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Reviewed interim results for the half year ended 30 September 2015
The Development Bank of Southern Africa
Reviewed interim results for the half year ended 30 September 2015
Preparation of this report
The Chief Financial Officer, Kameshni Naidoo CA (SA) was responsible for the
preparation of the interim results.
Basis of preparation
Accounting policies adopted and methods of computation are consistent with
those applied to the annual financial statements at 31 March 2015. The
condensed interim financial statements are prepared on the historical cost
basis except that the following assets and liabilities are stated at their
fair value: derivative financial instruments, financial instruments at fair
value through profit and loss, available-for-sale financial assets, land and
buildings, post-retirement medical benefit and funeral benefit obligations
measured at actuarial values. The interim financial statements are in
conformity with IAS 34, Interim Financial Reporting. The preparation of
interim financial statement requires management to make judgments, estimates
and assumptions that affect the application of accounting policies and
reported amounts of assets and liabilities, income and expenses. Actual
results may differ from these estimates.
Key Highlights
- Total asset growth of 10.4% from 31 March 2015
- Development bonds and loan book net growth of 13.4% from 31 March 2015
- Profit for the interim period R1.430bn (September 2014: R572m)
- Included in profit is an unrealised foreign exchange gain amounting to R680m
(September 2014: R255m)
- Cash flow from operations R1.178bn (September 2014: R980m)
- Capital injection received from National Treasury of R1bn (September 2014:
R900m)
- Sustainable earnings for the interim period R592m (September 2014: R376m)
- Cost to income ratio for the interim period 28% (September 2014: R30%)
- Funding raised for the interim period R11.331bn (September 2014: R8.933bn)
Six months overview
The DBSA generated a profit of R1 430 million, a 149.9% increase from the
profit reported as at 30 September 2014. The DBSA continues to implement its
new strategy and had a net 13.4% growth in development bonds and loan book
assets since 31 March 2015. Total assets grew by 10.4% from R70.9bn to
R78.3bn. Impairment charge for the interim period amounting to R454 million
(2014: R389m) is 16% above the prior comparative interim period, however
impairment as a % of gross loan book decreased by 0.8% to 4.5%. The level of
impairment has decreased in comparison by 0.4% from March 2015. The National
Treasury in support of the new strategy and growth prospects provided a
capital injection of R1bn during the period under review. Further injection
of R2bn is expected by 31 March 2016.
Outlook
Whilst the financial position of the Bank remains strong, the DBSA expects
strong growth in development assets to continue and should this be achieved,
this will vastly improve the Bank’s developmental reach as it continues to
play a leading role in taking forward national and continental development
objectives in a financially sustainable manner.
Condensed income statement
Six months Six months
in thousands of rand ended ended
30 Sept 2015 30 Sept 2014
Reviewed Reviewed
Net interest income 1 406 102 1 118 596
Other income 916 134 237 387
Grants (6 858) (12 530)
Net impairment loss on financial assets (453 978) (389 246)
Personnel expenses (320 436) (287 180)
Other expenses (96 020) (83 904)
Depreciation and amortisation (15 299) (11 040)
Profit for the period 1 429 645 572 083
Six months Six months
ended ended
Condensed statement of comprehensive income 30 Sept 2015 30 Sept 2014
Reviewed Reviewed
Profit for the period 1 429 645 572 083
Other comprehensive profit/(loss) (56 243) 36 083
Total comprehensive income 1 373 402 608 166
Statement of Financial Position
As at As at
30 September 31 March
in thousands of rand 2015 2015
Reviewed Audited
Assets
Cash and cash equivalents 3 795 426 3 901 663
Other receivables 105 057 227 880
Investment securities 1 433 374 2 009 916
Derivative assets held for risk management 1 142 706 1 036 624
Post-retirement medical benefits investment 53 337 59 536
Home ownership scheme loans 4 822 5 462
Equity investments 5 547 273 5 092 061
Development bonds 1 290 637 1 290 390
Development loans 64 354 045 56 740 219
Property and equipment 502 348 502 976
Intangible assets 74 673 77 412
Total assets 78 304 698 70 944 139
Liabilities
Other payables 843 392 811 755
Provisions 127 575 122 711
Liability for funeral benefits 3 100 3 100
Liability for post-retirement medical benefits 161 971 160 412
Funding: debt securities 35 481 321 33 353 036
Funding: lines of credit 15 275 889 12 565 895
Derivative liabilities held for risk management 355 363 244 545
Total liabilities 52 248 611 47 261 454
Equity
Share capital 200 000 200 000
Retained earnings 13 508 679 12 260 565
Permanent government funding 9 692 344 8 692 344
Revaluation reserve on land and buildings 269 256 269 256
Hedging reserve 60 680 116 288
Reserve for general loan risks 2 325 506 2 143 975
Fair value reserve (378) 257
Total equity 26 056 087 23 682 685
Total liabilities and equity 78 304 698 70 944 139
Condensed statement of changes in equity
Six months Six months
in thousands of rand ended ended
30 Sept 30 Sept
2015 2014
Reviewed Reviewed
Balance at beginning of the period 23 682 685 19 900 573
National Treasury capital injection 1 000 000 800 000
Profit and total comprehensive income for the period 1 429 645 572 083
Net unrealized gain on cash flow hedges (55 608) 38 847
Change in value of available for sale financial assets (635) (2 764)
Total equity at end of the period 26 056 087 21 308 739
Condensed statement of cash flow
Cash flows generated from operating activities 1 178 393 979 771
Cash flows used in development activities (6 009 365) (4 652 393)
Cash flows generated from investing activities 505 971 86 835
Cash flows generated from financing activities 4 193 794 2 664 646
Effect of exchange rate movement on cash balances 24 969 32 606
Net increase/(decrease) in cash and cash equivalents (106 237) (888 535)
Cash and cash equivalents at the beginning of the
period 3 901 663 4 135 667
Cash and cash equivalents at the end of the period 3 795 426 3 247 132
Issued by the Development Bank of Southern Africa
Dated: 26 November 2015
The Standard Bank of South Africa Limited, Natalie Di-Sante 011 721 6125
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