Wrap Text
Audited Results - year ended 28 February 2013
Finbond Group Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2001/015761/06)
Share code: FGL ISIN: ZAE000138095
(“Finbond” or “the Company”)
AUDITED RESULTS – YEAR ENDED 28 FEBRUARY 2013
The directors are pleased to present the financial results of the
Finbond Group for the twelve months ended 28 February 2013. During
the twelve months under review, Finbond delivered another set of
solid results and made further good progress towards the realization
of its vision “to be the leading Mutual Bank in South Africa
improving the quality of life of our clients, through their
participation in saving together, growing together and ownership of
their own community bank.”This included a number of achievements and
significant developments for Finbond:
• Headline earnings per share increased 338.5% to 3.1c (Feb
2012: loss 1.3c)
• Share price increased 1885.7% to R 1.39 (Feb 2012: R 0.07)
• Profit for the period attributable to owners of the company
increased 53.3% to R 20.7 million. (Feb 2012: R 13.5 million)
• Revenue from continuing operations increased 8% to R
212.7million (Feb 2012: R 197million)
• Micro Credit segment revenue increased 30.2% to R 207 million
(Feb 2012: R 159million.)
• Value of loans advanced increased 7.9% to R 407.8 million
( Feb 2012: R 378 million)
• Cash received from customers increased 5% to R 563.2 million
( Feb 2012: R 536.2 million)
• Total Assets Increased 16.6% to R 556.3m (Feb 2012: R 477.1
million)
• Net Tangible Asset Value increased 31.3% to R 244.5 million
( Feb 2012: 186.3 million)
• Received formal consent from the Registrar of Banks to
establish and register a mutual bank, namely Finbond Mutual
Bank,
• Became a member of the Banking Association of South Africa
(BASA)
• Raised R 164million in fixed term retail deposits in the first
five months of operation as a Mutual Bank.
The twelve month period ended 28 February 2013 has been pivotal
for Finbond in terms of its evolving strategy to establish and
register a Mutual and Savings Bank in order to provide clients
with a full range of low cost banking services.
After due adherence to the South African Reserve Bank’s
conditions of establishment, the Registrar of Banks issued
Finbond Mutual Bank with a banking license during July 2012.This
is a significant achievement for a number of reasons :
1. It was the first Banking License issued to a local company by
the South African Reserve Bank in more than 10 years in South
Africa.
2. Finbond is one of only three micro lenders in the 20 years
existence of the micro finance industry (following the
exemption to the Usury Act and deregulation of interest rates
in 1994) that were able to make the transition and evolve
from micro lender to bank [the others being Capitec and
African Bank].
3. In line with the principles set out in Treasuries National
Policy Document “A safer financial sector to serve South
Africa better” with regards to financial inclusion and
promoting access to financial services, Finbond Mutual Bank
provides Finbond’s credit target market and consumer community
of previously disadvantaged, low income, unbanked, under-
banked and under serviced consumers, in the LSM Group 1- 7 (
predominantly 1 – 3), with a meaningful empowerment
opportunity to own shares in their own Mutual Bank.
4. It encourages financial inclusion and greater competition in
the retail banking sector in South Africa stimulating market
competition and promoting affordable access to quality
services, by facilitating entry for a smaller dedicated bank
that is limited in complexity, scope and size that is in line
with both the National Planning Commission’s Department of the
Precedencies National Development Plan (“NDP”) and National
Treasury’s Policy Document referred to above.
Finbond continues to manage for the longer term and to invest in
people, training, information technology and banking systems, as
well as in enhanced collection strategies and systems, in order to
build a sustainable bank.
Finbond Mutual Bank
A “Mutual Bank” also known as a “Mutual Savings Bank” is a bank
which is operated on a mutual bank model, with the specific goal of
encouraging savings and providing benefits to its depositors.
