 2012Notes US$ US$

Cash ow from operating activitiesSurplusfortheperiod 3123605 2321848Adjustments for:Depreciation 6 87538 81024Amortisationofintangibleassets 29118 -Lossondisposalofpropertyandequipment - 803Impairmentallowanceonloansandadvances 2.2 112455 154916Net cash generated before changes in operating assets and liabilities 3 352 716 2 558 591 Increaseinloansandadvancestocustomers (2573970) (2475570)Decrease/(increase)ininventory 224402 (669175)Increaseinotherassets (1094216) (1307362)Increaseindepositsfrombanks 6758313 1201378Increaseindepositsfromcustomers 3590173 5548201(Decrease)/increaseinotherliabilities (1377393) 378302Net cash generated from operating activities 8 880 025 5 234 365 Cash ows from investing activitiesPurchaseofpropertyandequipment 6 (42162) (84902)Proceedsfromdisposalofpropertyandequipment - 1697Net cash used in investing activities (42 162) (83 205) Cash ows from nancing activitiesRepaymentofborrowings (833333) (792655)

Proceedsfromborrowings 2955350 -Dividendpaid - (534674)Net cash generated from nancing activities 2 122 017 (1 327 329) Net increase in cash and cash equivalents 10 959 880 3 823 831 Cashandcashequivalentsatthebeginningoftheperiod 18961069 10744349 Cash and cash equivalents at the end of the period 1 29 920 949 14 568 180

Notes to the Financial ResultsFor the six months ended 30 June 2013 Unaudited Audited Unaudited

30 June 2013 31 Dec 2012 30 June 2012US$ US$ US$

1. BALANCES WITH BANKS AND CASH Cashonhand 654049 717754 633600 Cashatbank 488122 564123 311580 Interbankshortterminvestments 28778778 17679192 13623000 29920949 18961069 14568180 Unaudited Audited

30 June 2013 31 Dec 20122. LOANS AND ADVANCES TO CUSTOMERS US$ US$

Shorttermloanadvances 10965644 12489001 Mortgageloanadvances 21436725 17339398 Grossloansandadvancestocustomers 32402369 29828399 Less:Allowanceforimpairment (764124) (651669) Netloansandadvancestocustomers 31638245 29176730 2.1 Maturity analysis of loans and advances Upto1month 983655 592072 1monthto3months 1967310 1966315 3monthsto1year 8014679 7675162 1yearto5years 9829896 7700751 Over5years 10842705 11242430 31638245 29176730 Unaudited Audited Unaudited

30 June 2013 31 Dec 2012 30 June 2012US$ US$ US$

2.2 Movement in impairment allowance on loans and advances Balanceatbeginningoftheperiod 651669 260792 260792 Specicimpairment 112455 390877 154916 764124 651669 415708 Unaudited Audited

30 June 2013 31 Dec 2012US$ US$

2.3 Exposure to credit risk Carryingamount 31638245 29176730

Past due and impaired Grade8:Impaired 1113417 936451 Grade9:Impaired 414538 24450 Grade10:Impaired

FBC Unaudited results for HY ended 30 Jun 13.pdf

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