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Availability of Annual Financial Statements - BIDBS
The Development Bank of Southern Africa
(Registration number 1600157FN)
JSE Company Code: BIDBS
Audited results for the year ended 31 March 2016
Preparation of the financial statements
The following individual was responsible for the oversight and preparation of
the financial statements for the year ended 31 March 2016:
Kameshni Naidoo CA (SA), Chief Financial Officer
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
financial statements are prepared on the historical cost basis except for the
following assets and liabilities which 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 measured at actuarial values. The Annual
Financial Statements have been prepared in accordance with the recognition,
measurement and disclosure requirements of International Financial Reporting
Standards (“IFRS”), Public Finance Management Act of South Africa (“PFMA”),
Section 27 to 31 of the Companies Act of South Africa and the Development
Bank of Southern Africa Act, 1997.
The Preparation of Annual Financial Statements 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.
Audit of results
The financial results of DBSA for the year ended 31 March 2016 have been
audited by the Bank’s auditor, Nkonki Inc. In their audit report, which is
available for inspection at the Company's Registered Office, Nkonki Inc.
stated that their audit was conducted in accordance with International
Standards on Auditing, and have expressed an unmodified audit report on the
year-end financial statements.
Key Highlights
- Record disbursement of R17.1bn (31 March 2015: R13bn) main
contributors were to loans and equity disbursements.
- Increased in profitability for the year R2.6bn (31 March 2015:
R1.2bn).
- Included in profit is an unrealised foreign exchange gain amounting to
R1bn (31 March 2015: R490m).
- Cost to income ratio including IDD 28.7% (31 March 2015: 34.4%). Core
banking business (excluding IDD) cost to income ratio of 25% (31 March 2015:
31%).
- Cash flow from operations R3bn (31 March 2015: R2.7bn).
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- Capital injection received from National Treasury of R3bn in support
of the growth strategy (31 March 2015: R2.5bn).
- 71% increase in sustainable earnings (net profit adjusted for: foreign
exchange adjustment, revaluation of financial instruments and grants, but
includes revaluation on equity investment).
Overview of the Financial results and activities
The Bank continues to implement its new business strategy and the key
financial indicators for the year under review are:
- Operating income increased by 75% to R5.0bn (2014/15: R2.9bn) on the
back of an increase in net interest income to R3.2bn (2014/15: R2.3bn),
increase in foreign exchange gain to R1bn (2014/15: R490m) and gains on
financial instruments to R442m (2014/15 loss: R300m).
- Cost-to-income ratio improved to 28.7% (2014/15: 34.4%).
- DBSA profitability increased to a net profit of R2.6bn compared to
R1.2bn in 2014/15.
- Development loans, bonds and equity investments disbursements of
R17.1bn, an increase of 32% compared to the R13bn disbursed during
2014/15. A new record level of disbursements.
- Impairment charge for the year amounting to R1.43bn (2015: R743m) is
91% above the prior comparative period. Provision for loan impairment
increased by: 30% to R3.8bn (2014/15: R2.9bn) although the provision
for loan impairment increased, the quality of the loan book remains
within acceptable parameters with non-performing loans at 3.7% of the
total loan book (2014/15: 5.08%), 1.4% improvement from prior year.
- Debt-to-equity ratio improved to 177.8% (2014/15: 195.6%).
- The National Treasury in support of the strategy and growth prospects
provided a capital injection of R3bn during the period under review
(2014/15: R2.5bn), being the last tranche of the R7.9bn capital
injection commitment.
- Appropriate measures to improve the long-term financial sustainability
of the Bank are currently in implementation.
Outlook
The financial position of the DBSA remains strong. The Bank continues to
implement its strategy in delivery of developmental impact in a financially
sustainable manner.