Finbond Mutual Bank with its 487 staff compliment specializes in the
design and delivery of unique value and solution based savings and
credit solutions tailored around depositor and borrower requirements
rather than institutionalized policies and practices. We exist to
improve and transform the lives and livelihoods of our clients by
availing them of modern inclusive banking products and services that
benefit and empower them.
Finbond Mutual Bank conducts its business through two divisions
focused on:
1. Investment and Savings Products and
2. Short and Medium Term Micro Credit Products
Basel III
Basel III was introduced in response to the deficiencies in
financial regulation revealed by the late2000s financial crisis. The
three basic elements of Basel III are to require more capital for
banks, better liquidity for banks and a lower leverage ratio for
banks.
Although Finbond as a Mutual Bank are not subject to the Basel III
requirements Finbond already complies with and significantly exceeds
all Basel III requirements set for 2018 and 2019. As at 28 February
2013 Finbond’s:
• liquidity coverage ratio % was 1112% [1012% more than required
from 2019]
• net stable funding ratio % was 408% [308% more than required
from 2019]
• capital adequacy ratio % was 57% [38% more than required from
2019]
Micro Credit Portfolio
The overall gross loan book reflected strong positive growth of 36%
ending the financial year at R 166,4 m (2012: R 122.6m)
Total segment revenue from Finbond’s Micro Finance activities, made
up of interest, fee and insurance income (portfolio yield) increased
30,2% to R 207,7 million (2012: R159.3 million).
During the period under review Finbond offered 1 month – 6 month
micro loans from R 100 - R 7,000 with an average loan size of R 1567
and an average tenure of about 2.6 months. Given the short term
nature of Finbond’s products, Finbond’s loan portfolio is very cash
flow generative and a good source of internally generated liquidity.
The whole loan portfolio turns 5 times a year. For the twelve months
ended February 2013 Finbond granted R 407,9 million worth of loans
and received cash payments of R 563,2m from customers.
Finbond’s average loan period is significantly shorter than our
larger competitors and our average loan size significantly smaller.
Given this conservative approach, Finbond does not have any exposure
to the 36 – 84 month,R 30 000 – R 180 000 long term unsecured
lending market that saw disproportionate growth over the past 12 -24
months and that caused significantly increased write offs and bad
debts. Finbond’s historic data and vintage curves indicates that the
shorter the loan tenure the lower the write off and bad debt.
Shorter term loans therefore offer lower risk as consumers are more
likely to pay them back as opposed to longer term loans.
Finbond’s micro credit portfolio is further also not exposed to any
concentration risk and does not have any significant exposure any
specific employer or industry.
Liquidity
Finbond’s liquidity position at the end of February 2012 reflects R
63.5 million cash in bank (2012: 53.2 million)
Cash Received as a % Cash Granted for the period of March 2012–
February 2013 averaged 138%.
Finbond has been able to attract more than R 160m in fixed term
deposits between the 21 September 2012 and 28 February 2013. By the
beginning of May 2013 the deposit book grew to more than R 280m with
an average deposit size of R 310 000 and average term of 30 months
at an average interest rate of 9.49%.
Finbond is not exposed to the uncertainty that accompanies the use
of corporate call deposits as a funding mechanism since Finbond only
accepts 6 – 60 month fixed term deposits. Given the long term nature
of Finbond’s liabilities [fixed term deposits with average term of
30 months] and short term nature of its assets [short term micro
loans with an average term of less than 3 months] Finbond possess a
low risk liquidity structure.
During the period under review Finbond repaid all expensive debt
owed to Development Funding Institutions such as the Dutch
Development Finance Corporation thereby reducing the average cost of
funding by approximately 10%.
Bad Debts
Strict upfront credit scoring supported by robust collection
strategies and processes further improved default rates during the
period under review.
Finbond’s Net Impairment as a percentage of expected instalments
amounted to 5.2% and Net Impairment as a percentage of cash received
(which is more conservative than instalments due) stood at 5.8% at
the end of February 2013.The best measurement of arrears and
impairments on the short term products is against instalments due
and not outstanding balances, because a large part of a short term
loan is repaid before month-end/year-end and is therefore not
reflected on the balance sheet. Computations based on the
outstanding balance therefore distort this ratio on short term
products.
Loan loss reserve, also referred to as the risk coverage ratio (Loan
loss reserves [impairment provision]/ PaR90) remains conservative at
95.6% (2011: 88.2%), which is an indication of a microfinance
institution’s ability to cope with estimated loan losses.
The write off vintages show that Finbond’s 1 to 6 month product
range write offs range between 4% and 8%.
Upfront Credit Scoring
Over the past 12 months Finbond continued to improve on and apply
strict upfront credit scoring and affordability criteria. The scores
on the various products are monitored on a monthly basis and
adjusted upwards or downwards. Detailed affordability calculations
are also done prior to extending any loans in order to determine
whether the client can in fact afford the loan repayments. .
Rejection rates between March of between 47% and 55% for our 3 – 6
month product range that Finbond upfront credit scoring is stricter
than its larger competitors:
Increasing Footprint
Finbond currently operates through 172 branches in South-Africa of
which 46 are located in Gauteng, 45 in Kwazulu Natal, 54 in the
Western and Eastern Cape and 27 in the Free State and North West.
We intend to open 25 to 40 branches in the current financial year
and thereafter approximately 40 branches per year for the next five
years.
Providing Inclusive Financial Services
Achieving sustainable and inclusive development in the financial
sector goes hand-in-hand with improving access to financial
services, particularly for the poor and vulnerable.
More than 40% of the adult population in South Africa are actively
seeking banking and credit solutions but remain largely unattended
and underserviced due to the traditional banks concentration on the
higher income brackets of the population.
There is a need among Finbond’s current customer base and target
market for a Mutual Bank that specifically caters for their needs
with regards to inter alia the following banking products and needs:
• Savings accounts that earn interest on small amounts
• Higher interest on savings deposits than traditional banks,
that actively encourage saving [due to Finbond’s higher
margins on the micro lending it can afford to pay depositors
more than the traditional banks that have low margins can]
• No minimum operating balance
• Branch Network in rural areas
• Low monthly bank charges and no cash deposit or cash handling
fees
• Innovative and modern cash deposits, transfers and drawings
• Unsecured Loans with credit guarantee insurance
• Basic Financial Education
Finbond is well positioned and able to provide much needed inclusive
Banking services and products to the vulnerable, unbanked, under
banked and previously disadvantaged in line with the principles set
out in Treasuries National Policy Document “A safer financial sector
to serve South Africa better” with regards to financial inclusion
and promoting access to financial services.
Growing Market Share
Our share of the short term unsecured market [loans below R 8 000
with a tenure of between 30 days and 180 days] grew to approximately
10% and we have an insignificant share of the total R 171billion
unsecured lending market in South Africa.
Given that we are growing from a small base we can keep on growing
for a long time.
Finbond is well positioned for the implementation of its strategic
growth plans in the micro credit market in South Africa has
significant growth opportunities over the next five to ten years.
PROPERTY INVESTMENTS
Two Independent valuations by professional valuers registered with
the South African Institute of Valuers were again obtained as at 28
February 2013, as required by IAS 40.
The Independent Valuations revalued Finbond’s property portfolio at
R 233 million (2012: R 229million).
STRATEGIC INNITIATIVES
Strategic initiatives under way include:
* Developing and rolling out Finbond Mutual Bank, transactional
bank accounts and savings accounts to all its micro credit
clients
* Developing and rolling out a Cellular Phone Banking Product
and Application
* Developing and rolling out an Internet Banking Product and
Application
* Developing and rolling out a Mastercard Debit Card product
* Diversification of the funding-base through inter alia the
raising fixed term deposits and an issue on the debt capital
markets.
* Growing market share through the increased sale of medium term
products, specifically 6 months and 12 – 24 month loans.
* Expansion of the branch network in high growth areas.