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Statement of Financial Position as at 31 March 2016
2016 2015
in thousands of rand
Assets
Cash and cash equivalents 2 084 565 3 901 663
Trade and other receivables 138 533 227 880
Investment securities 1 265 218 2 009 916
Derivative assets held for risk management 1 163 533 1 036 624
Post-retirement medical benefits investment 49 978 59 536
Home ownership scheme loans - 5 462
Equity investments 6 278 575 5 092 061
Development bonds 1 290 296 1 290 390
Development loans 69 494 954 56 740 219
Property, plant and equipment 501 202 502 976
Intangible assets 79 142 77 412
Total assets 82 345 996 70 944 139
Liabilities
Trade and other payables 894 795 811 755
Provisions 152 533 122 711
Liability for funeral benefits 3 100 3 100
Liability for post-retirement medical benefits 239 289 160 412
Debt securities held at fair value through profit or loss 6 188 780 6 837 095
Debt securities held at armotised cost 29 082 355 26 515 941
Funding: lines of credit 16 371 534 12 565 895
Derivative liabilities held for risk management 148 551 244 545
Total liabilities 53 080 937 47 261 454
Equity
Share capital 200 000 200 000
Retained earnings 14 544 861 12 260 565
Permanent government funding 11 692 344 8 692 344
Revaluation reserve on land and buildings 269 256 269 256
Hedging reserve 123 050 116 288
Reserve for general loan risks 2 436 358 2 143 975
Fair value reserve (810) 257
Total equity 29 265 059 23 682 685
Total liabilities and equity 82 345 996 70 944 139
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Statement of Comprehensive Income for the year ended 31
March 2016
in thousands of rand 2016 2015
Interest income 6 541 028 5 327 312
Interest expense (3 355 429) (3 002 929)
Net interest income 3 185 599 2 324 383
Net fee income 275 914 232 928
Net foreign exchange gain 1 002 172 489 673
Net gain/(loss) from financial assets and liabilities 442 630 (299 832)
Other operating income 134 355 139 971
Other income 1 855 071 562 740
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Operating income 5 040 670 2 887 123
Project preparation (14 651) (6 138)
Development expenditure (43 869) (35 015)
Net impairment loss on financial assets (1 426 159) (743 361)
Personnel expenses (730 937) (607 271)
Other expenses (213 653) (253 175)
Depreciation and amortisation (30 593) (25 108)
Profit from operations 2 580 808 1 217 055
Grants (4 129) (2 914)
Profit for the year 2 576 679 1 214 141
Statement of Other Comprehensive Income for the year ended 31 March 2016 in thousands
of rand
2016 2015
Profit for the year 2 576 679 1 214 141
Items that will not be reclassified to profit and loss
Gain on revaluation of land and buildings - 15 769
Items that may be reclassified subsequently to profit and loss
Unrealised gain/(loss) on cash flow hedges 142 063 (88 253)
(Loss)/gain on cash flow hedges reclassified to statement
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of comprehensive income (135 301) 142 583
Unrealised loss on available-for-sale financial assets (1 067) (2 128)
5 695 52 202
Other comprehensive income 5 695 67 971
Total comprehensive income for the year 2 582 374 1 282 112
Condensed statement of changes in equity
2016 2015
in thousands of rand
Balance at beginning of the year 23 682 685 19 900 573
Government recapitalisation 3 000 000 2 500 000
Profit for the year 2 576 679 1 214 141
Unrealised gain/(loss) on cash flow hedges 142 063 (88 253)
(Loss)/gain on cash flow hedges reclassified to statement
of comprehensive income (135 301) 142 583
Unrealised loss on available for sale financial assets (1 067) (2 128)
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Gain on revaluation of land and buildings - 15 769
Total equity at end of the year 29 265 059 23 682 685
Summarised Statement of Cash Flows for the year ended 31 March 2016
Cash flows generated from operating activities 3 025 315 2 660 756
Cash flows used in development activities (11 199 428) (6 397 688)
Cash flows generated from investing activities 167 432 (730 188)
Cash flows generated from/(utilised in) financing
6 085 967 4 199 575
activities
Effect of exchange rate movement on cash balances 103 616 33 541
Net decrease in cash and cash equivalents (1 817 098) (234 004)
Cash and cash equivalents at the beginning of the
3 901 663 4 135 667
year
Cash and cash equivalents at the end of the year 2 084 565 3 901 663
The full Annual Report is available for download on the following link:
http://www.dbsa.org/EN/InvestorRelations/Pages/Investor-Relations.aspx
22 September 2016
Debt Sponsor: The Standard Bank of South Africa Limited
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