* Considering selective strategic acquisitions
PROSPECTS
The challenging and difficult market conditions in the markets
within which Finbond operates, are not expected to abate in the
short and medium term. However, we are confident that we have the
required resources and depth in management to successfully confront
and overcome these challenges and that our client base and various
sources of revenue will continue to grow.
We are positive about our prospects for future growth due to
Finbond’s:
• Significantly improved earnings to date,
• Significantly improved revenue to date,
• Strong growth prospects over the next 5 – 10 years
• Proven Business Model
• Strategic position following the establishment of Finbond
Mutual Bank;
• Management expertise;
• Low Gearing;
• Strong Cash Flow;
• Strong Low Risk Liquidity position;
• Uniquely positioned 172 Branch Network
• Access to funding; and
• Untapped potential in the Micro Credit and Mutual Banking
markets.
We believe that the evolution from a Micro Finance Institution to a
Mutual and Savings Bank in the implementation of our strategic
action plan will ensure that we achieve results in the medium and
long term. Statements made in this announcement regarding Finbond’s
prospects have not been reviewed or reported on by Finbond’s
external auditors.
CHANGE TO BOARD
In terms of paragraph 3.59 of the JSE Limited Listings Requirements,
Finbond wishes to advise shareholders that Mrs. Ina Wilken- Jonker
will retire, with effect from 1 June 2013, as an executive director
of Finbond.
However, Mrs. Wilken-Jonker will continue to serve on the board of
Finbond in the capacity of a non-executive director. The board of
Finbond wishes to thank Mrs. Wilken-Jonker for the various
significant contributions she has made to the Company during her
more than 10 year tenure as executive director and look forward to
her continued value add as a non-executive director.
DIVIDEND
It is the Group’s policy to consider the declaration of a dividend
annually.
Given the Finbond growth prospects and expansion plans the Board of
Directors decided not to declare a dividend for the year ended 28
February 2013 but to rather invest surplus capital in banking
systems and technology and towards increasing the branch network.
AUDITED RESULTS FOR THE 12 MONTHS ENDED 28 FEBRUARY 2013
STATEMENT OF COMPREHENSIVE INCOME
Figures in rand 2013 2012
Interest income 52 450 942 47 382 983
Interest expense (20 841 795) (16 801 690)
Net interest income/ margin 31 609 147 30 581 294
Fee income 94 019 282 92 305 545
Other microfinance income 62 051 268 33 707 775
Fair value adjustments 3 077 499 22 435 160
Net commission expense (1 370 910) (39 127)
Net impairment charge on loans and (19 825 957) (23 719 091)
advances
Operating expenses (139 845 637) (127 042 430)
Operating (loss)/ profit 29 714 692 28 229 125
Profit/(Loss) before taxation 29 714 692 28 229 125
Taxation (9 235 908) (14 805 247)
Profit/(Loss) for the period 20 478 784 13 423 878
Total comprehensive income/ total 20 478 784 13 423 878
comprehensive (loss) for the period
Owners of the company 20 732 781 13 552 177
Non controlling interest (253 997) (128 298)
(Loss)/ profit for the period
attributable to:
Owners of the company 20 732 781 13 552 177
Non controlling interest (253 997) (128 298)
Basic (loss)/ earnings per share 3.6 3.5
(cents)
Diluted (loss)/ earnings per share 3.6 3.5
(cents)
Headline (loss)/ earnings per share 3.1 (1.3)
(cents)
Diluted headline (loss)/ earnings per 3.1 (1.3)
share (cents)
RECONCILIATION OF HEADLINE EARNINGS/(LOSS) PER SHARE
Net (loss)/ profit attributable to 20 732 781 13 552 177
ordinary equity holders of the parent
Adjusted for:
Loss/ (profit) on disposal of property, (438 686) (131 774)
plant and equipment
Revaluation of investment properties (2 521 333) (18 223 117)
Fair value adjustment of investment (3 100 000) (22 435 160)
properties included in basic earnings
Tax effect on re-measurement of items 578 667 4 212 043
of a capital nature included in
earnings in the current period
Headline profit 17 772 765 (4 802 714)
Headline earnings/(loss) per share 3.1 (1.3)
(cents)
Diluted headline earnings/(loss) per 3.1 (1.3)
share (cents)
STATEMENT OF FINANCIAL POSITION
Figures in rand 2013 2012
Assets
Cash and cash equivalents 63 595 201 53 232 659
Other financial assets 25 693 757 8 607 373
Loans and advances to customers 122 434 015 89 548 617
Other receivables 9 126 997 10 009 544
Property, plant and equipment 16 201 091 19 058 249
Investment property 233 005 882 229 620 000
Goodwill 61 262 303 61 262 303
Deferred tax 24 952 193 5 783 928
Total Assets 556 271 439 477 122 673
Equity and liabilities
Equity
Share capital and premium 239 162 377 201 775 944
Reserves 4 221 575 7 022 371
Accumulated profit/ (loss) 62 373 552 38 839 975
Equity attributable to owners of the 305 757 504 247 638 290
Company
Non-controlling interest (824 052) (570 054)
Total equity 304 933 452 247 068 235
Liabilities
Trade and other payables 21 884 882 12 911 382
Deposits received from customers 164 037 998 -
Current tax payable 9 502 416 3 053 422
Finance lease obligation 240 192 2 702 079
Other financial liabilities 23 488 650 174 441 821
Loans from shareholders/ group
companies - 20 000 000
Deferred tax 32 183 849 16 945 735
Total liabilities 251 337 987 230 054 438
Total equity and liabilities 556 271 439 477 122 673
STATEMENT OF CHANGES IN Share Share Treasury Total Share
EQUITYFigures in Rand Capital premium shares Capital
Consolidated
Balance at 1 March 2011 382 211 274 200 (9 481 395) 201 793 187
Profit for the period - - - -
Other comprehensive income - - - -
Total comprehensive profit for
the period - - - -
Contributions by and
distributions to owners:
Share based payment
transactions - - - -
Transfer to contingency reserve - - - -
Costs associated with Rights
Issue - (17 243) - (17 243)
Total transactions with owners - (17 243) - (17 243)
Balance at 29 February 2012 382 211 256 957 (9 481 395) 201 775 944
Balance at 1 March 2012 382 211 256 957 (9 481 395) 201 775 944
Profit for the period - - - -
Other comprehensive income - - - -
Total comprehensive profit for
the period - - - -
Contributions by and
distributions to owners:
Rights issue 200 19 999 800 - 20 000 000
Transfer to contingency reserve - - - -
Costs associated with Rights
Issue - (765 102) - (765 102)
Treasury shares sold - - 8 951 540 8 951 540
Share issue 23 9 199 972 - 9 199 995
Total transactions with owners 223 28 434 670 8 951 540 37 386 433
Balance at 28 February 2013 605 239 691 627 (529 855) 239 162 377
STATEMENT OF CHANGES IN EQUITY (continued)
Accumulated
profit/
Figures in Rand Reserves (loss)
Consolidated
Balance at 1 March 2011 7 439 436 26 303 853
Profit for the period - 13 552 177
Other comprehensive income -
Total comprehensive profit for - 13 552 177
the period
Contributions by and
distributions to owners:
Share based payment (1 433 120) -
transactions
Transfer to contingency reserve 1 016 055 (1 016 055)
Costs associated with Rights - -
Issue
Total transactions with owners (417 065) (1 016 055)
Balance at 29 February 2012 7 022 371 38 839 975
Balance at 1 March 2012 7 022 371 38 839 975
Profit for the period - 20 732 781
Other comprehensive income -
Total comprehensive profit for - 20 732 781
the period
Contributions by and
distributions to owners:
Rights issue - -
Transfer to contingency reserve (2 800 796) 2 800 796
Costs associated with Rights - -
Issue
Treasury shares sold - -
Share issue - -
Total transactions with owners (2 800 796)
2 800 796
Balance at 28 February 2013 4 221 575 62 373 552
STATEMENT OF CHANGES IN EQUITY (continued)
Total
Attributable
to equity Non
holders of controlling
Figures in Rand the company interest Total equity
Consolidated
Balance at 1 March 2011 235 536 477 (441 756) 235 094 721
Profit for the period 13 552 177 (128 298) 13 423 878
Other comprehensive income - - -
Total comprehensive profit for 13 552 177 (128 298) 13 423 878
the period
Contributions by and
distributions to owners:
Share based payment (1 433 120) - (1 433 120)
transactions
Transfer to contingency reserve - - -
Costs associated with Rights (17 243) - (17 243)
Issue
Total transactions with owners (1 450 363) - (1 450 363)
Balance at 29 February 2012 247 638 290 (570 054) 247 068 235
Balance at 1 March 2012 247 638 290 (570 054) 247 068 235
Profit for the period 20 732 781 (253 997) 20 478 784
Other comprehensive income - - -
Total comprehensive profit for 20 732 781 (253 997) 20 478 784
the period
Contributions by and
distributions to owners:
Rights issue 20 000 000 - 20 000 000
Transfer to contingency reserve - - -
Costs associated with Rights (765 102) - (765 102)
Issue
Treasury shares sold 8 951 540 - 8 951 540
Share issue 9 199 995 - 9 199 995
Total transactions with owners 37 386 433 - 37 386 433
Balance at 28 February 2013 305 757 504 (824 052) 304 933 452
STATEMENT OF CASH FLOW
Figures in rand 2013 2012
Cash flows from operating activities
Cash receipts from customers 305 148 732 143 238 735
Cash paid to suppliers and employees (47 194 459) (85 221 786)
Cash generated by operating activities 257 954 273 58 016 949
Increase in net loans and advances (69 455 541) (31 019 869)
Interest paid (20 325 191) (15 545 062)
Interest received on cash and cash 2 206 483 1 356 862
equivalents
Taxation paid (6 970 681) (6 396 638)
Net cash inflow/(outflow) from 163 409 343 6 412 243
operating activities
Cash flows from investing activities
Property, plant and equipment acquired (3 068 663) (3 450 801)
Proceeds on disposals of property, 3 136 871 1 257 330
plant and equipment
Dividends received - -
(Decrease)/increase in loans from group 11 944 701
companies/shareholders
Increase/(decrease) in financial assets (17 086 384) (2 315 071)
Expenditure to maintain and expand (17 018 176) 7 436 158
operating capacity
Common control transaction - -
Expenditure for expansion - -
Net cash (to)/from investing activities (17 018 176) 7 436 158
Cash flows from financing activities
Shares issued 18 151 535 -
Finance lease payments (2 461 887) (1 927 339)
Funding/ other financial liabilities 13 185 000 42 000 000
raised
Funding/ other financial liabilities (164 138 171) (37 609 360)
(repaid)
Share premium expenses (765 102) (17 244)
Net cash from/(to) financing activities (136 028 625) 2 446 057
Increase/(decrease) in cash and cash 10 362 542 16 294 458
equivalents
Cash and cash equivalents at beginning 53 232 659 36 938 201
of period
Cash and cash equivalents at end of the 63 595 201 53 232 659
period
SEGMENTAL REPORT
2013 Consolidated Deposits Micro Property
Figures in rand Received Finance Investment
Interest revenue 41 404 51 724 698 -
Interest expense (2 335 687) (11 712 485) (336 323)
Net interest revenue (2 294 283) 40 012 213 (336 323)
Fee income - 94 019 282 -
Net commission income - (2 012 163) -
Other microfinance - 62 051 268 -
income
Fair value adjustment - (22 501) 3 100 000
Net impairment charge on - (19 825 957)
loans and advances
Depreciation - (3 112 354) -
Operating expenses 3 850 916 (139 587 225) (1 407 776)
Operating (loss)/ profit 1 556 633 31 522 563 1 355 901
(Loss)/ profit before 1 556 633 31 522 563 1 355 901
taxation
Taxation - (9 053 495) -
(Loss)/ profit for the 1 556 633 22 469 068 1 355 901
year
7% 110% 7%
Attributable to:
Equity holders of the 8 072 619 16 058 235 1 355 901
parent
Minority interest - (253 997)
Segment assets 20 812 729 286 931 169 233 005 882
Investment property - - 233 005 882
Loans and advances received - 122 434 015
from customers
Cash & cash equivalents 19 612 729 32 426 027 -
Segment liabilities 168 353 141 59 693 034 1 234 191
Deposits received from 164 037 998 - -
customers
SEGMENTAL REPORT (continued)
2013 Consolidated Mortgage
Figures in rand Origination Reconciling Consolidated
Interest revenue 28 716 656 123 52 450 941
Interest expense - (6 457 300) (20 841 795)
Net interest revenue 28 716 (5 801 177) 31 609 146
Fee income - - 94 019 282
Net commission income 639 974 1 279 (1 370 910)
Other microfinance income - - 62 051 268
Fair value adjustment - - 3 077 499
Net impairment charge on - - (19 825 957)
loans and advances
Depreciation - - (3 112 354)
Operating expenses (6 106) 416 909 (136 733 282)
Operating (loss)/ profit 662 584 (5 382 989) 29 714 693
(Loss)/ profit before 662 584 (5 382 989) 29 714 693
taxation
Taxation (182 414) - (9 235 909)
(Loss)/ profit for the 480 170 (5 382 989) 20 478 784
year
2% (26%) 100%
Attributable to:
Equity holders of the 480 170 (5 234 145) 20 732 781
parent
Minority interest (253 997)
Segment assets 3 741 606 11 780 053 556 271 439
Investment property - - 233 005 882
Loans and advances received - - 122 434 015
from customers
Cash & cash equivalents 919 380 10 637 065 63 595 201
Segment liabilities (184 919) 22 242 539 251 337 986
Deposits received from - - 164 037 998
customers
SEGMENTAL REPORT (continued)
Deposits Micro Property
2012 Consolidated
received Finance Investment
Figures in rand
Interest revenue - 46 831 260 -
Interest expense - (14 917 704) (375 847)
Net interest revenue - 31 913 556 (375 847)
Fee income - 92 305 545 -
Net commission income - (899 409) -
Other microfinance income - 20 183 457 -
Fair value adjustment - - 22 431 842
Net impairment charge on - (23 719 091) -
loans and advances
Depreciation - (5 037 717)
Operating expenses - (125 270 320) (855 224)
Operating (loss)/ profit - (10 523 979) 21 200 771
(Loss)/ profit before - (10 523 979) 21 200 771
taxation
Taxation - (6 771 097) -
(Loss)/ profit for the - (17 295 076) 21 200 771
year
(129%) 158%
Attributable to:
Equity holders of the - (17 166 778) 21 200 771
parent
Minority interest - (128 298) -
Segment assets - 198 862 745 229 620 000
Investment property - - 229 620 000
Loans and advances received - 89 548 616 -
from customers
Cash & cash equivalents - 25 260 249 -
Segment liabilities - 204 132 893 -
SEGMENTAL REPORT (continued)
2012 Consolidated Mortgage
Figures in rand Origination Reconciling Consolidated
Interest revenue 88 813 462 910 47 382 983
Interest expense - (1 508 139) (16 801 690)
Net interest revenue 88 813 (1 045 229) 30 581 293
Fee income - - 92 305 545
Net commission income 886 456 (26 174) (39 127)
Other microfinance income - 13 524 318 33 707 775
Fair value adjustment - 3 318 22 435 160
Net impairment charge on - - (23 719 091)
loans and advances
Depreciation (5 037 717)
Operating expenses (457 499) 4 578 330 (122 004 713)
Operating (loss)/ profit 517 770 17 034 563 28 229 125
(Loss)/ profit before 517 770 17 034 563 28 229 125
taxation
Taxation (171 950) (7 862 200) (14 805 247)
(Loss)/ profit for the 345 820 9 172 363 13 423 878
year
3% 68% 100%
Attributable to:
Equity holders of the 345 820 9 172 364 13 552 177
parent
Minority interest - - (128 298)
Segment assets 3 651 882 39 204 117 471 338 744
Investment property - - 229 620 000
Loans and advances - - 89 548 616
received from customers
Cash & cash equivalents 908 269 27 064 141 53 232 659
(225 939) 20 363 556 224 270 510
Segment liabilities
The Group is primarily a financial services provider with
significant business interests in the microfinance environment. The
Group is organised into four major operating divisions, namely:
microfinance, property investment, mortgage origination and deposit
taking. These divisions are the basis on which the Group reports its
segment information for internal purposes. The Group's operating
divisions operate in two principal geographical segments/ areas of
the world, namely South Africa and Namibia. As the Namibian
operations are insignificant in context of Group operations, no
secondary segmental information is provided.
BASIS OF PREPARATION
These Finbond Group Limited (“the Group”) financial results for the
year ended 28 February 2013 constitute a summary (prepared in
accordance with the JSE Listing Requirements, the South African
Companies Act (Act 71 of 2008) as amended, and the recognition and
measurement requirements of International Financial Reporting
Standards and the presentation and disclosure requirements of
International Accounting Standard 34 and the AC 500 interpretation
as issued by the Accounting Profession Council of SAICA) of the
Group’s audited financial statements.
These summarized consolidated financial statements do not include
all of the information required for full annual financial statements
and should be read in conjunction with the consolidated financial
statements of the Group as at and for the year ended 28 February
2013.
The accounting policies applied by the Group in these summarized
consolidated financial statements are consistent with those applied
in the previous year.
Audit opinion
The Group’s financial statements have been audited by the Company’s
auditors, KPMG Inc., who have expressed an unmodified opinion which
is available for inspection at the Company’s registered office.
Annual report
The Company`s annual report, together with a notice convening the
annual general meeting, will be mailed to Finbond shareholders
before the end of May 2013, at which time an announcement
incorporating details of the annual general meeting will be
published on SENS.
For and on behalf of the Board
Dr. Malesela Motlatla Dr. Willie van Aardt
17 May 2013
DIRECTORS: Chairman: Dr MDC Motlatla* (BA, DCom (Unisa)); Chief
Executive Officer: Dr W van Aardt (BProc (Cum Laude), LLM (UP),
LLD (PU CHE) Admitted Attorney of The High Court of South Africa,
QLTT (England and Wales), Solicitor of the Supreme Court of England
and Wales); Chief Compliance Officer: HJ Wilken-Jonker (BCom Hons
(Unisa)); Chief Risk Officer: DC Pentz (CA (SA), BCom Hons); Chief
Financial Officer: GT Sayers (CA (SA), BCom (Hons) (UNP), BComt
(Hons) (Unisa)); Adv J Noeth* (B Iuris LLB); RN Xaba* (CA (SA)
BComt, BComt (Hons) (Unisa)); Adv N Melville* (B Law. LLB (KZN) LLM
(Cum Laude)(KZN), SEP (Harvard); Mr RR Emslie* (B Comm Law, Hons
Acc. CA (SA)); *Non-Executive.
Secretary: CD du Plessis – Sekretari
Transfer secretaries
Link Market Services South Africa (Proprietary) Limited
(Registration number 2000/007239/07)
11 Diagonal Street, Johannesburg, 2001
(PO Box 4844, Johannesburg, 2000)
Designated Advisor: Grindrod Bank Limited
Date: 17/05/2013 03:11:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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